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Abstract
Collecting and synthesizing a series of essays on the political economy of trade and development policy, this book explores the following research questions: to what extent is the global trading regime reducing the ability of nation-states to pursue policies for financial stability and economic growth; and what political factors explain such changes in policy space over time, across different types of trade treaties and across nations? Gallagher presents intriguing findings on the policy constraints on the Uruguay Round, as well as the significant restrictions that the USA places upon the ability of developing nations to deploy a range of development strategies for stability and growth.
Analyzing the factors that have led to twenty-first-century trade politics being characterized by a “clash of globalizations,” this volume explores the role of economic power, institutional structure, domestic politics, currency fluctuations and ideas about globalization in effecting changes to global trade policies.
Bringing together a series of essays on the political economy of trade and development policy, this book explores the following research questions: to what extent is the global trading regime reducing the ability of nation-states to pursue policies for financial stability and economic growth; and what political factors explain such changes in policy space over time, across different types of trade treaties, and across nations? Gallagher presents intriguing findings on the policy constraints on the Uruguay Round, as well as the restrictions that the USA places upon the ability of developing nations to deploy a range of development strategies for stability and growth.
Analyzing the factors which have led to twenty-first-century trade politics being characterized by a “clash of globalizations,” including the standstill of the World Trade Organization over the issue of development strategies in emerging markets, the book sheds light upon the growing opinion among developing nations that it is in their interest to build upon their current advantage in primary commodities and light manufacturing, and to expand into new, value-added intensive areas where they might, someday, have a comparative advantage.
As this collection of essays demonstrates, developing nations now have, for the first time, the economic and political power to refuse the proposals of industrialized countries and to put forward an alternative set of negotiating demands that industrialized nations have to take seriously. This volume exposes the reality that economic power isn’t the only factor in the difference between recent talks at the Doha Round and previous discussions; however, economic power is still key among a number of converging components, which, along with institutional structure, domestic politics, currency fluctuations and ideas about globalization, are effecting changes to global trade policies.
“[This] book is particularly good at introducing complex events such as the Doha and technical instruments such as bilateral investment treaties […] it provides a highly readable and straightforward account of these issues, and the use of numerous tables helps to convincingly illustrate the unequal distribution of trade gains and the lack of standardization across multilateral trade regulations.” —Courtney Lindsay, “Caribbean Journal of International Relations & Diplomacy”
Kevin P. Gallagher is associate professor in the Department of International Relations at Boston University, where he is coordinator of the Global Development Policy Program and the Global Economic Governance Initiative.
“This is a ‘big picture’ book about the world economy, rooted in a detailed study of the institutions and norms that affect cross-border transactions, especially those of developing countries. Put it on your reading list if you are interested in the governance of the world economy, and also if you are interested in reforming the teaching of economics away from the current curriculum dominated by mathematical technique and towards topics from institutional economics, political science and sociology.” —Robert H. Wade, Professor of Political Economy, London School of Economics and Political Science
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| The Clash of Globalizations_9780857283276 | i | ||
| Title | iii | ||
| Copyright | iv | ||
| CONTENTS | vii | ||
| PREFACE AND ACKNOWLEDGMENTS | ix | ||
| LIST OF TABLES, FIGURES AND BOXES | xiii | ||
| Chapter 1 INTRODUCING THE CLASH OF GLOBALIZATIONS | 1 | ||
| Varieties of Globalization and the Trade Regime | 2 | ||
| More than Market Power at the WTO | 6 | ||
| The Paradoxical Rise of Regionalism | 10 | ||
| Note | 12 | ||
| Chapter 2 LOSING CONTROL: POLICY SPACE TO REGULATE CROSS-BORDER FINANCIAL FLOWS | 13 | ||
| Introduction | 13 | ||
