SOUTH-SOUTH COOPERATION IN THE WORLD TRADE ORGANIZATION'S DISPUTE SETTLEMENT BODY.

Author:Gray, Tricia J.
Position:Report

INTRODUCTION

Since the 1990s, the simultaneous rise of a few large Global South states and formal and informal international organizations has created the opportunity space to pursue South-South Cooperation (SSC) agenda goals for trade in a rule-based international system. (1) This article examines the SSC leadership of India and Brazil through the lens of the World Trade Organizations (WTO) Dispute Settlement Body, an adjudication process that provides an additional arena for rule-based challenges to trade disputes. This article contributes to research on the theory and practice of SSC, specifically with regard to the role of developing states in international organizations. Additionally, the research expands the empirical data on trade disputes with a data set of categorical variables derived from the WTO Dispute Settlement Gateway. (2)

An extensive literature exists on developing states in trade negotiations in the General Agreement on Tariffs and Trade (GATT; 1947-1994) and the WTO (est. 1995). However, research on the WTOs Dispute Settlement Body, which was established in 1995, is sparser and scholars contend that it is only loosely guided by theory. (3) Much of the research on the rise of Global South states tends to focus on economic growth, economic resources, and coalition building for the purpose of gaining leverage in multilateral organizations. (4) Research on the WTO focuses primarily on the process of global trade negotiations and the actors in those negotiations. (5) While Chad Bown and colleagues have explored the Dispute Settlement Body from various perspectives, research on that body is still in its infancy. (6)

This chapter analyzes activity in the Dispute Settlement Body as one window on the SSC leadership of India and Brazil. These two states demonstrate clear and active leadership for SSC in various arenas, such as the India, Brazil, and South Africa (IBSA) Dialogue Forum; Brazil, Russia, India, China, and South Africa (BRICS); and the Group of 20 Developing Countries. (7) India and Brazil evince the resilience of SSC perceptions, values, and ideas that have been translated into conceptions of distributive justice. (8) My central hypothesis is that Global South states can further SSC interests in trade relations through the Dispute Settlement Body, especially if they form coalitions in disputes. My research questions were Do Brazil and India use the Dispute Settlement Body to counter Global North interests and advocate for SSC goals in the global governance of trade relations? If they do, what factors are most important in achieving rulings in their favor?

The article begins by describing the emergence of Brazil and India as leaders for an SSC coalition and the Dispute Settlement Body process as an institutional context for testing the potential of SSC for the mutual economic development of the Global South states. The study presents comparative case profiles of SSC leadership in Dispute Settlement Body cases and uses cross-tabulation and goodness-of-fit tests to measure the correlations between the strategies and outcomes of Brazil and India and those of the United States or the European Union (EU) in the period 1995 to 2015. (9) The findings support the hypothesis that the Dispute Settlement Body is an important arena for SSC advocacy, since Global South coalitions are most likely to use it to challenge the Global North and they tend to prevail in Dispute Settlement Body rulings. Thus, mobilizing SSC through the Dispute Settlement Body is an effective strategy for Brazil and India individually and, better yet, in cooperation to counter Global North trade dominance and to gain leverage in trade regulations. This study advances research on the role of developing states in international organizations, in implementing trade regulations, and in pursuing dispute resolution strategies.

LITERATURE REVIEW OF SOUTH-SOUTH COOPERATION

The scholarship on Global South foreign policies includes debates between those who subscribe to the traditional realist view that international organizations mirror the balance of power and those who hold the institutionalist view that international organizations can reproduce and reconfigure power among states. (10) Joseph Tulchin and Ralph Espach have argued that "institutionalism offers ruletaker nations a strategy by which they can position themselves to become rulemakers." (11) Brazil and India have been key architects and leaders of the coordinated campaign of Global South states in international institutions.

