Transformation of the trade policy paradigm: Theoretical and institutional aspects

The multilateral regulatory system is undergoing an era of transformation. For a long time, the central role in theories of international trade has been played by the functional approach, as a part of the neoclassical economic school. Its dominance has been supported by the World Trade Organization (WTO). The WTO crisis, as well as the widespread use of trade policy measures that are incompatible with the spirit of the Marrakesh Agreement, question the relevance of the main principles for regulating international trade. Its theoretical basis and related regulatory institutions require systemic restructuring. Modern trends often fall into the logic of political economy and institutionalism; there is a growing need to expand interdisciplinary research when analyzing theories of international trade. The article shows that systemic rivalry between countries does not exclude the possibility of multilateral cooperation to manage the spillover effects of trade policies. However, in order to keep the WTO relevant, its members should recognize that international trade is increasingly linked to systemic competition and is often a tool for a nation’s success.