This month’s conclusion of the Bali World Trade Organization meetings was hailed by many business leaders and politicians as a major step forward for multilateral free trade, and an important step toward resuscitating the current round of WTO talks. But in reality, the results of Bali were minimal—officials at the meeting failed to reach any consensus on most of the substance on the table for the next WTO round, instead just deferring any substantial items on the WTO agenda.
And, the Bali meeting obscured some far more disconcerting facts about the state of trade. Since the end of World War II and the birth of the modern international economy, business leaders have come to accept an iron law: Global trade always expands faster than global economic growth. Between the late 1940s and 2013, that assumption held true almost every year. During that time period, trade grew roughly twice as fast as the world economy annually, as fresh markets opened up, governments signed free trade pacts, new industries and consumers emerged, and technological advances made international trade cheaper and faster. Now, this iron law may be crumbling. Over the past two years, international trade has grown so slowly that it has fallen behind the growth of the world economy, which itself is hardly humming.