global swing states and the trade order

7/30/2019 Global Swing States and the Trade Order

1/13

Global SwinG StateS workinG PaPer 2012

Global SwinG StateS and the trade order

Jennifer hillman
http://www.cnas.org/http://www.gmfus.org/


2/13

2012 Te German Marshall Fund o the United States. All rights reserved.

No part o this publication may be reproduced or transmitted in any orm or by any means without permission in writing

rom the German Marshall Fund o the United States (GMF). Please direct inquiries to:

Te German Marshall Fund o the United States

1744 R Street, NW

Washington, DC 20009

1 202 683 2650

F 1 202 265 1662

E [email protected]

Tis publication can be downloaded or ree at www.gmus.org/publications.

G Sg Ss Pjc

Tis working paper is part o an ongoing project undertaken by the German Marshall Fund o the United States (GMF)

and the Center or a New American Security (CNAS). Te project, co-led by Daniel M. Kliman and Richard Fontaine,

examines how the United States and its European allies can partner more closely with Brazil, India, Indonesia, and urkey to

strengthen international order. Te views expressed here are those o the author and do not necessarily represent the views

o the project leaders or their respective institutions.

au Gmf

Te German Marshall Fund o the United States (GMF) strengthens transatlantic cooperation on regional, national, and

global challenges and opportunities in the spirit o the Marshall Plan. GMF does this by supporting individuals and institu-

tions working in the transatlantic sphere, by convening leaders and members o the policy and business communities,

by contributing research and analysis on transatlantic topics, and by providing exchange opportunities to oster renewed

commitment to the transatlantic relationship. In addition, GMF supports a number o initiatives to strengthen democra-

cies. Founded in 1972 as a non-partisan, non-prot organization through a gi rom Germany as a permanent memorial to

Marshall Plan assistance, GMF maintains a strong presence on both sides o the Atlantic. In addition to its headquarters in

Washington, DC, GMF has seven oces in Europe: Berlin, Paris, Brussels, Belgrade, Ankara, Bucharest, and Warsaw. GMF

also has smaller representations in Bratislava, urin, and Stockholm.

Gmfs as Pg

Te German Marshall Funds Asia Program addresses the economic, oreign policy, and security implications o Asias rise

or the United States and Europe through research, publications, commentary, conerences, ellowships, study tours, and

collaborations with other GMF programs. Te Programs initiatives include the Stockholm China Forum, India rilateralForum, the Global Swing States Project, the Young Strategists Forum, rilateral Forum okyo, ransatlantic Workshop on

Pakistan, and high-level conversations at GMFs major conerences. Te program also publishes independent analysis by

more than 15 in-house experts on Asia and externally commissioned papers looking at American and European approaches

to the Asia-Pacic and on deepening cooperation between democratic Asia and the West.

au C n ac Scuy

Te mission o the Center or a New American Security(CNAS) is to develop strong, pragmatic and principled national

security and deense policies. Building on the expertise and experience o its staf and advisors, CNAS engages policy-

makers, experts and the public with innovative, act-based research, ideas and analysis to shape and elevate the national

security debate. A key part o our mission is to inorm and prepare the national security leaders o today and tomorrow.

Cover photo: traveler1116
http://www.gmfus.org/publicationshttp://www.gmfus.org/http://www.cnas.org/http://www.cnas.org/http://www.gmfus.org/http://www.gmfus.org/publications


3/13

Global Swing States and the Trade Order

Global Swing States Working Paper

November 2012

Jf H

Jf H cuy c f G M Fu f U S, f Iu f I Ecc L G Uy L Sc, cy f f Cy Ly K. S c uc c, y y,cu f W T Oz A By, c U S I- T C, cu Offc f U S T R, c f U.S. S Ty Sf (NC).


4/13

Global Swing States and the Trade Order 1

The collective actio

of the swing states

have deepened the

polarization within

the WTO, pitting the

developed countrie

against an increasimonolithic bloc of

developing countrie

F 5 y, y u

U S Eu c

, c f y f y

cu uy y

f G A Tff

T (GATT) ucc, W T

Oz (WTO). H, fu

c D D Ru

f c, - c

ju f u

u uy- f u.

A f u f

y f Bz,

I, I, Tuy

cc . Ec uy y

y

WTO, Bz I fu

cuy y. Y collective c

f z

WTO, cu

cy c c f

cu. My u fu

c ccu D DRu u f

c

u cc u

c y c

uc cu c

cc c.

