The international trade regime is facing an existential shock. Its flaws and failings are not new but the sheer scale and determination of the attacks against it are leaving many progressives reeling. Many of us are caught on the back foot as a government we abhor paves the way for changes that we have been long been calling for – even if we ground them in a fundamentally different set of values.
The current chaos makes it more urgent than ever for the new economy movement to articulate and convey a comprehensive vision for international trade. This is a hard challenge but one that we have to rise to. To retreat from it will leave the trade policy arena to those who are the least committed to our planet, to the rich diversity of its people and the need to take care of each other.
New economy principles for trade
What do we want from international trade, and what must its rules be for it to support the economy we want? Identifying the objectives that we want the trading system to foster is a good place to start. The WISE framework (Wellbeing, Inclusion, Sustainability and Equal opportunity) is one articulation of new economy objectives. This and other frameworks – Doughnut, GANE, Human Rights, Wellbeing – all prioritize the well-being of people and natural systems over the pursuit of economic growth alone. They pay attention to future generations and measure success not just by gross domestic product (GDP) but by how well people are doing. Other key principles and objectives are:
- Distribution of economic benefits, both between countries and within countries, including limits on corporate concentration and extreme wealth,
- Internalization of environmental and social costs associated with traded goods and services,
- Sufficiency and sobriety,
- Recognition of invisible contributions to economic activity such as care or ecosystem services,
- Democratic processes for formulating and implementing trade policies,
- International cooperation and solidarity,
- Holistic viewpoints and full systems analysis.
The trading system that was
These principles and objectives differ starkly from those of the trading system that we have known since the 1940s.
For all its faults, international trade can be credited with having created millions of new jobs and improved living conditions for vast numbers of people. The system’s stated aim was to spread prosperity around the world through solidarity and trade. Affluent countries could share their wealth by purchasing from less prosperous ones. Many of the system’s founders saw trade as but one part of a set of mechanisms designed to maintain world peace through international cooperation, with the UN’s Economic and Social Council and human rights system there to ensure that social progress accompanied economic advancement.
As we know, things didn’t quite pan out that way. The economic parts of the system quickly took precedence, leaving social aspects aside. Noone doubted that some people would gain and others would lose from increased trade. But insufficient attention was paid to how compensation would be provided, so redistribution was never properly deployed. Also, the initially-envisaged anti-trust mechanisms did not come into being. This enabled what is perhaps the most insidious feature of international trade today: the immense and continually growing concentration of power amongst a small number of corporations.
The internationalized economy reproduced and increased inequalities on a global scale, extracting labour and resources from the less powerful. The system did not acknowledge its colonial roots; in fact, the regime has over the years incorporated new ways to extract wealth from the majority world, most recently under the guise of rules on e-commerce. Furthermore, the emphasis on steadily expanding production and demand clashes with the finite regenerative and absorptive capacities of the global ecosystem.
Proposals for change
These problems are well-known but have not prompted the necessary changes. There have been attempts but most come nowhere near complying with the principles that a new international trade regime requires. They have tended to be issue- or country-specific (e.g. reducing plastics pollution through trade, or improving majority world countries’ economic potential through the African Continental Free Trade Area), or segmented and lacking systems thinking (e.g. protecting workers’ rights). For instance, calls for trade to enforce higher labour standards in majority world countries’ export sector weakens their economic prospects.
A few hold potential from a new economy perspective, including three we heard about at the Tipping Points meeting last November. La Via Campesina and the Agreement on Agriculture ReImagined are proposing alternative frameworks for food trade, and the Just Transition for Africa puts forward a vision for the continent to draw on its vast resources to wrest back economic power. Elsewhere, the Alternative Trade Mandate Alliance and Our World Is Not For Sale have drafted proposals for transforming the international trade regime in a way that many of us would agree with.
Articulating the new economy vision
Now the global trade framework, so unsatisfactory, so hard to reform and so hard to challenge, is unravelling. A major economy is jumpstarting localism, bringing manufacturing home. SUVs, fast fashion and disposable plastic toys have suddenly got more expensive, heralding a reduction in wasteful consumption.
