On Syracuse University Week: Global trade has been a major topic in recent headlines.
Kristy Buzard, associate professor and Melvin A. Eggers Economics Faculty Scholar, explores the power of multilateralism.
Kristy Buzard is an Associate Professor of Economics and Melvin A. Eggers Economics Faculty Scholar at Syracuse University. She received a Ph.D. in Economics from the University of California San Diego and a B.A. from Drexel University. Her current research focuses on the formation of trade policy, political uncertainty, conflict, and gender inequalities. She is particularly interested in the impact of international institutions, government structure and domestic political pressure on the possibilities for international cooperation.
When Trade Moved Faster: The Power of Multilateralism
In 1930, the United States sharply raised tariffs under the Smoot-Hawley Act. This was one of the most significant increases of trade barriers in U.S. history—and the last major spike until the recent rise in global tariffs.
In the years that followed, the U.S. began to reverse course, responding to the economic fallout from Smoot-Hawley and the political backlash it triggered. The Reciprocal Trade Agreements Act of 1934 gave the executive branch new authority to negotiate tariff reductions, and the U.S. went on to sign nearly two dozen bilateral agreements with countries like the United Kingdom, France, Canada, and Brazil.
These trade agreements reflected the simplicity of the global economy at that time. Trade in services, digital trade, and intellectual property issues were not yet a major part of the landscape. Instead, these agreements focused almost entirely on tariffs. Without the complex provisions needed in modern deals, the agreements were pretty short. Instead of hundreds or thousands of pages, most were only a few dozen pages long.
In 1947, the U.S. changed tack, instigating the first multilateral trade negotiations. With negotiations that lasted just six months, the General Agreement on Tariffs and Trade achieved roughly the same degree of progress as the previous twelve years of bilateral efforts.
This historical comparison helps explain why current bilateral negotiations have been slow to deliver results. In the past, one-on-one trade deals took years to accumulate meaningful tariff reductions. It wasn’t until the U.S. pivoted to a multilateral approach that liberalization accelerated significantly.
The postwar shift toward multilateralism did more than speed up negotiations—it laid the groundwork for the modern global trading system. Rebuilding that kind of broad cooperation takes time, especially in a more complex and contested global economy. We shouldn’t expect it to happen quickly.
