Working Paper: CEPR ID: DP12620
Authors: Bernard Hoekman; Doug Nelson
Abstract: The post Second World War liberal trade order has been a driver of global economic growth and rising average per capita incomes. This order confronts increasing opposition, reflecting concerns about adjustment costs and distributional effects of globalization, and the ability to pursue national policy goals. At the same time the development of complex production relations distributed across many countries calls for cooperation on a variety of regulatory policies. Contrary to what is argued by opponents of globalization, this does not imply one size fits all rules that constitute a threat to national sovereignty and democratic legitimation. There remains an important ‘traditional’ integration agenda that centers on rule-making by major trading powers on policies that generate negative international spillovers. But the core challenge for the political economy of 21st Century trade agreements is to support regulatory cooperation to better govern international production and address the non-pecuniary externalities associated with greater economic integration.
Keywords: trade agreements; globalization; WTO; adjustment costs; economic integration; political economy
JEL Codes: F02; F13; F15; F60
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| post-second world war liberal trade order (F02) | global economic growth (F62) |
| post-second world war liberal trade order (F02) | rising per capita incomes (P17) |
| globalization (F60) | opposition to globalization (F69) |
| complex production relations (L23) | regulatory cooperation (L59) |
| lack of regulatory cooperation (F55) | negative externalities of globalization (F69) |
| regulatory cooperation (L59) | economic stability (E63) |