reading 26 nov Sources and forms of international organization Flashcards
. An offer developing countries could not refuse: How powerfulstates created the World Trade Organisation
intro
Igor AbdallaMedina de Souza
developing countries only accepted the WTO (which leads to absolute loss for them) as choice for the lesser of two evils: US and European Communities imposed choice between WTO and being denied access to the worlds 2 largest markets
- they actually prefered the status quo: GATT 1947
- often argument that dev. coountries ‘learned’ (more liberal preferences as Uruguay Round unfolded) BUT doesn’t explain systematic complaints regarding unbalanced nature WTO Agreement
this argument challenges neorealism:
- institutional power allows powerful countries to attain their goals indirectly, avoiding the legitimating problems that beset overt power exercises
e.g. decision to join WTO was voluntary - power differentials go beyond relative gains to impose absolute losses
concept: institutional power + sub-categories
liberal discourse on global governance masks the presence of power: focus on positive sum account + institutions enable to solve collective action problems derived from international anarchy
realists refrain considering possibility of absolute losses in institutions: states would never agree to membrship that made them worse off
Barnett and Duvall: 4 categories of power = compulsory (realism: one state compels another state to do something it does not want to do) + institutional + structural + productive
- institutional power = indirect ways in which an actor controls others: by deploying formal and informal institutions that mediate a and b as a working trhought he rules and procedrues tt define those insittutions, guides, steers and constrains the actions/nonactions and conditions of existence of others
subcategories =
- ‘go-it-alone’ power
- market power
- forum shifting power
definition regime
‘principles, norms, rules and decision-making procedures around which actor expectations converge in a given issue area’
‘go-it-alone’ power
powerful countries (A and B) can remove the status quo from the choice set of a country C -> C will become a member of the institution bc that will make them less worse off
*this also has consequences for actor D: it is more costly to resist as C joins (+ after D joins also consequences for E etc.)
-> asymmetric arrangement as the WTO Agreement may spread despite detrimental consequences to some
once once country flips i accelerates the bandwagon dynamic set forth by developed nations
developed nations -> developing nations -> large developing countries -> Least Developed Countries (LDCs)
market power
powerful state can direct its commerce towards weaker nations to create ties of dependence
- e.g. Nazi Germany: 52 and 59 % of Bulgarian imports and exports (but only 1.5% and 1.1% of German imports and exports)
-> asymmetrical opportunity costs of trade interruption -> leverage of the powerful state to guide less powerful state to act compatable with the powerful states’ interests
market size EC (european community) and US enabled them to dominate the trade regime
forum-shifting power
= moving an agenda from one organization to another, exiting an organization, and pursuing the same agenda in more than one organisation
- US used this to insert into the WTO intellectual property protection (TRIPS) + GATS (deregulation for telecommunications) = previously dealt with by other organizations
only powerful actors can use this strategy
also a forum shifting strategy = playing countries off each other by engaging in simultaneous bilateral and multilateral negotiations
(forum blocking strategy = when a state ensures than an IO does not become a forum for an agenda that threatens its interests)
Steinberg: pattern in GATT trade rounds = at late stages powerful states have much info on preferences other states -> push forward power-based bargains
the case for inquiring into the role of power in the creation of the WTO
how the WTO is asymmetrical
WTO Agreement codifies outcomes of the Uruguay Round
= agreements on goods, services and intellectual property + trade policy reviews + plurilateral agreements not signed by all WTO members
‘single undertaking’ -> all members bound by all multilateral commitments embodied in the WTO Agreement
goods: trade regime does not regulate trade in areas where developing countries have comparative advantages (e.g. agriculture) + severe restriction on developing countries’ ability to apply industrial policies
- 2003 developing countries unified position in agriculture -> collapse WTO ministerial meeting Cancun: developed countries refused to liberalise agriculture
new issues: unbalanced nature TRIPS = stronger protection in all areas of intellectual property than developed countries historically provided in stages of dev similar to those of today’s developing countries -> forces wealth transfers + creates monopolies in developing countries (increases domestic prices) + creates deadweight losses
- as net importers of intellectual property, developing states have to make greater payments for the use of intellectual property rights
DSU (dispute settlement system): system seems highly legal, but enforcement/action takes place in the shadow of law
-> material imbalances between litigants reflected in judicial outcomes (e.g. bc more expensive lawyers)
- developing countries are worse-off with the new system: bc limited legal capacity
- US and EC important in shaping WTO jurisprudence
- developing countries not able to retaliate properly
launching the Uruguay round
- from a power standpoint
shaped by events early 1980s: second oil crisis + rise of free-trade-oriented Reagan admin in the US
US used power resources to insert into the new trade regime new issues: services, investment and intellectual property
(bc perception it was losing dominant position world econ)
- deployment forum-shifting strategy: intellecutal property away from World Intellectual Property Organisation to the GATT system (there and not in UNESCO and UNCTAD bc powerful countries have historically dominated the trade regime)
agriculture split the US and EC: US was major exporter, wanted it included in GATT, EC didn’t
-> inclusion agriculture in work programme shows relsilience US position
disproportional influence of developed countries on the gATT secretariat (for 50+ years the director general was US, European or Canadian)
hardliners: 24 developing countries imposing conditions for new round in 1985 bc concerns about new issues developed countries -> developed countries co-opted key developing nations (e.g. ASEAN announced support)
still many hardliners resisted
consensus not a legal requirement,
US threatened to walk out if new issues were not included + call for a vote to isolate developing countries that resisted
endresult: braod wording -> French can accept inclusion of agriculture at the same time that enabled all parties to keep their previous positions (compromise language also to avoid getting blaim for failure in launching the round)
Uruguay Declaration launched the Uruguay Round on 20 sept 1986
closing the Uruguay Round
- from a power standpoint
Uruguay Declaration had not solved disagreements over agriculture and new issues
external events changed the environment of the round: end cold war (-> US more aggressive attitude)
US used market power to employ open eco coercion aimed at intellectual property protection
+ forum shifting strategies (US played countries off each other by engaging in bilateral trade negotiations)
US and EC feared consensus tradition could block progress in TRIPS and GATS -> joint strategy to force developing countries to agree to all Uruguay Round commitments : single-undertaking
(US called this the power play)
- Dunkel embedded this plan in the 1991 draft final act
still no US-EC agreement on agriculture -> 1991 draft final act (Dunkel draft) with significant agricultural liberalisation -> France refused (therefore blocking EC support)
1993 Clinton admin asked for extension negotiating authority + US agreement NAFTA + agreement on agriculture (higher levels of export subsidies during implementation of the Uruguay Round)
EC and US exited the GATT after joining the WTO -> removal status quo from choice set of other countries
1993 Uruguay Round finalised, entered into force in 1995 (WTO came into being)
conclusion
positive-sum view on institutions = incorrect: international institutions often presented as offers developing countries can’t refuse
WTO reflects agenda of the world’s two largest trade entities: loose rules on agriculture and textiles, selective liberalisation in manufactures and services + strong rules intellectual property
