Renewed strategic competition between the world’s two largest economies marks an end to the era of economic globalization that dominated the post-1991 era, following the collapse of the Soviet Union. The long geopolitical peace of that era liberated multinational enterprises to develop a vast system of global value chains in a world where firms could be “born global.” That world was essentially declared dead in April 2023 in a sure-to-be historic address by US National Security Advisor Jake Sullivan; a speech that instantly became known as the “New Washington Consensus.”
The message of the New Washington Consensus acknowledges the passing of the US unipolar moment and its replacement with U.S.-China geoeconomic power balance. While the old consensus leveraged global institutions and a WTO economic rulebook, the new consensus prefers strategic alliances and geopolitical trade agreements over free trade and economic multilateralism. Finally, the new consensus confirmed the enduring nature of recent trends by lending support to the idea of “de-risking” rather than the more abrupt and arguably less sustainable notion of “decoupling.” The new focus on economic de-risking by the world’s largest economy will radically impact global trade and investment flows, as well as serve as a model for other countries.
This seminar discusses these developments. Drawing on insights from legal institutionalism, the speakers unpack economic de-risking as a “rewiring” of the legal-economic nexus and re-regulation of the market economy, away from the WTO-based liberal market economy format into a market economy grounded in geoeconomic logic.
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