Trade governance rests upon certain economic assumptions and the ensuing political compromises made possible by the growth of an incremental legal consensus. The main economic assumptions are that trade will deliver upon the objectives of socio-economic development, stable, long-term employment opportunities and poverty reduction. These assumptions are theoretically sound, but are increasingly challenged by the complex political realities of global trade. The study of trade in the field of international political economy (IPE) has deep roots in the postwar disciplines of economics and political science. The literature on the history of trade regulation places the current system, with its emphasis on the legitimizing imprimatur of political power and the significance of binding treaty, into a more nuanced context in which present practices, while sometimes novel, are frequently older than most policy makers realize. In the two decades since the finalization of the Uruguay Round and the creation of the World Trade Organization (WTO), a host of significant issues have arisen as scholars and policy makers attempt to implement the WTO’s mandate and navigate the political waters of trade regulation as it relates to domestic law and policy. These include the set of issues raised by the broadening of trade regulation post-Uruguay Round to include trade related intellectual property rights and trade in services, the contentious issue of trade and economic development, and the issue of WTO reform.
Neoliberalism refers to a set of market-based ideas and policies ranging from government budget cuts and privatization of state enterprises to liberalization of currency controls, higher interest rates and deregulation of local finance, removal of import barriers (trade tariffs and quotas), and an emphasis on promotion of exports. While the effects of these policies have been quite consistent, they have sparked sharp criticism from the left. Critics pointed out the elites’ consistent failure in areas such as development aid, international financial regulation, Bretton Woods reform, the World Trade Organization’s Doha Agenda, and United Nations Security Council democratization. In the wake of the financial crisis of 2007–2008, the G20 held a summit in 2009 to discuss policy issues pertaining to the promotion of international financial stability. G20 leaders vowed to, among other promises, strengthen the longer term relevance, effectiveness and legitimacy of the International Monetary Fund and the World Bank, and to seek agreement on a post–2012 climate change regime. However, many intellectual critics of neoliberalism insisted that the G20 represented nothing new. Instead, they emphasize several urgent political priorities, such as: immediately recall and reorganize campaigning associated with defense against financial degradation; reconsider national state powers including exchange controls, defaults on unrepayble debts, financial nationalization and environmental reregulation, and the deglobalization/decommodification strategy for basic needs goods; and address the climate crisis by rejecting neoliberal strategies in favor of both consumption shifts and supply-side solutions.