The WTO: Hub of the International Trade Order

I f ,

c- f , cuu

uc, c, cu y

y fcu WTO y zf u f

.

T WTO f u f GATT,

947 u- c

f c f . T

GATT fu c uf u c

947 995, uy

ff u f u-

f ju 4 c. Tu

y f ff , cy,

c u cy c

f c (x -

f-

) ccy GATT

u f u y

cy

u f 93-yc uu c f f

cuy.

A cc c cx,

GATT cz

f z cu

c u f

cc u f GATT, c

f u ucu,

u c u . A

u, 995, GATT

WTO x y juff cu cuu

uc, c, cu y, y

yy u, -

u, u u y.

Ty, WTO 57 cu ,

Ru c cc, cu

j .

Strong Keeper of the Rules But Weak Forum

for New Agreements

T WTO c y

8 y c c, cuy y c ff

fc f u

c . H,

u u fuu cy

cc

c fqucy u fu f WTO


5/13

The German Marshall Fund of the United States2

The WTOs dispute

settlement system

has been particularly

successful.

c DD Ru, c

y ccu. T c

, Dc , c

u y f uc u

fuu f D Ru. Eff

fcu y f c f

D cu c.

H, y cu

f D c

cu u f (

) f

cu. I , xcy c c f

D y f . S

c c y

u f , cu

c fc

u c. H,

c y f cuc u,

c f

c f y f c

u, c .

Tu, f WTO f f fu f , z

, f ff

uy . H, f WTO

y f u f

c f f f

c, f ff

qu u.

T WTO u y

cuy uccfu, cy f

u cxy f u

u f u. U f WTO

u y y y,

cuy c y

u. Sc ,

5 u .

F cc f u, ://..//_/u_/u_u_..

M, I Cu f Juc ju 48 c

, I Tu f L

f S, c c xc xy

y f WTO y,

9 c. Pc WTO u

y ,

f 63 cu c u,

c , y

cu c -y

c c.

By juc f u,

WTO cu y

u cy y

u cuu c f

ff fc, ff , c

c, y u, .

Tu T Pcy R Mc,

WTO y

uy , , qu,

cc u c

cc f cu. T

c y cy

y u f c fu c cu

f y c fu- u.

M, WTO cu c

u , f

-cz

c . A ,

, u c,

f ccy f.

Tuu c fc c, WTO

y cc c

y. T cc u ff cu x c,

y u,

u c c

y O f

Ecc C- D
http://www.wto.org/english/tratop_e/dispu_e/dispu_status_e.htmhttp://www.wto.org/english/tratop_e/dispu_e/dispu_status_e.htmhttp://www.wto.org/english/tratop_e/dispu_e/dispu_status_e.htmhttp://www.wto.org/english/tratop_e/dispu_e/dispu_status_e.htm


6/13


The WTO is under t

by the perception,

particularly in the

developing world, t

the rules of the sys

are tilted in favor o

developed countrieand large multinati

corporations.

y fu. T WTO u f fc u fc

c uuy cc c

cy f x.

D , u

f WTO u

u y . T f,

y f ,

f c

. I f 45 y f GATT, 4

f,

y. By c, 5 y

f WTO 333 fc f uc

, y. A f Oc

5, 9, 456

f, 66 f c cuy fc. T

c Ac f Su A

N (ASEAN)-C F T A uc

Juy , . T f

y u (.9 )

- y cc u

Eu U (EU) NAFTA

c c uc (GDP) f $6

. T , y, c ucqu

c uc

cu u

WTO. I ,

uqu u y f c

c cxy c c.

T f f

f c f f

WTO fu f z.

Fu, WTO u y

c, cuy ,

u f y f

f cu u

c. My cu

f cc

cuy f cuu

ufcu uc f y

cc qu.

A u f cu

cxy f u fc WTO ,

WTO y

ffcuy c cu

. I c y y ffcu

-cuy u

c uuy

c. Suc u cu:

f y -

f y WTO y,

ffcuy fc cu y

(cuy f c c

cu f

cc f

cy ),

c u y y

cu f cc

uu c c

u u f u

c,

f cu

x c u

uc ,

f cu

y (uc cfc

f ff, f cu

ffc, fuu fc u,

u cy y f

).

The Role of the Global Swing States in the

Trading System

T fu Bz, I,

I, Tuy y,

cu y,

y. Bz I GATT


7/13


Brazil is increasingly

ooked to for leadership

in ongoing efforts to

conclude the Doha

Round.

