Trust in International Trade

The growing emphasis on trading with “trusted partners” is often presented as a strategy for resilience, security or reliability. But it also signals a deeper problem: declining confidence that existing trade rules and institutions can protect participants from opportunism, coercion, or sudden policy shifts. In a well-functioning rules-based system, firms and governments should not need to screen partners by political alignment or perceived goodwill (trade following the flag), more so whether contracts will be honoured and enforced. This presentation distinguishes between trust in counterparties and trust in institutions, where economic development and globalisation historically progressed by shifting reliance from the former to the latter. Rising trade uncertainty pushes actors back toward relationship-based exchange, with measurable efficiency and distributional costs. Friend-shoring and de-risking policies highlight the risks of mistaking club-based trust for a durable foundation of open trade.