What Is the Impact of the Rise in Populism on Trade Agreements

Secondly, dispute settlement mechanisms have been revised. The general (i.e., governmental) dispute settlement provisions of NAFTA have not changed with the adoption of the USMCA, although some chapters and articles are no longer subject to dispute settlement. Criticism has focused more on the investor-state dispute settlement (ISDS) mechanism. President Trump has often spoken out against the ISDS system, claiming it poses a threat to U.S. sovereignty. Footnote 28 On the other hand, business groups have pointed out that abolishing the system would hurt American businesses and workers. Ultimately, the USMCA has made broader changes to ISDS that are likely to have a greater impact on other free trade agreements and bilateral investment treaties that the United States frequently signs. Although foreign investors have never won an ISDS lawsuit against the United States under NAFTA, the Trump administration has set out to adapt the existing framework. Under the USMCA, the practice of ISDS between Canada and the United States has ended.

For Mexico and the United States, ISDS is limited to government contracts in the areas of natural gas, power generation, infrastructure, transportation and telecommunications. In addition, exceptions apply in cases where claims for direct expropriation are invoked and all domestic remedies have been exhausted. The changes that have been initiated clearly indicate an attempt to restore and strengthen U.S. economic sovereignty over other actors. According to Lighthizer, „the more limited availability of ISDS under the USMCA reflects the government`s broader efforts to ensure that our trade and investment rules respect our sovereignty and right to regulation, reduce exposure to defensive litigation, and reduce or eliminate incentives to outsource production and jobs.“ Footnote 29 I do not blame China or any other country, many of which exist, for exploiting the United States in trade. If their representatives get away with it, they are just doing their job. I would have liked the previous governments of my country to see what has happened and to do something about it. They didn`t, but I will. Footnote 4 With regard to foreign policy, the effects of international policy on (domestic) populism are further analysed (cf. However, Verbeek and Zaslove 2017), the nature of populist foreign policy and the impact of populism on the international stage are presented to a much lesser extent (Verbeek and Zaslove 2019). While the focus is often on populist (party) positions on various foreign policy issues (cf.

Coticchia and Vignoli 2020), less attention is paid to real results or manifestations of populist sentiments or the translation of populist preferences into global politics. This trend is also reflected in the literature on Trump`s foreign policy. While Holland and Fermor (2021) describe Trump`s populism as a revival of „Jacksonian populism,“ Friedman Lissner and Rapp-Hooper (2018) argue that Jacksonian populism and unilateralism – as manifested in Trump`s „America First“ policies – simply make the model of U.S. global engagement unpredictable. Peterson also sees a potential threat from populism, although he points out that „continuity often outweighs change in American foreign policy“ (Peterson 2018: 40), and therefore, Trump`s influence should not be overstated. While Biegon (2019) views populism as a means in Trump`s foreign policy strategy of divestment at the LIO, Homolar and Scholz (2019) show how narratives of uncertainty inspired by populism (e.g. B, conversations about others exploiting the „American carnage“) helped him win the 2016 election. In general, as Lacatus points out, „populism motivates President Trump`s foreign policy approach, which is characterized by a break with the fundamental principles of the United States` postwar global project – internationalism, commitment to open trade, and commitment to multilateral rules and institutions to promote liberal order“ (Lacatus 2021: 33). While most studies describe how populism has influenced Trump`s foreign policy rhetoric about a „globalist liberal elite“ allegedly conspiring against „the American people,“ little has been said about how the government`s actual action should heal the situation. Since the purpose of this article is to assess the impact of populism directly on trade policy and indirectly on the IOL, we now turn to the provisions of the recently adopted USMCA. Through selected measures, we examine the extent to which each section of the USMCA confirms „populist corrections“. The aim is to show how the changes to NAFTA are used to describe who „the people“ is and how the measures are presented as a „victory“ for „the people“ and as protective measures for the implementation of the „will of the people“.

Our goal is therefore not to focus on the correctness of these arguments and measures, but to use them to assess the impact of populism. While it is not possible to assess all the changes in this paper (from provisions on intellectual property rights to performance requirements for investment and environmental standards for the telecommunications sector), the selection of topics provides a good indication of the populist implications. This fact alone will help to focus on trade with China and whether the WTO can be reformed to confront Beijing more effectively to the satisfaction of other members. „Although it has been compromised by COVID-19,“ he says, „and while there is resistance to some aspects of what we might call the globalisation package, I am still quite skeptical that it will make a big difference. It will be difficult to simply push back the economy that has become so deeply entrenched in the global economy. Thus, when it comes to trade and economic integration, social movements and ideologies that are against globalization must be taken into account. Everyone claims that globalization is the source of inequality and the inability to spread the benefits of trade. This vision, shared by political positions on both the right and the left, is currently growing rapidly. It also reinforces populist positions that loudly call for more „nationalism,“ which in turn hinders integration processes and openness to trade through trade and investment agreements. In fact, the right has seized on labour protectionism, the expulsion of immigrants and the closure of borders, as well as expressions of xenophobia. It adds to an effective proposal for trade protectionism with severe restrictions on the movement of people. In contrast, the left has limited itself to removing tariff and regulatory barriers without closing borders – a proposal that finds little credibility with populist voters.

From the crisis onwards, the trend has therefore been marked by the successive victories of Brexit and Trump, because their proposals – although they concern global free trade and European integration itself – are credible for their apparent effectiveness, based on post-truths fuelled by populisms of all couls. Populism is on the rise in the current political environment. Whether its rise is a consequence of the global financial crisis may be controversial, but one thing is clear: populism thwarts long-term economic progress. Michael Cox, a professor at the London School of Economics and an expert in international relations, says market access in Europe and America remains „crucial“ for China; Large US companies remain dependent on open markets and the EU continues to advocate trade liberalisation. The big drivers of globalization, he says, are still there. „Pence continues on track to gain support for trade deals,“ Financial Times, April 26, 2019. One would expect this to prompt governments to bring the production of essentials back to the pandemic within their borders. .