09-01 "Resources, Rules and International Political Economy: The Politics of Development in the WTO"

GDAE Working Paper No. 09-01 Resources, Rules and International Political Economy

Abstract

This paper examines the contemporary politics of intellectual property (IP) and
investment in the World Trade Organization (WTO). I examine the underlying and
perennial conflicts that pit developing and developed countries against each other in these
two areas and the nature of the two agreements reached during the Uruguay Round, the
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the
Agreement on Trade-Related Investment Measures (TRIMS). I then analyze developed
countries’ efforts to push beyond the TRIPS and TRIMS agreements, and, critically,
developing countries’ success in forestalling these efforts. Developing countries have
“prevailed” in the current international conflicts over IP and investment not by securing
rules that they desire, but rather by preventing the imposition of arrangements that they
regard as worse than the WTO status quo.

To understand how weak countries have managed to overcome developed
countries’ IP- and investment-related campaigns and thus prevail (even in the qualified
sense) in an important international setting like the WTO, I draw on the insights from two
approaches to the study of international political economy (IPE), structuralism and
institutionalism. The structuralist approach focuses on the distribution of resources as the
key determinant for explaining international outcomes, while the institutionalist approach
focuses on the effects of rules. What we see is that, within a broad set of constraints that
is determined by the distribution of resources, the rules of the WTO drive the outcomes.
In particular, the WTO’s rules of unweighted voting and consensus decision-making have
inflated developing countries’ influence in the post-Uruguay Round setting and allowed
them to block the efforts of wealthier countries to impose new constraints on national
policy in the areas of IP and investment. In the concluding section I address a subsequent
question that logically follows from the analysis: why, if developing countries can block
developed countries’ initiatives now were they unable to do so during the Uruguay
Round?

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