ASTK18300U The Politics of International Trade in the 21st Century

Volume 2019/2020
Education

Bachelor student (2012 programme curriculum): 10 ECTS

Bachelor student (2017 programme curriculum): 7.5 ECTS

Master student: 7.5 ECTS

 

 

Content

Course description

The 21st century world economy is dominated by technological revolutions, global value chains, trade wars and intense regulatory competition between trade powers. Firms’ demands rules and institutions fit for a more globalized economy. The politics of trade in the 21st century have also changed. Sovereignty concerns, security concerns and anti-globalist sentiments have fueled stronger demands for ‘fairer’ and less ‘free’ trade. Both the economics and the politics of international trade are in transformation.

 

The course asks whether we are witnessing a disorderly replacement of the post-war trading order as we know it. If so, in what direction is the world economy and the trading system and the world economy heading, and what are the implications, for Denmark, for Europe, for ‘the Liberal Order’, for ‘the rising powers’ and for developing countries?

 

The politics of international trade have erupted. Unfair trade accusations have grown powerful. Competitiveness concerns are voiced frequently. Trade wars, Brexit, and neo-mercantilist policies, such as subsidies, point to a potential disruption of globalization. Yet, this is counter-balanced by an unprecedented wave of negotiations on comprehensive trade agreements. Even Brexit ultimately hinges on such a trade agreement. If completed, these new agreements will reshape global trade. Globalization will not stop per se; it will slow down, reshaped by mix of geo-economics and geo-politics, interstate diplomacy and corporate decision-making, technological revolutions and power rivalries.

 

The course aims to discuss on which (and ultimately whose) premises international trade is regulated, and how to proceed forward on trade in the future.  The course introduces the basic rules of how international trade is regulated today, the main mechanisms and key issues in global trade. It offers an advanced introduction to international political economy (IPE) theories on trade. There is no consensus within IPE on trade. Liberal IPE wants to minimize political and regulatory interference in the market, leaving re-distributional aspects of trade aside. Realists understand trade as an effective power instrument, both as foreign economic policy tool and as strategic industrial strategy. Free trade critics see trade as a threat to sovereignty, global justice and equality, sustainable development and democracy. Underpinning these three core potions on trade, the course outlines four sets of approaches to the study of contemporary trade politics: 1) the conventional interests-orientated, liberal IPE approach on trade relations as an outcome of negotiations, regulation and enforcement in the international trading system, 2) a power-orientated, state-centered realist IPE approach on trade politics, 3) the critical approaches on trade relations as the product of hidden, transnational neoliberal hegemony, and 4) the constructivist approach, focusing on the social, epistemic construction of what (we think) trade is, and what policies to pursue. The various approaches are linked to particular issues and cases. For instance, the liberal approach is applied to the case of the new trade agreements of the 21st century, and to case of reforming the WTO. A realist approach examines the issue of trade wars, and new strategic trade policies pursued by state.  The critical approach is applied to the case of trade and development issue, and to social and environmental sustainability requirements in the new trade arrangements.

 

The course is empirically orientated but ultimately aim to facilitate theoretical-informed analysis of ongoing policy changes, ranging from the bilateral turn towards deep, comprehensive free trade agreements, the WTO crisis and possible reform, trade wars and other unilateral trade policy practices, and ask whether these tendencies are supplanting, disintegrating or reproducing the existing trade order. It will also introduce the basic setup of different national trade policies and policy processes, such as the US and RU, the legal institutional characteristics of the WTO, and the new economic theories on global trade, investment and production.

 

Course Structure

Introduction:

The trade crisis

  • Trade wars, rising China and liberal order
  • Empirics: trends and transformations
  • Discussion: ‘Slowbalisation’, Dani Rodrik

 

Theories I:

Mainstream IPE theories: liberalism and realism

  • Liberalism: liberal trade theory, liberal IPE: interdependence, institutionalism and embedded liberalism
  • Realisms: mercantilism, IR neorealism, realist IPE: state-centred realism, geo-economics, strategic trade theory

 

Theories II:

Alternative IPE theory

  • Critical IPE: marxism and neogramcianism, gender, green IPE
  • Constructivist IPE: uncertainty, discourses and practices

 

Rules:

Core principles of GATT/WTO law

  • The preamble and social purpose: Balancing sovereignty and trade liberalisation
  • The liberal core-principles: Non-discrimination
  • Rules safeguarding sovereignty: Exceptions to non-discrimination

 

Procedures of the WTO: Multilateral governance of trade regulation

  • Decision-making
  • Transparency
  • Enforcement

 

Discussion: The future of the WTO

 

Actors I:

States

  • The rule-makers: US, EU and China
  • The rule-takers: the developing world, the small and medium-sized states

 

Actors II:

Non-state actors

  • Firms
  • International Organisations
  • Experts and networks
  • Consumers

 

Problems I:

Trade wars

  • Visible trade wars: the return of tariffs
  • Invisible trade wars: technology, regulatory and financial power clashes 

 

Problems II:

Policy reorientations

  • the erosion of the WTO order, the turn to bilateralism and regionalism

 

Problems III:

Technology and the new economy

  • Strategic trade policy: upgrading to the digital economy, the biotech revolution, and an era of robotics 
  • Finance and trade: attracting investments, obtaining credits
  • Intellectual property rights: illiberal necessity of liberalism or a development trap? 

 

Problems IV:

Unfair trade, unjust trade

  • Value-based trade concerns.
  • Mercantilist populism or legitimate protection?

