Fragmentation of the world trading system

Emile van Ommeren

Chapter Chapter 6 in Pro Trade, Against Competition, 2025, pp 116-132 from Edward Elgar Publishing

Abstract: Chapter 6 (‘Fragmentation of the world trading system’) returns to the research puzzle of why successful, internationally oriented firms, which greatly benefit from the liberal trading order, lobby for the imposition of selective trade protection. I explain why specific protection against ‘unfairunfair practices’ trade practices and the proliferation of preferential liberalization are driven by the same factors. I describe how selective protection can offset the welfare gains from MFN (e.g., due to costly trade diversion), and I explain how relatively minor (bilateral) trade frictions can move up the ladder of escalation and have the potential to evolve into fully-fledged trade wars. Lastly, I discuss how the demand for selective trade protection is causing tension with the WTO’s key principles and among countries.

Keywords: World trading system; Political organization; Unfair trade; Preferential trade agreements; Trade conflicts; World Trade Organization (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035350216
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