Free Trade
July 13, 2017
Has it reached a turning point?

Experts say free trade has lifted hundreds of millions of people from poverty in recent decades, but rich and poor countries alike have begun to doubt its benefits. Britain shocked the world last year by voting to leave the European Union, its biggest trading partner. Anti-free trade sentiment is on the rise elsewhere, and Donald Trump won the U.S. presidential election in November on a platform of economic nationalism. All of this follows the 2008 collapse of global trade talks, when poor countries balked at further moves to lower trade barriers. As a result, the era of expanded global trade may be at an inflection point. As the United States and Britain appear to be balking at further globalization, the European Union and Japan recently agreed to a new free-trade pact, and globalization proponents are searching for a country to replace the United States as the world’s leader on open trade.

A woman works in a textile factory in Nantong, China, on Dec. 10, 2016. China’s $1 trillion “One Belt, One Road” initiative seeks to boost trade in textiles and other products among Asia, Africa and Europe. (AFP/Getty Images/STR)   A woman works in a textile factory in Nantong, China, on Dec. 10, 2016. China’s $1 trillion “One Belt, One Road” initiative seeks to boost trade in textiles and other products among Asia, Africa and Europe. (AFP/Getty Images/STR)

On May 18, the White House officially notified Congress it planned to renegotiate the North American Free Trade Agreement (NAFTA). President Trump has called the 1994 pact “a total disaster” and threatened to withdraw from it altogether. 1 Renegotiation talks are expected to begin officially in August. 2

Trump, who on the campaign trail had bashed the 12-nation Trans-Pacific Partnership (TPP), which had been in the works for years, formally abandoned it shortly after his inauguration. Elsewhere, countries have been erecting barriers to trade at an alarming pace, according to the World Trade Organization (WTO), the international organization based in Geneva that is dedicated to eliminating trade barriers worldwide. 3

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