Pundits and policymakers everywhere are bemoaning the rise of a new, inward-looking populism. Led by the likes of Donald Trump and Nigel Farage, those who’ve felt only globalization’s ill effects, not its benefits, have mounted a fierce counter-attack. Border-hopping elites fret that the whole process of opening up and knitting together the world through trade, capital flows and immigration may soon go into reverse.

They’re missing the point. Support for freer trade and greater openness had, in fact, begun to falter well before economic nationalists like Trump and Farage took centre stage. The same governments that count themselves among globalization’s greatest champions have been rolling it back steadily since the global financial crisis.

Their excuses are innocent-sounding and several: to protect national industries and iconic businesses; to secure export markets and competitive advantage; and above all, to prop up employment and incomes.

Despite oft-repeated warnings about avoiding the beggar-thy-neighbour policies of the 1930s, these governments allowed global trade talks—the so-called Doha Round—to stall as early as 2008. Nations, including the US, have instead pursued narrower bilateral and regional deals where they don’t have to satisfy so many different negotiating partners and can continue to protect key sectors. If these pacts are better than nothing, they more or less foreclose the possibility of a more ambitious multilateralism.

Meanwhile, between 2009 and 2015, three times as many discriminatory trade measures were introduced as liberalizing ones. In the first 10 months of 2015 alone, the latest Global Trade Alert database recorded 539 such initiatives adopted by governments worldwide that harmed foreign traders, investors, workers or owners of intellectual property—a record.

Efforts to control trade flows have grown increasingly sophisticated. Most governments no longer impose tariffs or other crude roadblocks that would violate World Trade Organization rules. Instead, countries ranging from the US—with the auto bailouts—to the UK, China, Brazil, Canada and several European Union members have funnelled aid to domestic industries. State procurement rules—which in China, say, forbid the purchase of strategic and defence technology from abroad—favour domestic suppliers, as do “buy local" campaigns like the ones launched since 2009 in the US, UK and Australia.

New safety and environmental standards have served as well to block foreign products. The US’ long-running resistance to Mexican trucks, based in part on safety and environmental concerns, was one egregious example. The restrictions many countries place on various food imports are another.

Financial policy has become a trade weapon. In the US, Europe, the UK and Japan, a combination of artificially low interest rates, quantitative easing and direct intervention in money and foreign-exchange markets has implicitly targeted currency levels to gain a competitive advantage.

Devaluation has reduced the purchasing power of foreign investors holding the devaluing nation’s debt.

Volatile and potentially destabilizing inflows have prompted countries as varied as Switzerland, China, Brazil, South Korea and India to restrict capital in one form or another—something the International Monetary Fund has implicitly endorsed, reversing years of economic orthodoxy. Several places, including Canada, Hong Kong, Singapore and Australia, have introduced special taxes or other restrictions on overseas property buyers.

Nations such as Spain and Portugal, with high levels of debt, have sought to channel funds domestically to support financial institutions and economic activity. The US, UK, the Eurozone countries and others have used regulations and political pressure to encourage banks and investors to adopt “patriotic" balance sheets, purchasing national government bonds or prioritizing lending to domestic borrowers. According to global rating agency Standard and Poor’s, banks have doubled their holdings of their own states’ debt since 2008.

The underlying drivers behind these trends are clear. In an environment of tepid economic growth, governments have good reason to try and maximize their share of a shrinking pie. At the same time, countries that face painful structural adjustments have been reluctant to bear the pain. Nations such as China, Germany and Japan have resisted abandoning an economic model reliant on export-driven growth, placing pressure on their trading partners.

Governments have grown frustrated with the way globalization undercuts the effectiveness of national policies: Fiscal expansion designed to support domestic demand, for instance, may be dissipated through financial leakage, boosting imports rather than promoting domestic activity. Rivals are able to undermine domestic tax policies, as Ireland’s attempts to attract companies such as Apple have shown.

All this was true before the US presidential campaign gained steam and Britons voted to leave the European Union. Now that major party leaders in the US and UK have positioned themselves as champions of the dispossessed, railing against trade and threats to national economic sovereignty, what were once surreptitious anti-globalization efforts have simply gained new legitimacy.

The process threatens to gain an unstoppable momentum. Already, the suspicion of global trade talks has spread to all trade deals: The US-led Trans-Pacific Partnership is on life support, while its trans-Atlantic counterpart appears stillborn. Policies such as negative interest rates will require progressively tighter controls to prevent capital flight.

Governments have done enough damage already. Unless they can quickly recover the cooperative spirit they demonstrated in response to the financial crisis and convince voters of their ability to ensure equitable sharing of the benefits and costs of globalization—a difficult ask at the best of times —tomorrow’s economies are certain to be even less open than today’s. BLOOMBERG

Satyajit Das is a former banker.

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