Open Trade and Sustainable Investment

Financial Crisis, nationalism and COVID-19 are all socio-economic pandemics in the last decade. Each one starts in a small corner of our world, then spreads across continents in a very short space of time. Each one is a surprise, and each one catches us unprepared. If we are to be prepared for the next pandemic or crisis, we need a different approach to economics. It has to be possible to generate cascading systemic events within our models. We argue that this requires making the importance of social interaction central to economic models. Social foundations determine the rules of the game, how we interact with others and the ultimately the resilience of the economy.

This Global Table will argue the need to put social foundations at the center of rebuilding macroeconomics and economic policy.

While the world economy continues to be as connected by trade in goods and services as never before, the institutions governing global trade face an enduring crisis. Complemented by my-country-first narratives and rising tariff barriers by an increasing number of political leaders around the world, free trade is challenged. New types of trade, in services and data, create new challenges and require multilateral agreements to adequately govern them. And the COVID-19 pandemic makes the weaknesses of the optimized global production networks apparent. All these issues and problems have in common that the people can no longer fully benefit from trade. After a long period with a trading system fulfilling predominantly corporate interests, it is now time to step back and ensure a trading system that is centered on human needs and gains and that benefits all countries. This Global Table will discuss the required policy approaches.