This Working Paper draws on the mounting research produced by economists and political scientists that links support for populism with the economic, social and cultural grievances arising from record levels of economic inequality, driven by globalisation, in particular free trade and the technology revolution. It seeks to identify the sources of the harmful effects of free trade in WTO law and free trade agreements, and suggests possible measures to address these harmful effects. It finds in particular that the limited exceptions to free trade that were available to States during the "embedded liberalism" of the first three decades of international trade under the GATT 1947 have been eroded to the extent that the national "policy space" available to regulate in the public interest to avoid free trade's negative economic, social and cultural consequences are no longer adequate. Ever-deepening neoliberal trade relations since the late 1970s and under the 1994 WTO Agreements have largely removed the ability of States to protect nascent or vulnerable industries and jobs, and to protect national social and cultural values and interests. If international law is to play a role in mitigating economic inequality and reducing its potency in driving populism, ways and means to reopen this policy space for States need to be considered.
