The global trading system is broken says Dr Joe Zammit-Lucia. It is, he says, a politically, socially and economically unsustainable system designed for the 20th century and based on theories from the 19th with little relevance today. He suggests a way forward.
Institutions are slow to change. And those who benefit most from any system will keep on defending it. Meaningful change only comes in times of crisis. So it may take a credible, Trump-induced US threat to bring the global trading edifice down to stimulate reform of, what is, a system that is no longer fit for purpose.
This is not the narrative that one usually hears about our globalised system. Defenders of globalisation claim that it brings prosperity to all and that Trump’s threat of trade wars with China and others are irresponsible and will bring widespread economic damage.
But there may be some justification for a narrative that questions the global way.
“Comparative advantage today arises merely from some countries’ willingness to employ slave labour and inflict widespread environmental damage.”