Timeline: 2022-2025

Keywords: Trade Agreements, Flanking Measures

Funding: SNF Sinergia

International trade agreements typically benefit the national welfare of the nations that sign them. However, they
also generate economic displacements as well as negative social and environmental spill-overs. The traditional
approach to address these negative spill-overs has been to rely on domestic flanking policies, which are de-linked
from the trade agreement itself.

This approach, however, has not always worked well. Too often trade has been liberalized internationally, but
domestic lawmakers have failed to enact the needed measures to address economic disruptions and spill-over
effects on the environment and society.

This has sapped the support for trade. Popular resentment of ‘globalisation’ has driven anti-trade sentiments to
heights not seen since the 1930s in key geographies. A trend that has been intensified further with the COVID-19
Pandemic. This is having serious consequences for the multilateral trading system.

Inspired by early examples of “package treaties”, we will explore if and how trade agreements could become
politically realistic and socially effective vehicles to address these spill-overs more directly. This would be by
including the necessary flanking policies that offset the negative effects either (i) in the trade agreement itself or
(ii) anchored in the domestic legislation implementing the trade agreement. We call both options “package
treaties”.

Finding politically realistic and socially effective strategies would enable the gains of trade to materialize with the
appropriate re-distribution and corrective mechanisms in place. Detecting novel ways of how to maintain both
trade liberalization and the necessary adjustments have the potential of reshaping the way future international
trade agreements are developed.