GDAE Working Paper No. 09-01 Resources, Rules and International Political Economy
this is that MFN-based market access is only available to countries that joined the WTO,
thereby consenting TRIPS and TRIMS and GATS and the ASCM and so on.
This review of how developed countries exercised power to create an institutional
device (the single undertaking) that would secure a favourable outcome of the Uruguay
Round remains relevant for the subsequent analysis of the Doha Round that I have
discussed in this chapter. The case of IP and investment negotiations in the Doha Round
shows how unweighted voting and the consensus system give developing countries
unexpected power. The WTO's decision making procedures inflate developing countries’
power; institutions are endowing countries with influence that they would otherwise lack
in the absence of these rules. Developing countries could condition the launch of a new
round of multilateral trade negotiations, which developed countries had sought since
1996, on an agreement that would draw the line under TRIPS Plus demands, and they
could make sure that the subsequent round did not include negotiations on investment.
The key point, however, is that we see this power-enhancing effect because the
WTO already exists, and, in contrast to the early 1990s, no one is (yet - but see below)
talking about effectively replacing the WTO with a new international trade institution. In
other words, the “power play” described by Steinberg is not being replicated.43 In the
Uruguay Round, developing countries were weakened because a new organization was
created that supplanted the existing organization, which meant that the consequences of
blocking conclusion would have been to be left out in the cold, not in the new WTO and
members of an old - and now useless - GATT 1947. In the current environment,
however, the consequences of blocking conclusion of Doha Round is maintenance of the
status quo. Developing countries’ power, albeit only “blocking power,” is derived from
the fact that they are in WTO and cannot be excluded or expelled from the WTO.
This discussion speaks to Gruber’s insights that some countries might sign
agreements that they do not like because the alternative is not the status quo but
something worse than the status quo - and that more powerful countries with resources to
“go it alone” can present weaker countries with this new choice set.44 Such dynamics
help explain the conclusion of the Uruguay Round, and their absence helps explain the
persistent deadlock in the Doha Round. Developing countries have less to fear in the
current setting because developed countries are no longer exercising what Gruber refers
to as their “go it alone power.” As a result, obstinate resisters are not left facing
something worse than the status quo.
To conclude, it is worth questioning the sustainability of the scenario. Developing
countries’ newfound influence in international trade negotiations is derived from the
institutional setting, but for that very reason the power is extremely fragile. Institutions
that generate outcomes that deviate far from what might be expected from the underlying
distribution of resources are unstable.45 Developed countries closed one institution and
created another in the 1990s. Would they do that again? Legally they can: withdrawing
from GATT 1994 is as simple as withdrawing from GATT 1947 was. Yet there is little
evidence of any schemes to replace the existing international trading regime with a new
one. Perhaps the proliferation of regional agreements is a movement in that direction, a
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