The case for free trade has always been a tough sell. While trade is an economic endeavor, trade policy is the product of politics, where perceptions often matter more than facts. Domestic politics, national security concerns, and geopolitics conspire against the economics and the prospects for resuscitating multilateralism.
The world remains deeply connected on trade despite political turbulence across continents. Trade as a share of global value grew by 23%, from 46.8% in 2001 - the year China joined the WTO - to 57.6% in 2019. By this metric, the world became more integrated in the first decades of the 21st century. But trade as a share of global GDP peaked between 2001 and 2008. Since then, globalization through trade has declined.
Despite this downward trend, we continue to reap the benefits of trade from imports, which deliver more competition, greater variety, lower prices, improved quality, innovation, and specialization. The economic diversification enabled by trade liberalization increases efficiencies in production. This allows countries to absorb and rebound from shocks and generates higher living standards.