For decades, plugging into global supply chains was the surest way for a poor country to build a manufacturing sector, raise wages, and grow a middle class. That pathway is narrowing fast as trade flows reorganize along geopolitical lines rather than economic ones.

Eswar Prasad, a trade policy professor at Cornell and Brookings Senior Fellow, has detailed the risk in a Foreign Affairs essay, "Hvylya" reports. The stakes, Prasad argued, extend well beyond economics: "The downstream political effects of such an economic retrenchment could make the backlash of the early twenty-first century appear quaint by comparison."

The mechanism is simple. Manufacturing jobs pay better than agriculture. Countries that attracted foreign demand for manufactured goods - from textiles to electronics - used that revenue to expand their middle classes. Many ran trade surpluses and reinvested the earnings. The model worked across East Asia, parts of Latin America, and increasingly in South Asia.

But the model requires open access to wealthy-country markets, and that access is shrinking. Advanced economies are pulling production back into geopolitically "safe" locations through reshoring and friend-shoring. The countries left out are often the ones that need global market access most. "If global trade and financial flows continue to fragment," Prasad wrote, "this path to development could be shut off," leaving a large share of the world's population without the prosperity that earlier waves of globalization delivered.

Prasad pointed to institutions as part of the solution. The World Trade Organization should enforce trade rules more consistently against all countries, including powerful ones like the US and China. The IMF and World Bank could earn back support from emerging markets by restructuring governance to give those countries voting shares that match their economic weight. None of it will be easy, he acknowledged, but abandoning the project entirely leaves the world "stuck in a doom loop."

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