Observations like these have prompted discussion amongst experts and new economy observers alike about how such trends match or diverge from our vision. We know that their provenance and their premises make them abhorrent, but how do we explain our reasoning and distinguish our agenda from that of the nationalist authoritarians? More significantly, what is our proposal for the future system that will emerge from the ashes of the global economic order that is coming to an end? After all, there is clearly no going back. And to paraphrase Fadhel Kaboub, if we don’t articulate our own strategic vision, we’re going to be part of someone else’s.
The task ahead of us is a daunting one. It will involve disentangling many different threads, sharing knowledge and experience across the different fields in which we work and considering how we get from where we are to where we want to be.
Take the question of localization. Prioritizing consumption of goods produced close to home reduces the environmental harms of shipping and air freight. Supporting local production strengthens communities and creates wealth that can more easily be distributed to those who created and added value, and can more easily be reinvested to support what people need. Yet we must grapple with the question of whether local is always best and define the criteria we use to determine what goods and services we favour local production of, and which we want to trade, bearing in mind the full, global, impacts of the move away from the current model.
Our vision must include consideration of the millions of workers who rely on export jobs in majority world countries, whose livelihoods are being decimated by tariff uncertainty. We need to build a clear pathway for the just transition out of export-oriented fast fashion, and avoid defending a rigged and wasteful globalisation model in the name of jobs. Part of our task will be to reclaim the narrative, in this case shifting away from a workers vs. workers to a workers vs owners narrative. We must amplify the message that billionaires and corporate concentration – not foreign workers – are the problem.
A complex and necessary collective task
A complex set of factors make up and affect international trade policy. Outcomes are affected by the rules governing trade and also by monetary policies, capital flows, debt structures, geopolitical dynamics, firm-level linkages, lack of global rules enabling fair taxation of profits, absence of effective global environmental and social protections and many other factors.
Developing a comprehensive new economy vision for international trade will require us to engage with all of these topics. Some are frighteningly technical and it’s unlikely that any one of us has detailed familiarity of more than a few of them. Collectively we cover a lot of ground. Working together, we can pool our knowledge, challenge our understandings and articulate our priorities and our boundaries so as to define a joined-up, coherent and comprehensive vision and set out a plan.
Beyond bringing our ideas together, alliances can help us build our collective strength and ensure that our ideas reach the broader audiences that we need to engage to activate change.
The task will not be easy. But it is essential. After all, those with whom we disagree will have their vision and plan ready for when the time comes to rebuild the international trade system.
With thanks to Sophie McKechnie, Luca Miggiano, Sharon Prendeville and Tobias Troll for their contributions.
References
Alternative Trade Mandate Alliance (2013) Trade: time for a new vision.
Richard Heinberg (2025) How Eco-Localism Differs from Tariff Terrorism, Resilience.org
Vincent Liegey et al (2016) Neither protectionism nor neoliberalism but “open relocalization”, the basis for a new International.
Local Futures, Promoting Localization Globally.
Our World Is Not for Sale (2021) Turnaround: New Multilateral Trade Rules for People-Centered Shared Prosperity and Sustainable Development.
Youba Sokona et al. & Independent Expert Group on Just Transition and Development (2023) Just Transition – A Climate, Energy and Development Vision for Africa.
For more detail:
Abhijit V. Banerjee & Esther Duflo (2019) The Pains from Trade, in Good Economics for Hard Times.
Christian Felber et al (2024) A New Paradigm for the EU’s Global Trade Strategy.
Jason Hickel et al (2022) Imperialist appropriation in the world economy: Drain from the global South through unequal exchange 1990-2015, Global Environmental Change, Volume 73.
Dani Rodrik (2024) Reimagining the global economic order. Review of Keynesian Economics, Volume 12.
Caroline Dommen
Caroline Dommen is a Board member of APRES-Ge, Geneva’s social and solidarity economy network, and leader of the Agreement on Agriculture ReImagined Project. Her work focuses on international trade, gender equality, human rights economics and food systems.