2. Structural shifts in global politics and their impact on the WTO system Flashcards
(22 cards)
According to Hopewell, what were the relations between Brazil, India, China and the US in the 2000s, during the multilateral Doha Round negotiations of the WTO
Brazil, India, and China formed a powerful informal alliance—the BIC—to challenge the dominance of the United States and other developed nations. This was a pivotal shift in global trade politics:
* Common cause: Their cooperation was driven by the shared goal of defending Special and Differential Treatment (SDT) for developing countries (special provisions which gives devloping countriesspecial rights and be treated more favouorably).
* North–South divide: The BIC alliance created a new power axis at the WTO, opposing the U.S. and EU’s pressure to open markets.
* Strategic strength: Their alliance allowed them to block U.S. proposals and push for substantial SDT provisions, altering the power structure of the WTO.
fragmentations in the last 5 years
Since around 2019, the BIC alliance has collapsed:
* Brazil’s defection (2019): Aligned with the U.S., Brazil renounced its claim to SDT in return for U.S. support for its OECD membership bid.
* India’s shift (2020): India broke ranks with China during fisheries subsidies negotiations by proposing SDT criteria that would exclude China. This was due to India’s economic and environmental concerns, especially over China’s dominant and subsidized fishing industry.
* China’s isolation: As a result, China has become increasingly isolated at the WTO
explenatory factors
Hopewell identifies several drivers behind these changes:
1. Diverging economic trajectories: China’s rapid growth widened the economic gap between it and its partners, undermining the basis for equal SDT treatment.
2. Strategic realignments: Brazil sought OECD membership for economic credibility amid domestic crises, shifting away from Third World solidarity. Bolsonaro changed the way Brazil do its foreign policy, how it should be seen/ do
3. Issue-specific tensions: India faced mounting pressure in fisheries talks and saw continued alignment with China as a liability.
4. U.S. pressure and tactics: The Trump administration, later sustained by Biden, escalated efforts to redefine SDT access, targeting China explicitly and pushing others to choose sides.
Emerging Markets/Economies: when did the term emerged? why? def? what do most of these regions contain?
This term began gaining traction in the early 1980s when investors started targeting developing countries that promised higher returns on investment.
The category is flexible, typically referring to countries that sit between developing and developed status.
These countries often contain both highly developed and underdeveloped regions, leading to significant internal economic diversity.
the BRIC phenomenon
Brazil, Russia, India, China:
Identified as the four major emerging economies.
The term was coined by Goldman Sachs in a 2001 report predicting these countries would drive global growth in the 21st century.
Following the hype, many investment funds were created focusing on BRICs.
Decline in Growth:
From the 2010s onward, growth in BRICs slowed.
This led to reduced investor enthusiasm, and Goldman Sachs closed its BRIC fund in 2015, signaling a fading of the initial hype.
Despite not forming a formal international organization, BRIC countries made efforts to coordinate toward institutionalisation
BRICS summits started in 2009 (with South Africa joining in 2010).
No formal charter, so BRICS lacks the legal solidity of bodies like the UN or WTO.
However, some institutionalisation occurred:
-New Development Bank (NDB) was created in 2015 as a BRICS financial institution.
-Recent additions to BRICS+ (2024–2025): Egypt, Ethiopia, Iran, UAE, and Indonesia.
-> This shows that the political implications of economic shifts are real and not just speculative trends.
eco shift in global GDP
OECD and US+EU shares decline over time, while BRICs increase their share.
Reflects a gradual shift in economic power from traditional Western economies to large emerging economies.
BRIC’s rising role in global trade
BRICs’ share in global exports and imports of goods grew significantly from 2000 to 2019.
This reflects deepening global integration of these economies.
Notably, they close the gap with US+EU in terms of trade participation.
Global trade has grown faster than global GDP in recent decades, showing:
A shift from nationally contained economies to deep international interdependence.
Global Value Chains (GVCs):
Products are now often designed, produced, and assembled across multiple countries.
Countries are simultaneously importers and exporters in the same sector.
This undermines mercantilist thinking (which prioritizes exports over imports) and stresses the importance of keeping imports flowing, not just boosting exports.
International capital flows continue to expand, not just from rich to poor countries:
In 2022, foreign investment stock equaled 44% of world GDP.
Notably, emerging economies are becoming significant outward investors, reversing previous North–South capital patterns.
vulnerability of global value chaine
Globalisation has created deep interdependence, especially through GVCs where production is spread across many countries.
However, this system has shown vulnerabilities:
2008 Global Financial Crisis: Disrupted global demand and finance.
COVID-19 pandemic: Highlighted fragility in supply chains for crucial goods like medical equipment and semiconductors.
Trump tariffs (2025): Trade protectionism resurfaces, adding political pressure to economic interdependence.
response of some countries to the vulnerabilities of the GVC
Countries are reacting to global insecurity by reducing dependency on foreign trade:
-China’s “Dual Circulation” strategy (since 2020):
.Focus on boosting domestic demand while remaining connected to global markets.
