Revenge of the rich

United States President Donald Trump has put global trade in goods on the hot burner. It is impossible to predict the outcome of this reset in the world trade order, which is extremely complex in its interrelationships and has established itself as the only game in town for any country's economic growth and prosperity.

- SUNITA NARAIN

But it is important to take a step back and understand why it came about, what it has done to our world, and what can possibly be the way ahead.

First, let's peek into the past. This idea took shape in the early 1990s, when the world (largely the industrialized part) decided to replace the General Agreement on Tariffs and Trade (GATT) with a formal global institution, the World Trade Organization (WTO). The idea was that this would bring world trade to a free zone—trade rules would be applied to all with assured compliance. The world would be one.

There was another objective that has come to bite the industrialized world today. It was well understood that the cost of manufacturing was high in this world. Plus, labour was expensive and the cost of environmental regulations was prohibitive. This was the time when the already industrialized countries were feeling the pain of local air and water pollution—from acid rain to toxins in rivers. They were facing huge public outrages and so, the classic "not in my backyard" (NIMBY) principle came to be applied in the name of global trade.

Renowned American economist Larry Summers, who was with the World Bank in 1992 and went on to become president of Harvard University in 2001, wrote in an internal memo: "There is an economic logic to dump toxic waste in the lowest-wage country." A report in