International Trade and the Financial Crisis Implications of the Global Financial Crisis on International Trade and and Investment Regimes
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abstract
One of the most distinctive aspects of this economic crisis was the coordinated efforts of nation-states, led by the G-20, to address the crisis within their domestic borders. While globalization has helped to shift the power of the nation-state toward global markets consisting of both state and non-state actors, international institutions governing global markets and free trade consist of representatives of the nation-state. With this financial crisis, it is clear that the nation-state is still in the picture, for it has been the nation-state, with its robust stimulus packages and capital reserves, that has marshaled our slow exit from this financial crisis (at least for now). In terms of trade, though, the nation-state can also be a source of protectionism. Today I would like to focus on three main observations related to trade that the recent economic crisis has highlighted: *the emergence of protectionist tendencies by nation-states, particularly in times of economic recessions, as demonstrated by the recent domestic responses to the crisis; * the central role of the nation-state in its regulatory capacity vis-a-vis international institutions and the free market; * the role of international institutions, in particular the WTO, which have traditionally been focused on the nation-state, and which raise the question whether they are still the best model for today's more globalized world of state and non-state actors. I will conclude with some brief points about the role of the WTO as nations move forward in redirecting their economies in various sectors, such as renewable energy and climate change
