2. Global Trade Policy Regimes and Previous Crises

Economic crises and geopolitical conflicts have had a profound impact on the historical evolution of global trade policy regimes. As has been shown in previous research, conditions of trade have historically depended on the power relations and the structure of the international system as a whole. An open trade regime has required the support of a great power or powers. The supporting power’s inability to provide a liberal trade regime with the necessary political leadership has resulted either in the regime’s gradual erosion, or in the case of crises, a relatively rapid transition from one regime to another. The chapter discusses the dissolution of the classical global free trade system in the late 1800s and early 1900s and the turn towards protectionism in the First World War and especially in the 1930s economic crisis. It then looks into the creation of the global free trade regime after the Second World War under US hegemony and the liberalization of trade in the Western world. This was followed by globalization of free trade from 1980 until the financial crisis in 2008, when the share of global trade of GDP peaked. Finally, the effects of a multipolar international system and renewed geopolitical tensions after 2008 are discussed.