ISLAMABAD – A research scholar at SOAS University of London has proposed dismantling the current multilateral trade system and replacing it with a “New International Economic Order” to protect developing countries from the disruptive effects of US trade policies.
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Professor Ha-Joon Chang highlighted that recent US tariff measures have sent shockwaves across the global economy, undermining the stability of the existing framework.
In a report submitted to the United Nations Committee for Development Policy, a subsidiary of ECOSOC, Prof Chang said the US’s withdrawal from multilateral trade agreements opens space for developing countries to play a larger role in shaping global economic rules. “While an ideal system includes every country, it is not impossible to move ahead without the participation of the United States,” he noted.
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Prof Chang cautioned that the US, which currently produces just 16.9% of global manufacturing output compared to 29% in 1985, cannot quickly rebuild its industrial base through tariffs or foreign investment. “The changes have to come from within, but domestic capacity is constrained by a capitalist system prioritizing shareholder profit over industrial revival,” he said.
The scholar highlighted that developing countries in Asia, South America, and Africa have increasingly diversified their trade partners, with China and the European Union becoming key players. This shift, combined with rising South-South trade and investment, presents an opportunity to create a New New International Economic Order (NNIEO), building on the principles of the 1974 New International Economic Order.
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The proposed NNIEO emphasizes national sovereignty over economic policies, regulation of transnational corporations, reform of the international financial system, knowledge transfer, and enhanced South-South cooperation. Prof Chang stressed that political solidarity among developing nations will be essential, and that strengthening collective action is crucial to ensure equitable participation in the emerging global economic system.