. Bz, I, I f WTO f c

Juy , 995, Tuy cc WTO

. Ec f cu

xc cc

c

- cc f c

-c

Qu Cu ( U S, EU, C,

J) u. I c

y D Ru

uy Qu cuy u

c. Af uc u , u f F

I P, c U S

EU , u Bz, I, Au

(u f c f

cuu f) c J C

cc. T j

f fu . S y

c c c

, u

y cu

f c cu.

Brazil

Sc WTO c 995, Bz

y c , cuy

uu c cuc

z. Bz cy f

ff ccu D

Ru. Bz f f

cu j 4 c uc

x u f D c. W

c 7, Bz

f fu ( U S, EU, I)

P y D .

Sy, Juy Dc f 8, Bz

f fu f cu cu

cu y c f f

D Ru.

Bz y u u . F x, Bz fu

f uy

cuu , c

f u f cu, c

Gu f Ty (G), u u

c cuu

y U S

EU. Ry, u Bz

cuu y ff,

cu uc I

A y f .

My f Bz-G c U S EU

f c f 3 D Ru f

Ccu. U.S. T R R

Zc f c f

c Bz f ,

ccu Bz jc ff

U S, fu f x

y c f ,

f WTO fu f c

f .3

A c u f WTO u y, Bz u c 5

u 4 u u

cc. Bz ff c

cuu u xc

WTO--u c u uccfu

c U.S. u f c. T WTO

u Bz, y

c y C Bz u f

T G u cfu u f f fc f f fc c 8. T Bz- Gcu A, B, Bz, C, C, Cu, Ecu

Ey, Gu, I, I, Mxc, N, P,Puy, Pu, P, Su Afc, Tz, T,Uuuy, Vzu, Z. I c y WTO c f cu f uf f cuu cu fxy f cu. S ://.//_/_/_u_.#6.3 R Zc, Ac W N W f W DCu, Financial Times, S , 3.
http://%20http/wto.org/english/tratop_e/dda_e/negotiating_groups_e.htm%23grp016http://%20http/wto.org/english/tratop_e/dda_e/negotiating_groups_e.htm%23grp016http://%20http/wto.org/english/tratop_e/dda_e/negotiating_groups_e.htm%23grp016http://%20http/wto.org/english/tratop_e/dda_e/negotiating_groups_e.htm%23grp016


8/13


small commercial aircraft manufacturer,Embraer, that resulted in Brazil being

forced to significantly alter its export

support program.

Unlike many other members of the

WTO, Brazil has engaged in fairly

limited trade arrangements outside

of the WTO the major exception

being its membership in the customs

union MERCOSUR. Brazil is also

a member of the Latin American

Integration Initiative, an association

established in 1980 with the goal of

creating a Latin American common

market. The initiative gives Brazil

some enhanced associations with the

rest of South America and Mexico but

has not resulted in changes in tariff

policies. Because of significant limits on the scope

and coverage of MERCOSUR, it is fair to say that

Brazils trade policies remain primarily influenced

by its membership in the WTO.

In the years leading up to the establishment of

the WTO, Brazil did much to lower its barriers

to trade, in particular its tariffs on imports, with

average duties of 57.5 percent in the 1980s being

brought down to an applied rate of 13.7 percent

on average. However, Brazil never agreed to legally

bind its tariffs to those applied rates, leaving itself

considerable room often referred to as tariff

water to raise rates in the future without

violating its WTO commitments. Recently, Brazil

did just that, announcing an increase in import

duties to 25 percent on 100 products. According

to Brazil, this was done to compensate for price

differences on products caused by continued

doldrums in top economies around the world, but

the action was seen by many others as a move to

return to the days of greater protection and support

for its domestic industries.4 When coupled with

recently announced Brazilian packages of incentives

and subsidies to develop its off-shore oil reserves,

it is clear that Brazil will not be shy in fending off

foreigners and boosting domestic manufacturing.

India

Like Brazil, India has been an active and

increasingly important member of the WTO.

Because of its concern that lowering its tariffs

would invite even more imports from China,

India has joined Brazil and others in working to

lessen the tariff cuts that would be expected of

developing countries in the Doha Round. India

was also one of the four countries invited to the

July 2007 meeting in Potsdam tasked with putting

the Doha negotiations back on track. Similarly,

India was included in all of the key meetings in

2008 from the acrimonious breakdown in July

to the December sessions trying to restart the talks.

