The rise of A progressiverse. TRADE turmoil could push forward-thinking nations closer together.

Monday 14 April 2025

A trade war might drive closer economic co-operation between liberal democracies.

Reversing the trend towards economic nationalism faster than some might think.

Nostalgia politicians have been on the rise since the 2007-08 financial crisis. Peddling a return to the good old days, whilst skimming over the injustices and lost opportunities of the past. But what if their target voter is dying off (as The Economist writes this week)? While the US doubles-down on bringing back manufacturing, might the rest of the advanced economies bring their talents together? A closer union of the progressives, still wedded to liberal democracy and free trade.

Economic integration is never straightforward, as the tensions of the European Union have often demonstrated. Some say push member states together faster, to achieve economies of scale from its fragmented talents. But others that doing so destroys the strengths of diversity, the value of many different cultures flourishing.

The same might apply when bringing together the nations who want to maintain the current trade order, and protect democratic norms. How easily would Canada, Europe, Australia, South Korea or Japan share common product and service standards, whilst respecting national sacred sectors?

But imagine the resources of the ‘progressiverse’ nations brought together.

The breadth and depth of Europe’s university research, design creativity, life sciences, tourism and hospitality. South Korea and Japan’s talents for efficient systems thinking, rooted in tradition but layered with vibrant modern entertainment cultures. The vast natural resources of Canada and Australia, alongside their modern professional services, finance and tech sectors.

A group open to other nations sharing the same goals. Including small and medium sized nations, used to nurturing comparative advantage in niche sectors.

In combination this could be a healthy competitor alliance to the US, more than a combative rival. A partner and ally, but with differing priorities. Not so dissimilar from the post Second World War global order. Where some US ties may weaken, others can grow stronger.

Yet something has been missing from the recent debate on trade. Quite possibly a deliberate positioning. All advanced economies have around 70% or more of their GDP generated from service sectors. But many give disproportionate airtime to the impact of car manufacturing (largely automated) or strategic sectors like agriculture. Meanwhile most voters are grafting in offices, labs, design studios or wherever their laptop takes them (and have been moving there since deindustrialisation across all these markets around 40 years ago).

Rising living standards won’t just rely on questions of where are physical goods are made - the focus of the current tariff moves. We will need to open-up trade, cooperation and competition in modern services - and challenge the companies who dominate our devices, media content, and our time.

It might not be the current phase of disruption that stimulates this alliance. But rather the combination of economic crises hitting one after the other in recent years. The 1970s, mid 1990s and late 2000s might have been unusually turbulent across the world, but the pace of interruptions has seemed relentless since then. We can’t disregard the possibility of a major climate event, to add to financial crises, a pandemic, authoritarianism, new wars, and trade severence.

Politicians are clambering to convince voters that democracy can still serve up the promise of better living standards. It many become obvious quickly that 1930s or 1970s protectionism and economic nationalism may only bring short term promise to a few. If electoral survival depends on freer trade to reboot growth and stifle inflation, then the old model of slow free trade agreements, negotiated over decades won’t work. And a commitment to faster integration becomes as necessary as a banking bailout, or a Covid vaccine.

The more some attempt to retreat from globalisation, the more every crisis reaches around the world quickly because of globalisation. We can’t ‘uninvent’ low cost travel that transports Covid or stimulates migration. We won’t break up the vast container ships that bring affordable goods to everyday stores. Nor pull the plug on the internet’s endless webs, whose origin lies in creating fast communications that can’t be stopped by a few missing links. And our natural world doesn’t recognise international borders.

If we’re to tackle the economic, social and technology challenges of the next decades, it’s going to need a shopping list of change. More commitment to healthy minimum standards for products and services (whether it’s for food, or social media consumption). A braver approach to fair competition in global tech and finance, challenging monopoly power and extreme reward. Even deeper collaboration in research, especially in sustainable energy, transport and biodiversity. A rebooting of global workforce skills, to harness human imagination and physical interaction in the face of AI and automation. And the buy-in of voters to a new settlement of citizenship, in a world of variable borders and migration.

What if there is the space, the ideas, the resources to give everyone a thriving home? That was the dream after the Second World War. For many, it came true.

To succeed, the progressiverse will need to step up faster - and convince us that there is an alternative route to common wealth.

Before those who want to take us back start to close the roads.