Modern Free Trade Agreements – A Critical Appraisal (FEPS working paper in progress, September 2017)
The difference between the post-war development of international legal trade regimes and the context of the most recent free trade initiatives is that the disparate effects of trade liberalization tend to also become more visible in the most advanced economies in the world, in the United States and the European Union. This trend requires rethinking of trade arrangements that would provide adequate instruments, tools and policies when needed for restructuring. Careful calibration of such instruments, tools and policies not to distort, but to strengthen international trade, is something that can be called a “Bretton-Woods compromise” for the 21st century. It could provide an international legal framework conducive to long-term sustainable development and more resilient in different types of international financial crises that may appear in the future. The most important challenge in the process of deepening and widening the economic and legal integration is how to disseminate economic, technological, financial and other benefits to the excluded regions and parts of the population. The prevailing notion that any deepening of economic integration may lead to the “race to the bottom” via undermining the existing economic and social security should be addressed by policymakers. Comprehensive efforts to disseminate the benefits as widely as possible should be applied at the local, national and international levels. In doing so, local communities should be encouraged to launch different development strategies suitable to their comparative advantages, their potential and their needs.