| Capital Account Liberalization and Capital Controls: Theory and Evidence | 15 | ||
| Policy Space for Capital Controls at the WTO | 19 | ||
| GATS | 19 | ||
| Capital account liberalization, capital controls and GATS | 20 | ||
| Capital controls and current transactions | 24 | ||
| The Balance of Payments Committee | 25 | ||
| Capital Controls in US Trade and Investment Treaties | 26 | ||
| Investment provisions in US BITs and FTAs | 27 | ||
| Capital controls and US BITs and FTAs | 29 | ||
| “Cooling off” provisions | 29 | ||
| Illustrative discussion of capital controls and violations of US investment rules | 31 | ||
| US Investment Provisions versus Others by Major Capital Exporters | 34 | ||
| OECD Codes | 34 | ||
| BITs and FTAs for other major capital exporters | 35 | ||
| Summary and Recommendations for Policy | 37 | ||
| Chapter 3 THE NEW VULTURE CULTURE:\rSOVEREIGN DEBT RESTRUCTURING AND INTERNATIONAL INVESTMENT RULES | 41 | ||
| Should Investment Treaties Govern Sovereign Debt Restructuring? | 41 | ||
| Debt, Development and Financial Crises | 42 | ||
| From bailouts | 43 | ||
| To bail-ins? | 44 | ||
| Sovereign Debt Restructuring and International Investment Agreements | 51 | ||
| Jurisdiction | 51 | ||
| Umbrella clauses | 52 | ||
| National treatment | 53 | ||
| Expropriation | 54 | ||
| Fair and equitable treatment | 54 | ||
| Transfers | 55 | ||
| Safeguards | 55 | ||
| Annexes on sovereign debt restructuring in US IIAs | 56 | ||
| Limits of the US approach | 60 | ||
| Summary and Conclusion | 60 | ||
| Notes | 62 | ||
| Chapter 4 WHITHER THE DEVELOPMENTAL STATE? INDUSTRIAL POLICY AND DEVELOPMENT SOVEREIGNTY | 63 | ||
| Introduction | 63 | ||
| Trade theory and the long run | 64 | ||
| Getting the political economy right | 68 | ||
| Testing for Policy Space in the WTO and Beyond | 72 | ||
| Bilateral agreements in the multilateral system | 73 | ||
| Goods trade policies | 74 | ||
| Tariffs | 75 | ||
| Non-tariff barriers | 75 | ||
| Incentives for export | 76 | ||
| Safeguards | 76 | ||
| North–South models and South–South responses | 77 | ||
| Trade in services | 77 | ||
| Sensitive sectors | 78 | ||
| “Non-tariff barriers” in services: Quota equivalents for services trade | 79 | ||
| Duties and rights of establishment | 80 | ||
| Domestic regulation | 80 | ||
| Human capital development | 81 | ||
| Services commitments and South–South complacence | 82 | ||
| Investment | 82 | ||
| Performance requirements for foreign direct investment | 82 | ||
| Capital controls and transfer restrictions | 85 | ||
| Investor-state arbitration | 85 | ||
| South–South investment liberalization and protection | 86 | ||
| International intellectual property protection | 86 | ||
| Patent restriction by industry, origin or duration | 87 | ||
| Limited plant and animal protection | 88 | ||
| Information disclosure and “Bolar” provisions | 88 | ||
| Compulsory licensing | 89 | ||
| Patent exhaustion | 90 | ||
| Patent alternatives | 91 | ||
| South–South responses and the US model | 91 | ||
| Summary and Conclusions | 92 | ||
| Notes | 93 | ||
| Chapter 5 UNDERSTANDING DEVELOPING COUNTRY RESISTANCE TO THE DOHA ROUND | 97 | ||
| A WTO Round Centered on Development | 98 | ||
| Shrinking Agendas: Cancun, Stage for Another Grand Bargain? | 99 | ||
| Hong Kong and beyond: Shrinking gains and real costs | 101 | ||
| Shrinking gains | 102 | ||
| Shrinking policy space | 106 | ||
| NAMA goods trade | 107 | ||
| Shrinking tariff revenue | 107 | ||
| Declining terms of trade | 109 | ||
| Services | 111 | ||
| Subsidies and Countervailing Measures (SCM) | 112 | ||
| What Happened in Geneva, July 2008? | 113 | ||
| Notes | 114 | ||
| Chapter 6 TRADING AWAY THE LADDER? TRADE POLITICS AND ECONOMIC DEVELOPMENT IN THE AMERICAS | 117 | ||
| Trade Politics and the Development Process | 117 | ||
| Macro Impacts of FTAs in the Americas: Stability and Growth | 120 | ||
| The Microeconomic Costs of FTAs with the US:\rEndogenous Productive Capacity | 123 | ||
| The Political Economy of Trade Agreements in the Americas | 128 | ||
| Hubs and spokes: The rat race for access to the US market | 129 | ||
| Market power, political power | 130 | ||
| The “power” of ideas | 134 | ||
| Dynamic comparative advantage and the collective action problem | 137 | ||
| Summary | 139 | ||
| Note | 140 | ||
| Chapter 7 PUTTING DEVELOPMENT FIRST: TRADE POLICY FOR THE TWENTY-FIRST CENTURY | 141 | ||
| Re-embedding Liberalism | 141 | ||
| Four Challenges for the Multilateral Trade Regime | 143 | ||
| 1) Shrinking gains and rising costs of liberalization | 143 | ||
| 2) The rise of the rest | 144 | ||
| 3) Food and climate crises | 145 | ||
| 4) Instability of the global monetary system | 147 | ||
| Toward a More Responsive Multilateral Trade Regime | 147 | ||
| Institutional reform | 148 | ||
| Food | 148 | ||
| Climate | 148 | ||
| Finance | 149 | ||
| REFERENCES | 151 | ||
| INDEX | 165 |