This chapter details the history, politics, and recent trends and challenges of the multilateral trade system. The twentieth century witnessed a remarkable emergence of international institutions, and nowhere was their impact greater than in international trade. Following decades of depression and war, a global trading regime was initiated with the creation of the General Agreement on Tariffs and Trade (GATT) in 1947, which expanded steadily in both scope and membership through the twentieth century and culminated in the establishment of the World Trade Organization (WTO) in 1995. Underpinned by the philosophy that open markets and non-discriminatory trade policies promote the prosperity of all countries, and issued with a powerful dispute settlement mechanism, the WTO has been hailed as the most prominent example of cooperation between countries. At the same time, however, the WTO has been subject to internal and external criticism and now faces a number of difficulties.
This chapter focuses on the historical origins and the subsequent intellectual lineage of the three core theoretical positions within contemporary global political economy (GPE): realism, liberalism, and Marxism. ‘Textbook GPE’ privileges nineteenth-century understandings of political economy when discussing the pre-history of its own field. This helps explains GPE's treatment of feminist scholarship within the textbooks; feminism remains largely marginalized from textbook GPE, presented as something of a postscript to avoid accusations of it having been omitted altogether rather than being placed centre stage in the discussion. The chapter then looks at how the nineteenth-century overlay operates in textbook GPE. To do so, it makes sense to concentrate in the first instance on the issue that did most to divide nineteenth-century economists: namely, the free trade policies resulting from the general ascendancy of laissez-faire ideology. The most celebrated of the critics, Friedrich List, is treated much more as a dependable authority figure in GPE than he is in the history of economic thought. Indeed, in textbook GPE, the disputes between realist and liberal positions is very often presented initially through an account of List's work, despite the pre-history of liberalism being much the longer of the two.