Instability of international trade and approaches to optimal regulation

Abstract

International trade regulation is viewed as a key function of managing the flow of goods and services in international exchange. The study analyses the primary challenges in the development and regulation of global trade and establishes the avenues for counteracting structural distortions and imbalances in international exchange. The methodological framework of the research includes the concept of foreign economic activity management and international trade theory. Analysis, synthesis, as well as historical and logical methods were used. The empirical base covers data from world trade statistics in the context of bilateral trade flows between key countries participating in international exchange. The authors propose their own methodology which is based on a descriptive assessment of atypical changes in international trade and stress factors in its development under the influence of the crisis, and takes into account the reliability of participants in international exchange. We prove that economic globalization has a decisive effect on the formation of imbalances and risks of a rise in protectionism in cross border trade. As shown in the research, the COVID-19 pandemic has exerted a special influence on export-oriented countries and global supply chains, which makes the impact of the current crisis on international exchange unprecedentedly inclusive. The current rapid recovery of global trade does not imply it being sustainable in the medium and long term, since foreign trade regulation in the key countries remains uncertain and strained. The progress of world trade multilateral regulation was virtually destroyed, as evidenced by the resumption of the discriminatory measures practice between countries. Strategies for managing the crossborder movement of goods will depend on the depth and effectiveness of mega-regional trade agreements, as well as on the rebalancing of trade between the leading players -the United States and China.