Developing-country status at the WTO: the divergent strategies of Brazil, India and China

Abstract

The global power shift towards Brazil, India, China and other non-western powers has led to pressures to adjust international institutions to new economic realities. Most power shift theories assume that established powers defend their institutional privileges, while emerging powers challenge them. Conversely, in this article we reverse this assumption by shedding light on ‘privileges’ of the weak: many international institutions have established special rights for disadvantaged regime members. We ask what strategies emerging powers adopt as they come under pressure to give up these rights commonly reserved for regime members with developing country status. We present a novel conceptualization of four ideal-typical strategies that combine elements of resistance and accommodation. Empirically, we examine the strategies that Brazil, India and China (BICs) have adopted in the World Trade Organization. We find that no uniform approach exists across the BICs: while India fiercely resists giving up its status as a developing country and the flexibilities it comes with, Brazil adopts a pragmatic approach that largely accommodates established powers' demands to give up special rights reserved for developing countries. China pursues a mixed strategy of selective accommodation and resistance. These findings contribute to recent debates on global power shifts by illustrating how material incentives and status considerations shape the adaptation of international institutions as privileges for the weak are re-negotiated.

From Developing Country Leader to Flexible Negotiator: New Directions in Brazilian Trade Strategy

“…India's leadership of the G33 developing countries group and its focus on achieving new safeguards for developing states reflect this strategy (compare Narlikar, 2020). China on the other hand – while also a member of the G33 – has exhibited a more selective use of its developing country identity and pursued protectionist interests in certain issue areas (Schöfer and Weinhardt, 2022). This behaviour tends more towards the individualized protectionism strategy.…”

“…For instance, with regards to the 2015 Trade Facilitation Agreement (TFA), Brazil self-classified 95.8% of its requirements as immediately implementable (Category A). Brazil thus did not make use of flexibilities that allowed it to delay implementation and instead assumed an implementation plan similar to developed countries (Schöfer and Weinhardt, 2022, 1945). Not only does Brazil no longer lead influential developing country coalitions, but also increasingly distances itself from developed–developing country divisions in favour of a more flexible, intermediary role in trade negotiations.…”

Developing country status in the WTO: investigating self-designation and perpetuation of the “pretend” culture

“…Indeed, given that SDT provisions have the effect of applying equally across all WTO developing countries, the criticism is that such a hands-off approach concerning who falls into the pool of developing countries has encouraged a “pretend” culture (Michalopoulos, 2008, p. 118) as well as the frequent fallback on poverty narratives (Schöfer and Weinhardt, 2022, p. 1942). This “pretend” culture surfaces most prominently where vast disparities in institutional capacity and degree of integration in world markets are ignored (Michalopoulos, 2008, p. 122), and member countries like Ghana and China are spoken of in the same breath.…”

“…The threat, then, is the risk of increased inequality to the detriment of smaller developing countries since the “pretend” culture has allowed major international players to compete with more vulnerable members on equal terms (Weinhardt, 2020, p. 402). In recent years, the question of whether emerging and established powers should still be allowed to claim SDT privileges as developing countries has become the subject of heated debate (Schöfer and Weinhardt, 2022, p. 1938). Essentially, indiscriminate and unchecked self-declaration runs the risk of diluting benefits that developing members rely on and so require.…”

“…Given the heterogeneity of the developing member pool, it was reasoned that an all-in-one definition was overly simplistic, undesirable and unfeasible from a practical viewpoint in the face of pushback from the larger WTO community. Especially where what is at stake is the prospect of global trade incentives, the propensity to firmly defend one’s status as a disadvantaged regime member, or at the very least, the reluctance of key emerging powers to relinquish their developing country status (Schöfer and Weinhardt, 2022, p. 1956) whilst championing the inalienable access to SDT, is unsurprising. Further, insofar as voluntary bottom-up approaches by members such as China, Brazil, South Korea and Singapore to not avail themselves of SDT is an encouraging sentiment, it was contended that it would be myopic to forego a proactive stance that puts into action targeted reform schemes in favour of maintaining the status quo.…”