WILD CARDS - The Power Surge: Energy, Opportunity, and the Battle for America's Future - page 187

h is rise of global trade agreements has been accompanied by a pro-
liferation of even deeper pacts between pairs and groups of countries,
from the North American Free Trade Agreement (NAFTA), which
slashed barriers to trade and investment among the United States,
Canada, and Mexico, to the European Union, which at its heart is an
agreement to abolish most barriers to trade, investment, and human
mobility among countries within Europe.
h is open system of global trade has been remarkably resilient. Even
during the 1970s, when the world economy was beset by a toxic mix of
economic stagnation, rampant inl ation, the collapse of the gold standard,
and twin energy crises, open global trade continued its forward march. In
the late 1990s, the system weathered another onslaught, this time from
those who chafed at what they saw as the antidemocratic workings of
the WTO.
Yet a set of strong structural forces has appeared to sustain the
system. Helen Milner, a professor of political science at Princeton
University, has argued that the newfound political power of multi-
national corporations explains why the system survived the 1970s. 17
Firms whose operations and markets stretched across borders had
powerful reasons to want the global system to remain open. h e ability
to combine cheap labor in one country with advanced machinery from
another and innovative ideas developed in a third became increasingly
central to how business was done. h e ability to gain economies of
scale by selling to customers around the world also became highly
important. h ese forces are arguably only stronger today, as the role
of multinationals, something of a novelty in the 1970s, continues to
grow. Meanwhile, the success of export-led growth, i rst among the
so-called Asian tigers and later, most impressively, by China, created
another set of players with strong incentives to keep the global eco-
nomic system as open as possible.
But the world has previously seen periods where open trade seemed
inevitable just before it collapsed. h e 1930s, which saw economic stag-
nation beget tarif wars, is the most infamous example. Populist forces
unleashed by another deep recession could drive U.S. policymakers to
erect new barriers to trade. Meanwhile Asian countries—particularly
China—that have emerged from poverty on the back of export-led