The coronavirus emergency is not only a public health crisis. With 30 million Americans unemployed, it is also an economic crisis. And it has exposed a hard truth about the modern global economy: it weakens American workers and has empowered China’s rise. That must change.
The global economic system as we know it is a relic; it requires reform, top to bottom. We should begin with one of its leading institutions, the World Trade Organization.
We should abolish it.
The W.T.O. was created in 1995 as the crown jewel of a new global market, a system designed by ambitious Western policymakers after the fall of the Soviet Union. Their aim was to create one giant, liberal international economy to support a new liberal international order.
The reformers wanted all the world to follow the same economic rules, so that capital, products, and people could move easily across national boundaries. Nation-states themselves would become less important in setting economic policy and new, multilateral institutions, like the W.T.O., would take on the role of managing the global economy.
It was a bold vision, and a major departure. The economic system it replaced had been created by America and its allies at the close of the Second World War and pursued more modest aims. The Cold War system sought to build up the free nations’ economies and to contain the Soviet Union. It took the independent nation-state as its basic building block, and encouraged trade and investment between nations as equal sovereigns. This system allowed each country to set its own internal economic policy and control its borders and trade.
But in the early 1990s, with America’s principal adversary gone, Western policymakers were in a messianic frame of mind. President George H.W. Bush promised a “new world order” of “open borders, open trade … and open minds,” a new international system based on liberal values to bring peace to the world. He and other internationalists wanted a new economic system to match.
That new order’s universal peace never quite arrived. Instead, the internationalists embroiled America in one foreign war after another. And their liberal economic order fared little better. It sent American production overseas, compromised American supply chains, and cost American jobs, all while enriching Communist China.
Take the World Trade Organization. Its mandate was to promote free trade, but the organization instead allowed some nations to maintain trade barriers and protectionist workarounds, like China, while preventing others from defending themselves, like the United States. Foreign agriculture won concession after concession, while American farmers struggled to get fair access to markets. Meanwhile, the W.T.O. required American workers to compete against Chinese forced labor but did next to nothing to stop Chinese theft of American intellectual property and products.
By Senator Josh Hawley, (R) Missouri
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