Shouting into the Wind: Examining the Structural Weakness of Developing

Countries in the Global Trading Order

Michael SmithDepartment of Political Science, Columbia University

mgs2131@columbia.eduIPES Conference, November 15, 2008

LDCs and the WTO: Newfound Voice

Seattle Ministerial, 1999: Dozens of unmet LDC demands leads to mass exodus

Doha: Well organized and coherent expression of LDC interest in negotiations

Research Question

Is this new voice indicative of a greater power in the GATT/WTO regime?

LDCs and the WTO: Newfound Power?

Democratization leads to a new interest in free trade (Milner and Kubota)

LDCs and the WTO: Newfound Power?

Democratization leads to a new interest in free trade (Milner and Kubota)

Efficiency rationale: International regimes allow states to overcome domestic barriers to free trade (neoliberal institutionalists)

LDCs and the WTO: Newfound Power?

Round DatesNumber of Member

Countries

Geneva 1947 23

Annecy 1949 33

Torquay 1950 34

Geneva 1956 22

Dillon 1961 45

Kennedy 1962-7 48

Tokyo 1973-9 99

Uruguay 1981-94 117

Doha 2001-pres. 147

LDCs and the WTO: Newfound Power?

Democratization leads to a new interest in free trade (Milner and Kubota)

Efficiency rationale: International regimes allow states to overcome domestic barriers to free trade (neoliberal institutionalists)

New coalitional bargaining strategies allow LDCs to effectively press their demands in WTO negotiations (Narlikar and Tussie)

But…

New coalitional bargaining strategies made possible by institutional changes in GATT/WTO that allow for trade-related coalitions

But…

New coalitional bargaining strategies made possible by institutional changes in GATT/WTO that allow for trade-related coalitions

If structural change in the GATT/WTO empowered the global south, why did this structural change occur in the first place?

But…

New coalitional bargaining strategies made possible by institutional changes in GATT/WTO that allow for trade-related coalitions

If structural change in the GATT/WTO empowered the global south, why did this structural change occur in the first place?

Analysis of evolving GATT/WTO regime requires a role for power

But…

New coalitional bargaining strategies made possible by institutional changes in GATT/WTO that allow for trade-related coalitions

If structural change in the GATT/WTO empowered the global south, why did this structural change occur in the first place?

Analysis of evolving GATT/WTO regime requires a role for power

Expression of voice by developing countries doesn’t correspond theoretically or empirically to increased power

Bringing Power Back In

Gruber’s ‘go-it-alone’ power: dominant powers seeking efficiency gains from international cooperation can change status quo in system through creation of self-serving agreements and compel other states to join

Bringing Power Back In

Gruber’s ‘go-it-alone’ power: dominant powers seeking efficiency gains from international cooperation can change status quo in system through creation of self-serving agreements and compel other states to join

Extended to GATT/WTO example: core coalition of dominant cooperating states can exercise structural power. A kind of ‘go-it-together’ power

Bringing Power Back In

Gruber’s ‘go-it-alone’ power: dominant powers seeking efficiency gains from international cooperation can change status quo in system through creation of self-serving agreements and compel other states to join

Extended to GATT/WTO example: core coalition of dominant cooperating states can exercise structural power. A kind of ‘go-it-together’ power

When agreement is reached between dominant powers, developing countries feel compelled to join

Expressions of Power

Structural: Draws in Outliers

Expressions of Power

Structural: Draws in Outliers

Rule Setting: Defining Institutions

Expressions of Power

Structural: Draws in Outliers

Rule Setting: Defining Institutions

Agenda Setting: Content of Votes and Declarations

Expressions of Power

Structural: Draws in Outliers

Rule Setting: Defining Institutions

Agenda Setting: Content of Votes and Declarations

Exit: But Fruitless

Hypotheses: When Agreement?

Core Coalition

?

Structural Power

Rule Setting Power

Agenda-Setting Power Agreemen

t

Yes Yes Yes Yes Yes

No No No Yes (though ineffectual)

No

Expectations

Small-n agreements driven by efficiency concerns

Expectations

Small-n agreements driven by efficiency concerns

For an agreement to grow it must be between states with large structural power

Expectations

Small-n agreements driven by efficiency concerns

For an agreement to grow it must be between states with large structural power

Where a core coalition exists, GATT/WTO rules will be changed as needed

Expectations

Small-n agreements driven by efficiency concerns

For an agreement to grow it must be between states with large structural power

Where a core coalition exists, GATT/WTO rules will be changed as needed

Agenda setting may coexist with any form of coalition but only leads to agreement when forwarded by core coalition

Evidence

GATT/WTO negotiations considered as four cases:1. Havana to the Kennedy Round2. Tokyo Round3. Uruguay Round4. Doha Development Round

Havana to Kennedy

GATT founded as UK-US-France coalition

More development-friendly ITO rejected

Substantive agreements represent northern interest: agriculture kept off the table

Tokyo Round

US/EC division over agricultural liberalization stalls progress until US concedes agricultural products as special goods

Developing world makes fails to gain desired removal of safeguards proposal despite agreement with US: EC achieves maintenance of selective safeguards

Global South largely avoids signing agreements; agitate in alternative but ineffective UNCTAD

Uruguay Round

Developing countries compelled to return to negotiations despite prior exit

US/EC dispute over agriculture stall negotiations; resolved when US threat of retaliatory tariffs compels EC to accede

New institutional framework of WTO meets blueprint of Dunkel Draft – a US and EC drafted document

Passage of round as single undertaking: for South, take it or leave it

Doha Development Round

Seattle 1999: Enduring US-EU-Japan disagreements over accelerating agricultural liberalization in addition to North/South arguments over discussing Uruguay’s implementation. Walkout.

Cancun : G-22 forms, fight for lowered agricultural subsidies and Northern market access. Maintain coherence until re-introduction of Singapore issues forces an impasse; again, walkout.

Geneva July 2008: Inclusion of China, India and Brazil in writing draft text. Breakdown over efforts by China and India to protect farmers

Conclusions and Questions

Voice does not mean power: in trade rounds, the existence of a core coalition is required for progress.

How do changes in the international economy affect this?

Does inclusion of China, India and Brazil in Green Room talks indicate a change in the core coalition?