Originally uploaded at SSRN.

Abstract

Events of the past few years, including the Brexit vote in the United Kingdom and the demise of the Trans-Pacific Partnership and election of Donald Trump as President in the United States, have reignited debates about the global trade regime. In particular, many have begun to question whether the trade regime has done enough for those who feel left behind by globalization. While some have held fast to the view that redistribution of trade’s gains is primarily a matter of domestic policy, others have suggested tweaks to the international trade agreements aimed at better spreading the wealth.

But what if the problem isn’t policy, but principle? The major international economic institutions of the last few decades have been based on and around a normative principle of “growing the pie” and “raising all boats.” Most policy tweaks that have been suggested assume this neoliberal principle, even while trying to soften it harder edges. But it’s not clear that those voting against trade agreements agree.

This essay reconsiders the normative basis of international economic law, searching for a new narrative that can reopen and reinvigorate trade politics while justifying and directing the regime going forward. Surveying various normative narratives put forward in the past, it asks what an embedded liberalism might look like in an era of complex transnational supply chains. It suggests that an international economic order built around a state’s obligations to provide for the welfare of its people might need to reorient around other policy issues like tax and regulations, shifting trade from the driver to passenger in international negotiations.

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