Geopolitical competition, globalisation and WTO reform
Hoekman, B. M., Mavroidis, P. C., & Nelson, D. R. (2023). Geopolitical competition, globalisation and WTO reform. The World Economy, 46, 1163–1188. https://doi.org/10.1111/twec.13406
Published 28 May 2023
This paper discusses options to manage spillovers of unilateral trade policies motivated by national security and other non-economic objectives on global trade and investment. Within the WTO framework, we argue a ‘specific trade concern’ mechanism is likely to be more effective than dispute settlement to address national security-motivated trade intervention. More broadly, we propose creation of a platform for governments, supported by relevant international organisations, to enhance transparency and assess the effectiveness and magnitude of the spillover effects of trade/related policies of systemic import. This would serve to help identify efficient instruments to achieve economic and non-economic goals and inform WTO reform discussions on subsidies and discriminatory trade policies. Plurilateral cooperation among like-minded nations offers a pragmatic pathway to address spillover effects of policies to achieve security and other non-economic objectives but requires a stronger governance framework to ensure consistency with an open multilateral trading system.