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Report  |  October 2021

Mercantilist reciprocity or free trade: Globalization at a crossroads

By Daniel Ikenson

The global trading system was built on the shaky foundation of mercantilist reciprocity. This approach has reinforced a flawed way of thinking about trade that helps explain the rise of protectionism and the ease with which some governments flout their commitments to the trade rules in favor of unilateralism. Domestic politics, national security concerns, and geopolitics conspire against the economics and the prospects for resuscitating multilateralism. Our collective challenge is to remind ourselves – indeed, to internalize – that trade barriers are not assets to deploy at the negotiating table, but impediments to domestic businesses, workers, and consumers.