Globalization Persists

Starting in the Biden administration, if not before, a recurring theme among some analysts has been that the era of globalization is over, and the world is moving into a new stage. Numerous Biden administration officials, including Jake Sullivan and Katherine Tai, discussed this, arguing, to my oft-expressed annoyance, that the world trading system in place for the past 75 years had failed us and that it was time for a new paradigm, which they were implementing. It turned out they never implemented much of anything, although their unwillingness to pursue market-opening trade agreements was a notable missed opportunity.

The Trump administration has a different narrative—the United States as a victim—but it also rejects the “old” system as having allowed, if not caused, the damage to the U.S. economy and its manufacturing base. Both administrations have rejected the past, but Trump has been more effective, so far, in doing something about it. His tariffs have been erratically imposed, postponed, raised, and lowered so often it is hard to discern an actual policy, but the impact is clear—massive uncertainty that has made planning for the future impossible.

Even while uncertainty persists, not only about Trump’s intentions, but also about the half-life of his policies, his actions are being treated as the death knell for the global economy. That may well be true for the United States, but it turns out that it may not be true for anybody else. Trump’s message to the world is that the United States is no longer a reliable partner. The obvious corollary is to find other partners, and that is just what others are doing—with the United States on the sidelines. Here are some examples.

• United Kingdom–India Free Trade Agreement (FTA) — Status: Finished. Signed in May 2025. India, a notoriously high tariff country, agreed to cut tariffs on 90 percent of British products, although not to zero. Auto tariffs will decrease from over 100 percent to 10 percent. The agreement is estimated to increase trade by 2040 annually by $34 billion.
• European Union–India FTA — Status: Underway. Both sides committed to concluding the deal by the end of 2025. So far, eight of the twenty chapters are finished, primarily the easier ones. Sensitive agriculture products are excluded.
• EU–Mercosur Trade Agreement — Status: Concluded (pending ratification). The deal includes provisions to eliminate tariffs on over 90 percent of goods traded between the two regions. Mercosur includes Argentina, Brazil, Paraguay, and Uruguay, with Bolivia in the process of joining.
• UK Accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) — Status: Entered into force in December 2024. More than 99 percent of current UK goods exports to CPTPP members will be eligible for tariff-free access.
• CPTPP Expansion — Status: Underway. Multiple applications under review or invited. These include Costa Rica (underway); Ecuador, Uruguay, Ukraine, and Indonesia (under consideration); and China and Taiwan (no consensus to proceed).
• Canada–Indonesia Comprehensive Economic Partnership Agreement (CEPA) — Status: Finished. Signed December 2024; implementation planned for 2026. This is not a true FTA, but once fully implemented, over 95 percent of Canadian exports will receive preferential tariff treatment.
• Canada–ASEAN FTA — Status: Under negotiation. Intended to conclude in 2025. The most recent negotiating round was held in January.
• Japan–China–South Korea Trilateral FTA — Status: Proposed/Ongoing. Revived discussions as of March 2025. I’m skeptical this one will ever get across the finish line, but the restart of talks is a positive sign.
• United Arab Emirates–Türkiye CEPA — Status: Finished. In force since September 2023. The intent of this one is to increase bilateral trade by $40 billion within five years.

Not all of these are going to succeed, and, so far, none of them are really “gold standard” free trade agreements. But if you look at the hundreds of FTAs already registered with the World Trade Organization, most of them are not perfect agreements either, usually because they exclude agriculture. But that’s the point. The important thing about these new agreements is how much they are like the old ones. The world was never going to get to free trade in one giant leap; more often it has been two steps forward, one step backward, as we make gradual progress.

What is noteworthy is that it appears we are still making progress—in the same way and in the same direction as always. The difference is that the United States is not there; not under Biden and not under Trump. It is typical of Americans to think that we are leading—whatever we are doing is heading down the right path, with other countries running behind to catch up.

In this case, however, it appears no one is following. This is not good news for the United States, particularly our exporters. It means we will be left behind as countries find new partners and the world moves on without us, but at the same time I think it is surprisingly reassuring. The new negotiations tell me that the announcement of the old order’s death was greatly exaggerated, and that the case for trade liberalization remains a strong one. Since the current administration is not going to change its worldview, the challenge for U.S. companies is to find ways to stay in the game even as our government has withdrawn from it.

William A. Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.