Indeed, India was cited by many as the one country

of the seven members of the inner-most circle (the

United States, the EU, Brazil, India, Australia, and,

4 Luciana Otoni, Brazil to boost import taxes again to helplocal industry, Reuters, September 4, 2012.

BRAZIL

Totalexportsofgoodsandservices:$232.2billion

Totalimportsofgoodsandservices:$250.9billion

TradetoGDPratio(2008-2010):23.8%

TradeBalance:$47.32billion

Rankinworldtrade: Exports Imports

Goods #22 #20

Services #31 #17

Primarilyexportsto:EuropeanUnion(21.8%oftotal),China

(15.6%),UnitedStates(9.7%),Argentina(9.3%)

Primaryexports:transportequipment,ironore,soybeans,

footwear,coffee

Primarilyimportsfrom:EuropeanUnion(21.2%oftotal),UnitedStates(15.1%),China(14.2%),Argentina(8.0%)

Primaryimports:machinery,electricalandtransport

equipment,chemicalproducts,autoparts

Source: WTO, Trade Profile: Brazil, http://www.stat.wto.org/countryprofile
http://www.stat.wto.org/countryprofilehttp://www.stat.wto.org/countryprofile


9/13


f f , C) jc WTO

Dc-G c fu

f f cf y f f .5

I c f

uc f Gu f

77 u f cu ff Wc u c cc

c u -u

c f c f

f f . U

99, I cy y c,

ff c. Au

u cc f ccu

99, I c f WTO,

f WTO

cy . A u, I qu

cc f uc f D Ru f

uy

u f f f

cu. M Bz C, I

5 Pu Bu,Misadventures of the Most Favored Nations:Clashing Egos, Inflated Ambitions, and the Great Shambles of theWorld Trade System (N Y: PucAff B, 9), 65.

ff cyf - cu

c u

cy f

ff c f c

cc y.

D c u WTO,

I cy

u y,

f c

cc f U S,

EU ujc

f c c. W

u y u

I cucy uffc

f y y

, I

c y c

c qu f u c

c y U S EU.

Ou WTO, I c cy

. I fu f

A Pcfc T A, f ff

(C, B, I,

Ruc f K, L P Dcc

Ruc, S L, M cuy

cc ). I 9, I

-y f

MERCOSUR, ,

c

f ASEAN. I , I J

C Ecc P

A, cc

f c , c,

.

Indonesia

Sc c f WTO Juy

, 995, I j u f u

INDIA




TradeBalance:$51.79billion


Goods #20 #13

Services #7 #7

Primarilyexportsto:EuropeanUnion(18.8%oftotal),United

ArabEmirates(12.4%),UnitedStates(10.7%),China(7.9%)

Primaryexports:textiles,gemsandjewelry,engineering

goods,chemicals,leather

Primarilyimportsfrom:EuropeanUnion(12.1%oftotal),China

(11.8%),UnitedArabEmirates(8.8%),Switzerland(6.3%)

Primaryimports:crudeoil,machinery,gems,fertilizer,

chemicals

Source: WTO, Trade Profile: India, http://www.stat.wto.org/countryprofile
http://www.stat.wto.org/countryprofilehttp://www.stat.wto.org/countryprofile


10/13


c, cuy c, ff,

f f ff

uc y

cu. I j

P, Jc, I

c uc xc

ff cu f f

cu , u

c f c, j C,

I, u x

c f c I

f cuy. I , I c

y f WTO,

y u f

cu cy

c c

cu. I y

u c

WTO, f c ju fu

c u .

I c

y f , Su. I j Gu f 77 cc

y u f

u f c

cy u ff, qu,

c f

I cy y.

L , I z

cy u 99, y

y uc ff

f ff y

.6 I, u 8 fc

c, I f f

6 N I u ff 35.6 c u ff 6.7 c. S Pc M, W T: W T Mufcu Bff B (G M Fu f U S,Ju 8), ://.fu./c/GMF_MBf_NAMA_F.f.

u u

u f f

qu y c c y

u f cu c. Sy,

fc f u

, I f y

f x f fuff, cuyc. M cy, I c c

x f 4 y cu c,

c, , f

WTO c c y J

.

