Was an open and liberal international trade order a product of US hegemony after all? Kristen Hopewell’s fascinating and well-researched book on the US-China rivalry in global trade governance gives pause for thought. Her key claim is that the intensifying rivalry between the United States and China has become the “predominant dynamic” in the governance of global trade (p. 2). Moreover, this rivalry is “profoundly undermining global institutions and rule-making in trade” (p. 11).
In making her case, Hopewell seeks to refute two arguments that underpin what she calls the “prevailing view” on the rise of China (p. 2). The first is that China is still not powerful enough to fundamentally challenge US dominance of the international system. Yet Hopewell shows quite convincingly that China has already begun to severely constrain US power in global trade, with the United States increasingly unable to achieve its goals or “set the rules” (p. 8). The second argument that Hopewell puts to rest is that China can be integrated relatively smoothly into the existing multilateral trade system. Although China may not seek radically to challenge the status quo, its unique economic structure renders its rise “highly disruptive” (p. 10) to established trade rules. Moreover, because the United States can no longer induce and cajole others to follow its preferred rules, China’s rise has “created serious difficulties for the functioning of the global trade regime, eroding the efficacy of existing trade rules and institutions and preventing the construction of new and stronger rules to govern global trade” (p. 194).
The book develops its argument through five highly engaging case studies. Each one draws on Hopewell’s extensive background knowledge and the insights from numerous elite interviews at the World Trade Organization (WTO) in Geneva. Chapter 1 succinctly charts the rise and fall of the WTO’s Doha Development Agenda. Hopewell argues that the core reason for its failure was US concerns about the flexibilities and exemptions that China continues to enjoy as a developing country. Chapters 2 and 3 turn to sector-specific multilateral trade negotiations that have emerged out of the rubble of the Doha round. Chapter 2 focuses on negotiations on creating new multilateral restraints on agricultural subsidies, whereas chapter 3 examines negotiations on fishery subsidies. Chapters 4 and 5 go beyond the WTO context to examine the impact of China’s rise on multilateral rules governing the provision of export credit. In each case, Hopewell shows how China’s rise has complicated multilateral negotiations, even if it is not always clear that China has been the decisive factor.
At the heart of each case is what Hopewell refers to as the “China paradox”: the unprecedented situation that China is both the number two economy in the world and a developing country. As a developing country, China continues to demand exemptions and less than full reciprocity in its multilateral trade commitments. Many other countries, with the United States foremost among them, demand that China take on obligations that they believe are commensurate with its economic heft. In each case, Hopewell shows how multilateral negotiations have been complicated or even derailed by the China paradox. China appeals to the norm of Special and Differential Treatment for developing countries, while the United States demands greater concessions but is not powerful enough to coerce China to accept them. The result has been protracted stalemates and unprecedented tensions in the multilateral trade system.
Hopewell has a mastery of the technical details of multilateral trade negotiations. The book is filled with juicy quotes and insider sniping from her elite interviews of national delegates and secretariat staff at the WTO. It is fascinating, for example, to see how developing country delegates are loath to criticize China publicly but are ready and willing to decry its trading practices in private. Public statements are often full of platitudes and blandishments. In private everybody knows the score.
This is not a theoretical book, but its argument has clear theoretical implications. Hopewell’s finding that the United States has lost its ability to control multilateral trade negotiations could easily be interpreted as supporting some version of hegemonic stability theory. Even when China has been incorporated into existing institutions and is supportive of their aims, as at the WTO, “it is clear that changes in the distribution of power are thus having destabilizing effects” (p. 13). Yet, as Hopewell points out, these difficulties are not only a result of changes in international power relations but also derive from the nature of China’s domestic political economy (p. 17).
Less clear is the book’s message about normative conflicts and (de-)legitimation strategies in multilateral settings. The crux of the “China paradox” is that both China and the United States can present their demands as deriving from established, widely legitimate norms. China can legitimate its reluctance to take on new obligations as an expression of the norm of Special and Differential Treatment. The United States, by contrast, can avail itself of the norm of reciprocity and the widespread metaphor of a “level playing field.” Would things be any different if the normative balance were tipped in favor of one over the other? On the one hand, Hopewell’s interviews turn up a great deal of evidence that the participants are fully aware of each other’s hypocrisy. Yet at times, there appears to be some evidence of real normative pull, as when China’s behavior is explained, at least in part, as an attempt to avoid creating an undesirable normative precedent (p. 118). Whether these legitimation battles play an autonomous role and who may be winning are questions left largely unanswered.
Hopewell’s book is also largely silent on the role of regional trade agreements. Yet as deadlocks in the multilateral system proliferate, these agreements are becoming decisive for the global trade system and important battlefields in the US-China rivalry. Hopewell claims that “there is, as of yet, no sign of China replacing the U.S. as rule-maker within the multilateral trading system or assuming the dominant role in constructing global trade rules” (pp. 192–93). But a focus exclusively at the (global) multilateral level may obscure the changes that are taking place at the regional and interregional level. And here, China has been far from passive, and arguably it has been a more consistent rule maker than the United States in recent years.
There has always been something utopian about the idea of a liberal international trade order, with the economic realm neatly insulated from political interference. Hopewell’s book shows that in the multilateral trade system, the US-China rivalry has brough politics back to the fore.
