Why We Still Need Free Trade and Globalization

Dalibor Rohac

No 166, mBank - CASE Seminar Proceedings from CASE-Center for Social and Economic Research

Abstract: Giving up on the institutions underpinning the current trade regime would be extremely unwise, particularly at a time of historically unprecedented economic distress accompanying the COVID-19 pandemic. Without the constraints imposed by the WTO and PTAs, nothing would stop politicians from reverting back to trade policies that cater to special interests while distributing the costs over the wider public. As the example of the Great Depression shows, such danger would be imminent in bad economic times when the temptation to impose discriminatory trade barriers would be strong and doing so would amplify the size of adverse economic shocks. A zero- or negative-sum economic environment provides fuel for extremist ideologies, militarism, and war. Avoiding such a scenario is precisely the challenge facing the world today.

Keywords: globalism; free trade; tariff; WTO; USA; COVID-19 (search for similar items in EconPapers)
JEL-codes: B17 B27 F13 (search for similar items in EconPapers)
Pages: 35
Date: 2021-01-20
New Economics Papers: this item is included in nep-cwa and nep-int
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