Past as Prologue? Historical Patterns and Discontinuities in Modern Trade Wars

Abstract

International trade law is under siege. We face imminent stasis in WTO dispute settlement. Substantively too, the rapid outbreak of unilateral deployment of tariffs by the U.S (and then retaliation by China) is putatively WTO-illegal. These developments have shocked the community of practitioners and scholars of the WTO. Against this backdrop, it is tempting to position the current trade wars as a unique threat to both globalization and its institutional manifestations, like the WTO. To my mind, that claim deserves, at the very least, serious assessment. This is not the first time in its modern history that the system of international trade law has been subject to escalating resort to unilateral protectionism by its dominant power. There are important lessons from past trade conflicts that can guide our prescriptions on productive (and even likely) future outcomes, while bearing in mind differences in degree and orientation. A logical comparator here is the dramatic rise of Japan as an economic competitor to the U.S through the 1970s and 1980s (in a period that both preceded and tracked the Uruguay Round negotiations) and the shift in unilateral and multilateral strategies employed by the U.S to manage trade conflict with Japan. This comparator is routinely dismissed by most commentators, largely because of the role of the U.S as a guarantor of Japanese security. While that security umbrella is an important difference when considering the fractious relationship between the U.S and China, there are thick undercurrents in commonality (both substantively and sociologically) that transcend points of variance.