Free Trade Under Pressure: Perspectives for Globalization and Growth

Following two decades of increasing world economic integration, the growth in world trade has slowed down substantially in recent years. Also, in most regions, GDP growth falls short of the pre-crisis dynamism while monetary and fiscal macro-management tools hit limits of sustainability. In this environment, increasing reservations against conventional free trade policies have contributed to recent pivotal political developments such as Britain’s decision to leave the EU and the new political agenda in the United States. These developments give support to political trends towards protectionism in many countries, and threaten to undermine the world trade system. At the same time, the global marketplace sees significant shifts towards advancing players who will reshape the policy agenda. At the same time, landmark elections in important European countries may imply new perspectives for the future of the European Union and the Euro Area in particular.