Industrial Policy and the New Internationalism: After the Liberal International Order

Financial and economic crises, pandemics, border closures, supply chain disrup-tions, wars, political uncertainty have fundamentally changed the way governments view economic development. Broad-based government interventions
are now the order of the day. Many names have been given to the emerging new economics of in-tervention: “homeland economics,” the “new productivism paradigm,” “supply side progressivism,” “neomercantilism,” “new industrial
policy,” or “Bidenomics”—in short, for the purposes of the article: “new industrialism.” Industrial policy is pro-liferating all over the world. The U.S. government is leading the trend of adopting such policies in an effort to boost
domestic industrial production. Describing this strategy as “industrial” was as unexpected as the adoption of a government inter-vention policy.
In a further surprising move, U.S. offcials speak about integrating domestic industrial policy with foreign trade policy as part of one “broader international economic policy.” Calls for an “alternative to the WTO” have also been repeatedly
voiced. A “new internationalism” is emerging.
These developments are unfolding against the backdrop of an ongoing trade war between the U.S. and China—probably the most dramatic economic event of the last decades. The trade war between the two superpowers is morphing into a
tech war. New industrial and trade policies primarily focus on maintaining, advancing, and developing new comparative advantages in the race for digital technology dominance. Economic statecraft, both as an ideology and as a tool in foreign affairs, is also becoming mainstream. New international economic agreements and new international marketcrafting refect these changes.
The contribution of this article sits at the intersection of two areas of legal scholarship: the rise of (domestic) industrial policy, and efforts to rethink international economic law—and the Liberal International Order (LIO). It frst presents
a novel conceptualization of contemporary international law. Instead of the more traditional classifcations, it unveils a “free market” and an “infrastructure” layer of international economic law; both are now challenged by the advent of the digital economy and the digital world. In the new international economic order, industrial policy shapes domestic and international trade policy, as well as broader foreign policy. The article is one of the frst contributions to provide a comprehensive legal analysis of the emerging new internationalism. While the focus is on the IndoPacifc Economic Framework for Prosperity (IPEF), it discusses other new international fora of cooperation such as the E.U.-U.S. Trade and Technology Council (TTC) and the Digital Economy Partnership Agreement (DEPA). All these agreements place digital technologies at the forefront. Finally, the article observes how new international economic greements are giving rise to new forms of international economic ordering and marketcrafting. It observes frst a transition from ultilateralism to plurilateralism; a transition from broad-based thematic coverage to minilateralism; and, from economics to geoeconomics—and accordingly from liberalization to national security considerations. The article then presents economic and technological principles of the new emerging international economic order and makes recommendations for new principles of a new digital order. It closes by advocating a greater integration of novel principles, such as human-centricity, technological due process, publicness, and interoperability in new and emerging international economic agreements.