Workshop: From Rule-takers to Rule-makers: Emerging Powers in the Regulation of International Trade

University of Geneva, February 9th and 10th 2016
Unimail, 40 boulevard du Pont d’Arve, Room M1130 (1st floor)
For directions see: http://www.unige.ch/presse/static/plan/mail.html

Brief description

This workshop closes two 3-year projects funded by the Swiss Network of International Studies (SNIS) and the Swiss National Science Foundation (SNF). The projects addressed the question of power shifts in the international system with a particular focus on trade regulation. While the SNF project investigated the potential decline in EU/US regulatory influence on emerging economies the SNIS project asked under which conditions emerging markets turn from rule-takers to rule-makers in international trade regulation.

The starting point is the observation that Brazil, China, India and Mexico as well as other countries have become influential players within an international trade regime whose core principles, rules and procedures have been shaped earlier and by others, notably the United States of America and the European Union. Multilateral and EU/US bilateral economic policies promote regulated liberal markets in line with the principles associated with the Post Washington Consensus (PWC) – a system of rules that involves, in addition to the opening-up of markets, also a particular type of "regulatory state". This type of governance differs from alternative paradigms that have a strong tradition in several of these emerging countries – usually summarized under the label "Developmentalism" (Wade 1992; Woo-Comings 1999). Defined as a specific form of governance that operates at arm's length from government, the regulatory state focuses on the production of rules (rather than directly producing products or services) and privileges the role of experts and technocrats over that of politicians (Levi-Faur 2011). The question of power shifts thus has profound domestic implications in emerging economies that underpin not only transition towards market economies but also towards a specific model of regulatory politics.

Whereas the shifts in economic power are by now well documented, we know relatively little about what large emerging economies seek from the global system, how their insertion into international rules affects the domestic organisation of state and society, and how these countries pursue their interests in particular in the global trade regime. While a large literature exists on conditionality and other mechanisms of diffusion that have to do with the supply of international norms associated with the PWC, we identify two lacunae in the literature. On the one hand, the extent to which the "old" hegemons, the EU and the US, have retained the capacity to wield regulatory power in their relations with emerging countries has not been systematically studied. On the other hand, little is known about the factors affecting the domestic demand for regulatory reforms in the emerging countries. This demand aspect is associated with the transition of emerging countries towards the regulatory state, and with contestation, both in terms of (economic) interests and (political/regulatory) ideas. We expect trade-offs to exist in policy fields with significant social implications (e.g. the pharmaceutical sector and access to medicines in intellectual property rights or state owned enterprises and employment in competition policy). We suggest that these trade-offs mirror more profound conflicts between the more statist approach of the Developmental state or governed markets and the regulatory state. This implies that, in addition to pressure by influential industry groups (Bach and Newman 2014), the transition also hinges upon the support from ruling political elites and on the activism of pertinent regulatory bodies and associated experts.

The project features a comparative research design examining the foreign economic policy behaviour of the EU, US, Brazil, China, India and Mexico in four contested trade-related regulatory fields: competition law, intellectual property rights, public procurement and services-related labour mobility. These regulatory fields touch so-called “behind-the-border” issues and have far reaching implications for the role of the state in economic development. Three of these fields flow directly from the regulatory agenda of the EU and the US – competition law, IPR and public procurement – partly evoking vivid resistance and alternative approaches from countries such as Brazil and India in particular, whereas the promotion of labour mobility is a priority of the emerging countries meeting the resistance of Western powers.

Bringing together some well-known scholars working on these issues as well as practitioners, the workshop seeks to widen our understanding of the role of emerging countries next to the EU and US in trade regulation and of the areas and degree to which these countries are becoming rule-makers rather than rule-takers. In doing so, the workshop looks at two main issues: i) the interactions between emerging countries and established trade hegemons and ii) the challenges faced by the regulatory transition taking place in emerging economies and how this affects whether these countries may become rule-makers. It seeks to answer questions such as:

• How do the EU and US react to the growing assertiveness of emerging countries in trade regulation and which mechanisms of influence do they try to maintain?
• Power-based conditionality and bargaining vs
• Technocratic networking, capacity-building and socialization
• Which are the relevant venues sustaining rule-making and rule diffusion nowadays in these fields and why do regulators chose these venues over others?
• Multilateralism versus plurilateralism (TPP, TTIP, ISA etc.) and bilateralism
• Formal versus informal transgovernmental venues
• Role of epistemic communities
• What explains emerging powers’ decision to embrace or challenge EU and US approaches or to become proactive in proposing new rules? What is the respective impact of, inter alia:
• Domestic economic differences in the sectors under study
• Historical legacies and political culture
• Learning processes and the development of regulatory capacity?
• How do these transition processes play out at the domestic level of the emerging powers?
• Which shifts do we observe in the organization of state-society relations within the sectors under study?
• How does the development of new regulatory institutions to deal with competition enforcement or intellectual property protection fit into the overall administrative structure in the country?
• To what extent is the transition towards "regulatory states" a precondition for both regulatory alignment and the development of a genuine international influence?

More information and full program of the Workshop SNIS SNF.