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Asymmetric Trade Negotiations.


Editors: Sanoussi Bilal, Philippe de Lombaerde and Dianna Tussle

Published by: Ashgate, Farnham, Surrey, UK, 2011,222pp, 55 [pounds sterling].


Given that almost all of New Zealand's trade negotiations are with larger partners (only Brunei is smaller), this book on asymmetry and how to cope with it is timely.

The theme of this book is straightforward: small partners are always at a disadvantage in trade negotiations. While trade deals are constructed by offers and acceptances, in theory giving all parties equal opportunities to say yes or no, it is the larger partners that can afford to refuse to accept a particular trade-off. Resulting agreements reflect a set of bargains biased in favour of the powerful. Furthermore, each successive trade agreement sets the agendas and standards for subsequent negotiations, so the global trade regime increasingly reflects the preferences of the North, particularly the United States.

The WTO ostensibly provides a rules-based framework equally accessible to all members, small as well as large, and this is valued by New Zealand. But as Woolcock's chapter shows, this framework favours the players with more institutional resources and influence as well as extra-institutional options to engage, manipulate, or avoid WTO disciplines and dispute settlement processes. The WTO is coloured by what Woolcock calls the 'OECD Consensus', which appears to be a trade counterpart of 'the Washington Consensus' regarding international aid and loans.

As multilateralism has stalled, not least because at Cancun in 2003 leading members of the South such as Brazil and India and other G22 states have begun to resist, bilateralism has emerged among states of the North as the preferred mode of trade talks. But whatever biases infect multilateral institutions, they are less detrimental to the interests of small players than bilateral negotiations with big players. Not only can big players refuse to play except by their own rules but also they have begun loading the trade agenda with non-trade demands such as protection of foreign investment and intellectual property, curbing of government procurement, health, and welfare options, and imposition of environmental and labour standards. These latter strictures neutralise some of the comparative advantages enjoyed by the South (low labour costs, for example) and also raise compliance costs for governments already burdened with debt and deficient in administrative expertise. 'Reciprocity' and 'the single undertaking' (comprehensiveness) are doctrines of the North that clash with the South's requests for 'special and differential treatment'. As the editors sum it up, 'equal treatment among unequal partners constitutes a form of discrimination in itself'.

The bulk of the book comprises five chapters detailing how asymmetry is manifested in the European Union's negotiations with the ACP and Latin American countries and the United States' negotiations with Colombia and Thailand and in the abortive Free Trade Area of the Americas. In each case the authors present data showing the smaller partners' greater dependence on the larger partners' markets than the reverse, graphically illustrating this facet of structural asymmetry.

How can the developing countries cope with asymmetry? The authors suggest three strategies for the South: form sympathetic inter-governmental coalitions (such as the G-22, G-33, G-77, and G-90); ally with non-state actors (international non-governmental organisations, civil society); and shape international norms to favour the weak by encouraging new norms and forming a new consensus (or new 'epistemic communities'). The authors call the latter 'the power politics of knowledge'. Their concluding recommendation is: victims act!

While this book is grounded on dependency theory popular in the 1970s and sidelined by the 1990s, it offers credible examples from the 21st century. And while its prescriptions are neither new nor well articulated, they constitute a timely reminder of enduring global political-economic imbalances. For New Zealand the implied lessons are: beware of asymmetry biases, be wary of unequal bargains, and act collectively and morally to secure the best deal possible.

Associate Professor Stephen Hoadley teaches economic statecraft and foreign policies at the University of Auckland.
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Author:Hoadley, Stephen
Publication:New Zealand International Review
Article Type:Book review
Date:Nov 1, 2012
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