Executive Summary
Global trade policy is at a crossroads. For decades, trade liberalisation was guided first by macroeconomic principles – Trade Policy 1.0 – and later by firm-level insights and global value chain integration – Trade Policy 2.0. Both approaches shared a liberal, rules-based logic grounded in comparative advantage and multilateral cooperation. Today, that continuity has been disrupted. A new paradigm – Trade Policy 3.0 – is emerging, marked by resilience, strategic autonomy, and economic security as the guiding objectives of trade policymaking.
Three major disruptive forces have driven this shift: the pandemic’s exposure of supply chain fragility and the resulting push for strategic autonomy; the revival of industrial policy amid geopolitical tensions and the weaponisation of trade; and the growing influence of technology, data, and digital governance on cross-border relations. Together, these forces have replaced the efficiency-oriented “win-win” logic of past decades with a precautionary and competitive zero-sum mindset. In Trade Policy 3.0, success is measured not by trade growth or GDP gains but by reduced dependencies and greater resilience.
This policy brief outlines three plausible futures. An Immunity scenario sees the rules-based system adapt and absorb new priorities. A Sclerosis scenario leads to institutional stagnation and policy inertia. A Contagion scenario risks a breakdown of multilateral norms and widespread protectionism. Whether Trade Policy 3.0 becomes a stable new equilibrium or a transient phase will depend on how policymakers reconcile openness with security, and whether cooperation can once again anchor the global trading system.
Introduction
Trade policy is no longer what it used to be. In a relatively short period of time, the trade landscape evolved in a fundamental way as a result of several powerful systemic forces, combined with the sudden and disruptive approach adopted recently by the U.S. vis-à-vis the current global trading system. This new US approach to trade policy has triggered claims that we are entering a new trading order, labelled the “Trump Round”. The former U.S. Trade Representative Michael Froman also argued that the postwar rules-based system is under unprecedented stress, as rising geopolitical rivalries erode the foundations of cooperative liberalisation.
While such arguments are far from being unanimous among trade experts, the idea that trade policy may sit at an important crossroad is supported by many recent geopolitical changes. This policy brief takes a “what if” approach, in an attempt to map several possible scenarios for the immediate future. To fully understand the historical context of the present situation, the next section briefly summarises the main evolutionary phases – from Trade Policy 1.0 to Trade Policy 2.0 – of global trade policy across several decades. Section 3 discusses some of the disruptive forces that foreshadowed the emergence of the current debate about the future direction of global trade policy. Section 4 sketches the contours of a potential Trade Policy 3.0 phase, shaping the global trading system in ways that few had previously fully anticipated. The concluding section summarises the key messages and puts forward a few open-ended questions.
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To read the policy brief as it was published on the European Centre for International Political Economy website, click here.