Geopolitics should worry us more than protectionism

livemint.com:

free trade seems to be over. How will the world economy fare under protectionism?" This is one of the most common questions I hear nowadays. But the distinction between free trade and protectionism is not especially helpful for understanding the global economy.

Not only does it misrepresent recent history, it also misconstrues today’s policy transitions and the conditions needed for a healthy global economy. ‘Free trade’ conjures an image of governments stepping back to allow markets to determine economic outcomes on their own. But any market economy requires rules and regulations, which are typically promulgated and enforced by governments.

Moreover, when national jurisdictions are linked up through international trade and finance, more questions arise: Which countries’ rules should take precedence when businesses compete in global markets? In this light, it becomes clear that hyper-globalization—roughly from the early 1990s until the onset of covid—was not a period of free trade in the traditional sense. The trade agreements signed were not so much about removing cross-border restrictions as they were about regulatory standards, health and safety rules, investment, banking and finance, intellectual property (IP), labour, and many other issues previously in the domain of domestic policy. Nor were these rules neutral.

They tended to prioritize the interests of politically connected big businesses over all else. These businesses not only got better access to markets globally, they were also the primary beneficiaries of special international arbitration procedures to reverse government regulations that reduced their profits. Similarly, tighter IP rules—which allow pharmaceutical and tech companies to abuse their monopoly