It is time to "design a form of globalisation that reconciles the benefits of free trade with the need to protect the vulnerable and coordinate climate policy, while allowing national control over key strategic interests". This is what a group of progressive economists called for at the Berlin Forum New Economy congress last week in their "The Berlin Summit Declaration - Winning back the people".
It was only in March this year that my colleague Tobias Lentzler and I presented a concrete concept for shaping this form of globalisation. In our BKHS Perspectives #5_2024 entitled "A trade paradigm for the age of geoeconomic competition: Not economic, but human security", we call for international trade to be reorganised with the help of the concept of human security. As a new trade paradigm, human security places human well-being at the centre of trade policy and complements it with issues of sustainability and national security.
From globalisation to geoeconomics
The term geoeconomics refers to the use of economic means to achieve strategic and security-related goals. The current rediscovery of geoeconomics was favoured on the one hand by the structural deficiencies of the international trading system and on the other hand by the simultaneity of multiple global crises.
After the Cold War, globalisation began its triumphal march. National economies around the world began to integrate and numerous new institutions were established to manage world trade.
The economic impact of the financial crisis of 2007/08 fundamentally shook the existing system for the first time. Then, starting with the Brexit referendum in 2016 and the election of Donald Trump as President of the United States in the same year, numerous events highlighted the profound challenges of globalisation. Many see the changes brought about by globalisation as the cause of their economic stagnation or even social decline. Distrust in democracy, economic nationalism and protectionism have been gaining traction ever since. The European elections in June 2024 are just the most recent event that has once again brought this development into sharp focus.
Economic security alone is not a solution
The international order is currently in a polycrisis. In view of the simultaneity of crises in geopolitics, public health, the environment and the economy, globalisation is (rightly) no longer equated with the opportunities of free trade, but is instead associated with risks. The international economic order seems to be fragmenting, mostly along nationalistic and ideological lines. The liberal hope that economic interdependence would make wars unlikely has proved to be wrong.
Economic dependencies have become a matter of national security. They make a state vulnerable, as access and supply can be denied, interrupted and exploited. Economic interdependencies have become an important foreign policy instrument: States use asymmetric economic dependencies as a means of exerting pressure to achieve strategic goals.
International trade policy yes, but please safe, green and fair
The current polycrisis bluntly shows the mistakes of the free trade-based globalisation of the 1990s. In the meantime, the international trade order has changed. Instead of the former trust in unregulated markets, the international trade policy of the European Union (EU) is now mostly characterised by foreign and security policy considerations: Economic security is the order of the day.
International trade should first and foremost be a means of promoting global prosperity. We will only achieve this in the long term if global supply chains become resilient to geopolitical tensions, if they are designed sustainably, take planetary boundaries into account and if they enable decent work and a good life. Accordingly, we need to call for a reorientation of our trade policy paradigm that puts people at the centre.
Human security as a new trade paradigm
In view of the current polycrisis, the interplay between politics and economics must be recalibrated. The concept of human security helps to reshape international trade. As a trade policy paradigm, it prioritises individual well-being rather than limiting itself to open markets and narrow national security concerns. It opens up the trade policy approach and requires balancing different interests in terms of human needs. Linking trade policy and human security thus enables a comprehensive and new view of existing paradigms
Human security is a political concept that states can use as a political instrument for their policy agenda. At the centre of this approach is the role of the state as an active shaper of the global trade order. In light of this development, the concept of human security offers policymakers a way to combine economic and political ambitions by designing a global trade order that consciously incorporates political objectives.
As active designers of this order, states can use international trade policy as a tool to tackle some of the most pressing global challenges of our time: social inequalities, climate change and increasingly escalating international rivalry.
Read a more detailed analysis on the topic by our Global Markets and Social Justice Programme Director Dr Elisabeth Winter and Tobias Lentzler in the above-mentioned BKHS Perspectives #5_2024 entitled "A trade paradigm for the age of geoeconomic competition: Not economic, but human security".