Ou WTO ucu, I

fcu ASEAN F T

A, c I Bu, My,

P, S, T, C,

Bu, V, L. T f

c c fc ASEAN c

ASEAN c

u f ff ff

ASEAN . Sc

c f ASEAN F T A, I

INDONESIA




TradeBalance:+$5.642billion


Goods #28 #29

Services #40 #33

Primarilyexportsto:Japan(16.3%oftotal),EuropeanUnion

(10.9%),China(9.9%),UnitedStates(9.1%)

Primaryexports:oil,gas,plywood,textiles,rubber

Primarilyimportsfrom:China(15.1%oftotal),Singapore

(14.9%),Japan(12.5%),EuropeanUnion(7.3%),UnitedStates(6.9%)

Primaryimports:machineryandequipment,chemicals,fuels,

foodstuffs

Source: WTO, Trade Profile: Indonesia, http://www.stat.wto.org/country profile
http://www.gmfus.org/doc/GMF_MesserlinBrief_NAMA_Final.pdfhttp://www.gmfus.org/doc/GMF_MesserlinBrief_NAMA_Final.pdfhttp://www.stat.wto.org/country%20profilehttp://www.stat.wto.org/country%20profilehttp://www.gmfus.org/doc/GMF_MesserlinBrief_NAMA_Final.pdfhttp://www.gmfus.org/doc/GMF_MesserlinBrief_NAMA_Final.pdf


11/13


ASEAN f C (7), J (8), Au (),

N Z (), I (), Su

K (). I Juy 8, I

f cc

J, I x

. I ff

cu,

ff 9 c f

J I y 6.

Turkey

By , c

u f cuy c, Tuy

y WTO. T

xc f f

x f qu x c

uc y -y -u c f

y Uuuy Ru . I, Tuy

f f x-x cu

cz -u qucy

qu x c uc

u c c C,

qu C x (uc

I) c c U.S. Eu

f Tu x x, cu u f f qu

. Tuy u c f

cu fu ucc qu

f f x qu.

Tuy

u y WTO,

y c -u u

Tu x f x. Tuy

ujc f y f f c

y , f c fcu u

Tu ff c x c

ufcu f c f

.

T f c

y Eu, A, N Afc,

Tuy u f

u f WTO. I cu u

EU, ffc c 996, c

cc

cu Tuy f EU

, y

u . Sc 99,

Tuy c f

Eu F

T Ac ff

-ff

u uu ,

cu , cc

u, uc cu,

, cu y ,

x, y, f, u,

fu u, u f .

Tuy cuy

f Mcc

(c 6), Ey (c 7), Sy

(c 7), G (c 8),

J (c ). Tuy

fu f Ecc

C Oz,

I P. T z

TURKEY




TradeBalance:-$47.59billion


Goods #33 #21

Services #28 #38

Primarilyexportsto:EuropeanUnion(47.1%oftotal),Iraq

(5.3%),Russia(4.1%),UnitedStates(3.3%)

Primaryexports:textilesandclothing,ironandsteelproducts,

chemicals,pharmaceuticalsPrimarilyimportsfrom:EuropeanUnion(39%oftotal),Russia

(11.6%),China(9.3%),UnitedStates(6.6%)

Primaryimports:machinery,chemicals,semi-finishedgoods,

fuels,transportequipment

Source: WTO, Trade Profile: Turkey, http://www.stat.wto.org/country profile
http://www.stat.wto.org/country%20profilehttp://www.stat.wto.org/country%20profile


12/13


It is more importan

than ever that the

United States not

allow these four sw

states to drift away

from the WTO and

multilateral systeminto purely regional

arrangements.

c cu Af, Azj,Kz, Kyyz, Tj, Tu,

Uz P Sc A

f f Tuy, C

A , Su A c

cu cc u.

Conclusion

G cu cc c,

U S

fu f y f WTO

u y uy

. T f z yBz, I, I, Tuy

c cy ffccy

f WTO c

u f . If WTO

cy cx u

fc, y, c , cu

f c,

fc , WTO.

I f WTO cc ju

cy fu f

f y z c

u c WTO

y. T cu y uz7

7 S, f x, Rc E. B, MuzR: S B Bu Bc P G F T, The World Economy, 9 (6).

u z c (

) y u

uc f WTO. I cu

u ff c u

WTO u y c

juc f u u

.

Fy,

f

y C x.

If uc c fu, uc

cc cu c c

u , cu D

Ru. I , WTO c ff

f u

cfc y

u fu f

cx x u f

f f , ,

, .


13/13

Off i c e s

Washington Berlin Paris BrusselsBelgrade Ankara Bucharest Warsaw

www.gmu.org

1301 Pennsylvania Avenue, NW, Suite 403

Washington, DC 20004

www.na.org
http://www.cnas.org/http://www.cnas.org/

global swing states and the trade order

Documents