The Paradigm of Free Trade, which was born with Adam Smith and David Ricardo, the “founding parents” of liberalism, reached a heyday in the second half of the 19th century, was the steam and railway ship. He collapsed with the great depression, but resurfaced in the postwar, in the shadow of Gatt (1947) and, decades later, (1995). The work of these almost 80 years is in demolition.
The GATT (General Trade and Tariff Agreement) was signed in the frame of US -driven multilateral institutions. Its eight rounds of negotiations, completed by the World Trade Organization (WTO) establishment, were based on the “most favored nation” clause (MFN).
MFN is the foundation of a non-discriminatory commercial system. It prescribes the obligation to extend the lower rates granted to a commercial partner to all other partners, with the lonely exception of free trade agreements. In this way, it protects the global exchanges from the profusion of protectionist measures that, applied to the 1929 crisis, accelerated the march of world economic depression.
Gatt’s rounds invariably suffered the criticism of the leftist currents, which interpreted them as vehicles of the interests of rich countries and large corporations, to the detriment of peoples. At the beginning of the Millennium round, the first of the WTO, in 1999, 40,000 anti -scorer protesters starred in the “Battle of Seattle.”
Globalization, an open stage with the dissolution of the USSR (1991) and consolidated by the China entry into the WTO (2001), led to the reduction of barriers to trade, increased financial exchanges and the assembly of global supply chains. From the beginning, the left has prophesied that globalization (“neoliberalism” in militant language) would cause expansion of inequality between nations and misery in poor countries.
Never has a forecast proved to be so wrong. Over the next 23 years of China’s entry into the WTO, the average annual GDP growth of high -income countries was 1.9%, against 5.5% for middle and low income countries, 4% for sub -Saharan Africa and 2.3% for Latin America and the Caribbean. In this long range, despite the global financial crisis (2008-2009) and Covid’s pandemic (2020-2021), misery has been greatly reduced by almost all developing countries.
Globalization has produced deep economic shocks precisely in rich countries, less by the effects of commercial competition and more for the implications of the digital revolution and the decline of traditional industries. The rise of the nationalist right in the US and Europe is partially due to social displacements associated with such economic shocks.
Trump blames trade opened by the alleged US decline-and is engaged in the mission of reversing globalization. In his tariff war, he ignores the rules of the WTO, unilaterally imposing discriminatory tariffs on each commercial partner. In this step, the power that appears as the largest importer in the world fragments the global commercial system in a collection of unequal bilateral agreements.
The US President, with his executive orders, defeats “neoliberalism,” triumphing in what Seattle’s activists failed with their Molotov cocktails. The world left leader is called.
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