RESEARCH AND ANALYSIS

Emerging powers, national interests and the future of multilateralism

Pedro da Motta Veiga (CINDES), Sandra Polónia Rios (CINDES)

 
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Trade multilateralism is going through a long-lasting period of crisis. The impasses of the Doha Round are the most visible manifestation, but they are no more than a symptom.The crisis of multilateralism is rooted in deep ongoing changes in the world economy and in the mechanisms of governance ruling the international economic relations.

At the roots of the crisis of multilateralism, there is a strong shift in the political and policy landscape in which trade policies and negotiations evolve. One of the main factors at the origin of such shifts has been “the emergence of the South”, a trend synthesizing two different phenomena whose output is the reduction of the capacity of developed countries to set the agenda and rules of international trade. Such phenomena are: (i) the increase in the economic and political weight of the major developing countries in the international scenario; and (ii) the ascension of the Asia-Pacific region as a dynamic pole of world capitalism.

Emerging economies are becoming more and more important in world trade and economy. Their influence – individually or in coalitions like the BRICS or BASIC – is growing and international economic policy-making must take into account their interests and visions on the global agenda. In any post-Doha Round scenario, their stances and interests will be one of the main factors shaping the future of multilateralism. Understanding what they think about the multilateral trade system and its future is vital to set up a broad and solid basis for the development of multilateralism.

The crisis of multilateralism has given rise to the formulation of a vast array of proposals aimed at recovering the functionality of trade multilateralism, to “update” it so that it can meet the new challenges. It is the case, for example, of initiatives, like the Sutherland Report, sponsored by the WTO, to discuss its future, and the Warwick Commission Report, which presents challenges and recommendations for reforming and strengthening of the multilateral trade system.

Despite their growing weight in international trade flows and negotiations, emerging countries have been quite shy in their engagement in the debates on the future of trade multilateralism and global trade governance. A realistic view would relate this shyness to the fact that emerging countries are among the major beneficiaries of the multilateral trade system as it has been in place during the last decades. Besides that, emerging countries seem concerned with the risks that the setting of new disciplines would reduce their space for implementing “development policies”.

Although these factors cannot be sufficient to explain the almost complete absence of the emerging countries from these debates, it is a fact that these countries emerged in the environment set by the multilateral trade system. Therefore, they can legitimately perceive broad and ambitious reforms of the system as initiatives carrying more risks than opportunities for their interests.

However, one can soundly argue that defensive stances in the debate on the future of trade multilateralism and governance do not match the real interests of emerging countries as they increase their economic and political weight in the international arena. Many proposals on the future of trade multilateralism are already on the table, others are being formulated and emerging countries should work hard to define their goals and priorities as far as this agenda is concerned.

The panel on Emerging powers, national interests and the future of multilateralism will bring together experts of five emerging countries from different regions of the world (Brazil, China, India, South Africa and Turkey) to address these issues, focusing on the following questions:

• Which domestic (e.g. the development agenda) and international (e.g. global challenges) factors shape the visions of the emerging countries on the future of trade multilateralism?

This issue relates to the factors that are currently conditioning the trade strategies of emerging countries, as well as the ones that these countries should consider when taking a medium-term perspective. Will the set of conditioning factors that currently prevails in the strategy of these countries still be relevant in ten years or more? Which new conditioning factors at the domestic and global level shall be integrated to the trade strategies of emerging countries?

• Is multilateralism considered relevant and applicable to their domestic development agenda, taking into account the challenges these countries will face in the next years?

With the proliferation of preferential trade agreements, emerging countries have an alternative track (to multilateralism) to follow, as far as their trade strategies are concerned. The place of the multilateral trade system tends to be redefined for these countries, although it seems that – at least for some of them – the WTO system will remain a priority. Which similarities and differences are there in position accorded to the WTO in the national trade strategies of emerging countries?

• Which kind of trade multilateralism synthesizes the preferences of these countries for the post-Doha period and how can the emerging countries constructively contribute to the improvement of multilateralism, according with their interests and preferences?

This is the central issue of the debate: which agenda, methods and goals are best suited to match the interests and preferences of the emerging countries, in a time horizon of 10/15 years? To be able to tackle this issue, it is necessary to consider the likely evolution not only of the emerging economies and of their competitive advantages, but also of the “global challenges” related to the provision of global public goods (among which the governance issue).

• Is there room for coalitions among emerging countries as a mechanism to foster the emergence of a “new multilateralism”?

Emerging countries have been acting together in some international economic fora, as the IMF, the World Bank and the G20. So far, cooperation in the trade sphere has proven to be difficult, despite some convergences observed in specific trade issues during the Doha Round. Emerging countries’ trade coalitions seem to face complex challenges and obstacles, related to: (i) structural differences among the national economies as far as comparative advantages and patterns of regional and global economic insertion are concerned; (ii) diverse policy preferences; and (iii) national priorities of foreign policy.