The Past, Present, and Future of International Political Economy

The Past, Present, and Future of International Political Economy Through the Lens of Globalization and International Trade
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The Present and Future of International Political Economy (IPE): Through the Lens of Globalization and International Trade
While the term international political economy gained momentum in the 1960s through 1970s among political scholars and researchers, it describes a phenomenon whose seeds were planted during European explorers' discovery of the New Worlds. The end of World War II marked a critical juncture in which there was an increased need for international collaboration among nations and between regions. In the 1970s, however, the term became popular, sometimes replaced by a global political economy because of the significant changes that marked the period. Consequently, the terms are a common feature in political debates and international relations, with critical changes occurring between 1970 and today. The two changes include the rise of international trade (through FTAs) and the emerging prevalence of trade protectionism. The current paper examines two core changes in this period by focusing on the underlying forces that enable the changes.
Evolving Definitions of IPE
According to Marlin-Bennett and Johnson (2021), the concept of IPE encompasses the interaction between politics and economics involving the movement of organizations, people, ideas, goods, and services across borders. In the 1960s and 70s, the term gained moment due to problems in the global economy and inherent barriers to economic development in developing nations. Over time, the term Global Political Economy (GPE) was used interchangeably with IPE. The choice of GPE is motivated by the need to include multiple actors involved in the international economy. In other words, what happens across borders is not limited to only the interaction between states. Instead, multiple entities, including private business organizations, international business organizations, and individual citizens.
The international political economy domain gained prominence in the 1970s following the Arab oil embargo and the crises that ended the post-war era (Cohen, 2008). The realization that local political outcomes or activities impact international markets was the key lesson of the era. As a result, there was the intensification of cross-border activities, mainly through trade and development funds. The same period saw the emergence of transformational technological innovations that eased transport and communication across international borders. The number of multinational enterprises increased drastically through free trade agreements as organizations, especially developed nations, devoted resources to serving international markets. In the process, what is now known as globalization was set in motion? Two significant changes have been a focal point for both scholars and economists throughout these developments.
The Rise of International Trade
International trade is one of the critical features of the international political economy that has changed significantly since 1970. It refers to capital, goods, and services across borders. There are three primary forms of international trade: export trade, import trade, and entrepot trade. Export trade involves the production of goods and services in one country to serve the market in a different country. Import trade involves a country seeking goods and services produced in a different country. In some circumstances, a country can export a product, add value to the product, and import the product to a different country. In other words, international trade allowed global business organizations to establish operations in different parts of the world despite challenges such as tariffs, embargos, and trade restrictions. Further, the government increasingly began to hold capital in different countries as part of international trade.
While international trade was inevitable in an open international political economy, the primary force behind the development was the emergence of Free Trade Agreements. The history of Free Trade Agreements goes as far as 1860 when the Cobden-Chevalier Treaty was signed between France and Britain. According to the World Trade Organization, 420 regional trade agreements are in force globally. Out of these, the World Bank (Mattoo, Rocha, & Ruta, 2020) reports that almost 50% percent came into force following the 1970s international reorganization triggered by the end of the cold war. Therefore, through FTAs, international trade, a key feature of IPE, has developed to the levels experienced today. The role of FTAs was to minimize tariffs and quotas against entry of capital, goods, or services from international partners.
Across the public domain and political spectrum, people are divided on the consequences of international trade. The benefits of international trade are not debatable....