True success of free and fair trade is not to be measured by the flow of currency from one state to another. In a multilateralist world, free and fair trade encompasses a myriad of interconnected sociopolitical and economic complexities: macroeconomies, micro-regulatory mechanisms, poverty and income inequality, human rights, and climate change among many others.
Therefore, the goal of trade is not only for one state to capitalize on wealth more than the other state. It’s not even that both states mutually capitalize on more wealth than they had prior to the trade agreement. Rather, trade’s primary objective is to remove import-export barriers and increase trade; the promotion of trade agreements resulting in absolute gains cannot be divorced from the implementation of rules designed to promote collective goals.
Trade success means improvement of conditions and the protection of basic human rights in the state whose wealth is concentrated in its labor force. It means a capital-rich state stipulating that their investments will be to more eco-friendly factories. It means that a labor-rich state will be able to implement an economic mechanism where more people are lifted out of the poverty. It means a capital-rich state will have access to a wider range of goods, driving down consumer prices and improving quality of life. Trade is so much more than profits. It’s the engine of political, economic, and social liberalization.
Pluralism works fantastically as a set-up for democratic mechanisms – a system put in place where ideas are vigorously debated, a decision is reached by the people, and the minority accepts the decision of the majority. Trade is not that. Trade allows for the other side to simply get up and walk away.
For that reason, a hyper-pluralistic society (it doesn’t get more pluralistic than the entire world), makes it difficult for international organizations such as the World Trade Organization to effectively function in the capacity they would ideally want to. They create the “lack of universal endeavor” that the Wilkinson article explains about Nairobi (Rorden Wilkinson, Erin Hannah and James Scott, 2016). Perhaps global trade organizations – and their relative failures -will become a massive case study on the ramifications of hyper-pluralism.
As in any pluralistic society, it’s only natural for actors within that social construct to organize in poles where they can come together and push a collective agenda. The way we measure the success of trade in the modern global society highlights the importance of poles.
Jean-Pierre Lehmann, Professor of International Political Economy at the International Institute for Management Development, explains that the TPP will serve as a geopolitical counterweight to China, ensuring that the next generation of rules, so to speak, give American business the upper hand (Lehmann, 2015). That mentality towards free trade shows the inherent functionality of poles within the global system – how states will gravitate towards other states (in this case the TPP participants) with an underlying common and collective goal (undermining China).
Multilateralism, and this is being said by an advocate of multilateralism, has its limits, and just as it was argued for the UN Security Council, it’s perfectly okay to understand where those limitations are if it means improved efficiency. Regional trading blocs fits with the tenants of multilateralism and, while there are still concerns to iron out, regional trade is much more efficient in achieving the aforementioned goals (The Economist, 2012).
In an idyllic situation, states from all over the world would come together, promote free and fair trade, and push collective actions we can all agree are fundamentally important to humanity. But to do so, states would have to have, as Lehmann put it, “a need for generating a spirit of cooperation rather than confrontation and thereby reducing the inequalities between the key national players and one which is genuinely committed to diminishing global poverty” (Lehmann, 2015).
But we also know the world is far from ideal. The Economist article’s opening line showcases that almost-puppy-eyed optimism that everyone knows it feels good to have – “The Doha trade talks would be great if only they worked (The Economist, 2012). To put Lehmann’s words in more realistic terms, states would have to be willing to relinquish sovereignty and procure policies of relative gains that could erode a state’s power.
It’s hard to be optimistic about that. And frankly, maybe it’s meant to be that way. Perhaps regional trade is the compromise between relinquishing power and engaging in cooperation. After all, compromise is the best result yielded by pluralism.