 

Problems V:

Securitizing trade

  • economic foreign policy: sanctions and geopolitics
  • Competitiveness: assuring fair competition
  • Harnessing globalisation: value-based trade policy
  • Climate-related trade policy: unilateralism as necessity

 

Conclusions and Q&A session:

The IPE debates on Trade

  • The IPE field: Economics or international relations?
  • IR: absolute and relative gains, freeriding, strategy choice
  • Trade power: hard or hidden, relative or structural
  • Problem-solving and Critical IPE: Liberal order or global hegemony
  • The constructivist challenge: protectionism or patriotism, preferences vs. scripts and frames, expert power
Learning Outcome

Knowledge:

  • Demonstrate knowledge of theories and concepts of trade policy analysis.
  • Understand core institutions and diplomatic processes involved in contemporary trade policy making and practices, in relation to specific cases, including comparative political economies of trade policy processes in the US, EU, and China, and international trade law, primarily WTO law. 

 

Skills:

  • Critically reflect upon key contemporary issues and developments in contemporary trade policy in the light of relevant historical, theoretical and methodological considerations.
  • Translate knowledge about theories and concepts of trade policy into concrete empirical analysis and identify opportunities and challenges for future trade policy.

 

Competences:

  • Demonstrate informed, convincing and precise knowledge of trade policy and politics, including relevant literature review, theoretical debates and empirical analysis. 
  • Make informed, analytical evaluations of different approaches to the study of foreign policy and their applicability to historical and contemporary cases, including negotiation analysis, and interplay between economic and legal factors,

Reading list (illustrative)

 

Broom, Andre (2014): “Chapter 2 - Theoretical Perspectives in IPE”, Chapter 3 – Contemporary Debates in IPE”, “Chapter 10 – Global Trade”, ann Issues and Actors in Global Political Economy,  Palgrave-Macmillian, pp. 16-42, 139-1   

 

Baldwin, Richard (2011): “21st Century Regionalism: Filling the gap between 21st century trade and 20th century trade rules”, World Trade Organization Staff Working Paper ERSD- 2011

 

Caplin, Ann & Silke Trommer (2017): “The Evolution of the Global Trade regime” in, pp. 111-140 in John Ravenhill (ed.) Global Political Economy, 5th edition, 2017

 

Damro, Chad (2012): Market power Europe, Journal of European Public Policy, 19:5, 682-699, link: http:/​/​dx.doi.org/​10.1080/​13501763.2011.646779

Drezner, Daniel W. (2013):  “The Tragedy of the Global Institutional Commons”, in Martha Finnemore and Judith Goldstein (eds.) Back to Basics: State Power in a Contemporary World, pp. 1-36, 

 

Looney, Robert E. (ed.) (2018): Handbook of International Trade Agreements - Country, regional and global approaches, selected chapters, Routledge

 

Nadvi, Khalid (2014) “Rising Powers” and Labour and Environmental Standards, Oxford Development Studies, 42:2, 137-150, DOI: 10.1080/​13600818.2014.909400

 

Meunier, Sophie and Kalypso Nicolaidis (2017): The EU as a trade power, in Christopher Hill and Michael Smith (eds.) International Relations and the European Union, 3nd edition, Oxford University Press, pp. 275-298 

 

O’Niell, Kate (2017): Global Environmental governance and the Market, in The Environment and International Relations, 2nd edition, Cambridge University Press, pp. 139-169

 

Ravenhill, John (2014): ‘Regional trade agreements’, in J. Ravenhill (ed.) Global Political

Economy, 4th edition, 2014, pp. 139-170

 

Shaffer, Gregory (2015): How the World Trade Organization shapes regulatory governance, Regulation & Governance (2015) 9, pp. 1–15

 

Trebilcock, Michael, Robert Howse  and  Antonia Eliason (2013): The Regulation of International Trade, 4th Edition, Routledge. Selected chapters. (E-publication accessible at http:/​/​www.tandfebooks.com/​isbn/​9780203114650. Accessed 14-8 2017.

 

Trommer, Silke (2017) Post-Brexit Trade Policy Autonomy as Pyrrhic Victory: Being a Middle Power in a Contested Trade Regime, Globalizations, 14:6, 810-819, DOI: 10.1080/​14747731.2017.1330986

 

Wade, Robert (2003): ‘What Strategies Are Viable for Developing Countries Today? The World Trade Organization and the Shrinking of ‘Development Space’, Review of International Political Economy, 10(4), 2003, pp. 621-44

Knowledge of basic International Relations theory is required. Knowledge of International Political Economy theory and issues is an advantage. Advanced knowledge of economic theory or international trade law is not required.
Mix of in class lectures, group work, student presentations and guest-speakers.
  • Category
  • Hours
  • Class Instruction
  • 28
  • Total
  • 28
Individual
Collective
Continuous feedback during the course of the semester

 

Supervision-feedback of individual projects in thematic clusters, and in-class feedback on presentations. 

Credit
7,5 ECTS
Type of assessment
Oral examination
Oral exam with a synopsis
Marking scale
7-point grading scale
Censorship form
No external censorship
Re-exam

- For the semester in which the course takes place: Oral exam with a synopsis

- For the following semesters: Free written assignment

Criteria for exam assesment
  • Grade 12 is given for an outstanding performance: the student lives up to the course's goal description in an independent and convincing manner with no or few and minor shortcomings
  • Grade 7 is given for a good performance: the student is confidently able to live up to the goal description, albeit with several shortcomings
  • Grade 02 is given for an adequate performance: the minimum acceptable performance in which the student is only able to live up to the goal description in an insecure and incomplete manner