.Aims to insulate China from external shocks and political pressure.
-EU’s “De-risking” strategy (since 2023):
.Rather than full decoupling, the EU aims to reduce strategic dependencies (e.g., on China for rare earths or technology).
.Motivated by security concerns and economic resilience, especially after the Russian invasion of Ukraine.
fragmentation of the global economy?
IMF Managing Director Kristalina Georgieva (April 2023): Warned of potential “fragmentation” of the global economy.
WTO 2024: Early signs of two emerging trade blocs:
One centred around the US and allies.
One centred around China and aligned partners.
This could mark a period of “de-globalisation”:
Less economic interdependence.
More regionalism and geopolitical tension in trade relations.
Possibly less global stability overall.
uncertain futur of BRIC, what are the 2 questions that we can wonder?
Despite expansion, questions remain:
How solid is the BRICS group?
Lacks a formal charter, has very different member interests.
How powerful is China alone?
Hopewell (2022) suggests China struggles to lead coalitions in institutions like the WTO.
The “dragon” might need friends but often finds coordination difficult.
what all of this (emergence and difficulties of the BRIC in the global trade sys) implies for the “order” and IOs?
“Order” = a system of actors, ideas, rules, practices shaping governance and cooperation.
-> We’re seeing a potential reordering of this system:
-Power and control are shifting away from the traditional “West”.
-But the West remains resilient, with strong institutions, economies, and alliances.
Implications for International Organisations (IOs):
Tangible effects expected:
-IOs may struggle to maintain universal frameworks.
-Risk of parallel institutions (e.g., BRICS vs IMF/World Bank).
-Increasing importance of regional cooperation.
-Norms and values may diverge more sharply between blocs (e.g., on human rights, trade standards, tech regulation).
deadlock of the Doha Round
in WTO (2001)
-Brazil, China, and India formed a powerful emerging economies alliance:
.United to resist pressure from advanced economies to give up their “developing country” status.
.Became the core of a broader developing country coalition, amplifying their voices.
-Result:
.Shift in negotiation dynamics: advanced economies lost dominance.
.Turned into a North-South confrontation, eventually causing stalemate in negotiations.
-But internal tensions emerged:
.Brazil moved closer to the West.
.India distanced itself from China.
.The alliance lost coherence, leading to uncertain outcomes in WTO negotiations.
-Sign of evolution:
WTO Fisheries Subsidies Agreement (2022) focused on sustainability rather than development status—indicating a shift in priorities.
contestation over legislation in the WTO
Legalisation: WTO is one of the most legalised IOs, with:
Binding obligations
Precise rules
Delegated dispute resolution via its Dispute Settlement Mechanism (DSM)
- Crisis of Legalisation:
-The US was dissatisfied with the DSM, especially decisions favouring China.
-Since 2016, the US blocked appointments to the Appellate Body (which requires unanimity), leading to:
.Paralysis of the DSM since Dec 2019.
.Erosion of trust in WTO’s ability to enforce rules. - Stopgap response:
A Multi-Party Interim Appeal Arbitration Arrangement (MPIA) was launched in 2020 by 25 WTO members (incl. EU, China, Japan), to temporarily handle appeals.
EU and China have a competing reform agenda for the WTO: what is the EU’s 2018 concept paper?
More transparency
Stronger disciplines on subsidies and state-owned enterprises
Rules on services and investment
Address forced technology transfer
End “developing country” status for wealthier emerging economies
Appoint Appellate Body members
EU and China ave a competing reform agenda for the WTO: what is China’s 2019 reform proposal
Resume Appellate Body appointments
Address unilateral US measures
Focus on agricultural trade and subsidies in the Global North
Preserve developing country privileges
Push rules on e-commerce
Reflects a very different vision of fairness and global governance.
The Rise of Regionalism and FTAs
EU shift from multilateralism to regionalism:
After Doha Round stalled, major economies moved to bilateral and regional Free Trade Agreements (FTAs):
-EU shifted in 2006 (Global Europe strategy) to pursue FTAs.
-Examples:
EU-Korea, EU-Japan
CETA (EU-Canada): includes regulatory cooperation
TTIP (EU–US): failed
TPP → CPTPP (after US withdrawal)
RCEP (2020): Asia-Pacific mega-FTA led by ASEAN + 3 + Australia/NZ
def FTA
FTAs are not just about tariffs anymore—they cover:
Labour and environmental standards
Investment protections
Intellectual property
Regulatory harmonisation
E.g. CETA includes cooperation on product safety and standards
strategic implications of the rise of regionalism for the WTO
-WTO’s centrality is weakening in global trade governance.
-There is a risk of a fragmented trade order:
.Competing legal standards
.Forum-shopping
.Breakdown of dispute resolution at the global level
-At the same time, developing countries are also using regime shifting to promote their own agendas in more favourable venues (see Gutner, ch.10).