The origins of the current SSC framework reach back to the golden era of third worldism during the 1960s and 1970s that grew out of liberation movements, decolonization, and non-alignment. (12) Because of the economic and political context, however, the first SSC coalitions were largely rhetorical and symbolic. Since 2000, many scholars have noted the rejuvenation and reinvention of SSC, as evidenced by the formation of the BRICS, the IBSA, and the Group of 20 Developing Countries within the context of international organizations. (13) SSC is a mobilizing framework for a diverse set of states and it presents a strategy for collective action in multilateral and regional organizations. (14)

The SSC strategy emphasizes mutual economic exchanges through mechanisms such as soft loans, South-South trade, and South-South blocs for negotiating and advocating for SSC through various international organizations (e.g., the WTO, the IMF, the UN) and clubs (e.g., the BRICS, the IBSA, the Group of 20 Developing Countries, the G77). SSC consists of partnerships based on common historical trajectories, structural positioning, and policy priorities among developing countries, especially in terms of the desire for sovereignty and equality. (15) The SSC agenda includes the objectives of nonintervention, the peaceful resolution of conflicts, mutual development, and a multipolar international system, especially through international organizations. (16) SSC promotes coordination and strategic partnerships that are sufficiently large and powerful to have an impact on global politics, promote institution building, and enhance cooperation among developing regions and within international organizations. (17) On the one hand, integration of Global South states into existing international institutions demonstrates an experience of being co-opted toward hegemonic norms. On the other hand, it illustrates that within international institutions, Global South states create coalitions that resist the influence of established powers and reform institutions and promote a more South-oriented, sovereigntist image of world order. (18)

In 2003, India, Brazil, and South Africa formed the IBSA Dialogue Forum (19) in order to pursue SSC goals, such as acquiring permanent Security Council seats, establishing preferential trade agreements, and gaining decision making powers in international organizations. (20) After the economic crash of 2008, the G20 supplanted the G7 as the new global economic steering committee. (21) The economic rise of the Global South facilitated the integration of Global South states into global governance institutions. Their leadership on SSC issues and their soft power resources have been key for setting agendas in those venues. (22) Brazil and India have overcome problems of disparities and disunity by assuming a disproportionate share of the costs of spearheading international organizations and launching complaints in the WTO in the interest of gaining global leadership. (23)

The developing states have shifted from being recipients to becoming donors in the area of development assistance and have created new vehicles for financing. (24) The Bank of the South, which Venezuelan president Hugo Chavez first suggested in 1998, was launched in 2007 as a way to break the control international financial institutions had over South American countries. On July 21, 2015, the BRICS launched the New Development Bank, which is headquartered in Shanghai, with a capitalization of US $100 billion. These funds are intended mainly for infrastructure projects in the Global South. The IBSA Facility for the Alleviation of Poverty and Hunger (IBSA Fund) has been the cornerstone of the group's trilateral development assistance. (25) More than 40 percent of the developing countries' foreign direct investment is invested in the least developing countries. (26)

Although assertions that Global South nations are displacing power in international financial organizations may be overstated, they do command enough power to block agreements, especially when they join forces to reject compromise. (27) The desire of emerging Global South powers to redistribute resources has reshaped international institutions in the fields of trade, finance, and security, (28) although there is strong variation across issue areas. (29) India and Brazil have a long history of leading coalitions that block trade agreements, first in GATT and now in the WTO. The Global South nations used their veto power for the first time during consensus decision making at Cancun in 2003, which created a deadlock at the WTO Ministerial Conference. (30) These efforts indicate that the time when the developing world is willing to accommodate the desires of the Global North is coming to an end. (31) The Dispute Settlement Body provides an institutional context in which Brazil and India can use SSC to advance economic interests, especially in relation to Global North trade partners.

THE DISPUTE SETTLEMENT BODY: AN ARENA FOR SSC

The WTO s Dispute Settlement Body provides a useful lens for examining the SSC strategy in international organizations. As the global coordinator of the rules of the game for global trade the WTO is a key multilateral arena. Its Dispute Settlement Body offers a mechanism for enforcing international trade regulations that carry more legal weight than the regulations of other international institutions...

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