Till Schöfer, Clara Weinhardt
The economic rise of Brazil, India and China has engendered significant power shifts on the world stage. International Relations (IR) scholars have often debated the implications of these shifts for established global governance frameworks and the liberal international order.1 Power shift theory points out that established powers are themselves partly responsible for the extent to which existing institutions of global order are accepted or rejected by emerging powers.2 In distinction from previous research, the primary interest of this article is not in whether established powers give up their institutional privileges in response to global power shifts, but in whether emerging powers do so as they rise. While scholars have recently started to recognize that both emerging and established powers may challenge the status quo,3 the latter aspect remains under-studied.4
Why should established powers challenge the institutional privileges of emerging powers? The common assumption is that the existing global order serves the interests of established powers,5 and that this may lead to challenges from emerging powers. What is often overlooked, however, is that international institutions not only grant their most powerful members institutional privileges, such as more extensive voting rights, but also rely on differentiation that seeks to address the disadvantaged position of ‘weaker’ regime members. Along these lines, Caroline Fehl and Katja Freistein note that international organizations often ‘grant … disadvantaged categories of members privileged access to resources’.6 In the world trade regime, several differential treatment provisions are institutionalized that grant developing-country members exemptions and flexibilities regarding liberalization commitments. Similarly, the environmental regime in the 1970s and 1980s established the principle of common but differentiated responsibilities (CBDR) among its members. In recent years, however, the question of whether emerging powers should still be allowed to claim special rights as developing countries has become a subject of heated debate. In times of intensifying interstate economic competition, a low-yield environment and post-pandemic inflationary pressure, established powers are increasingly concerned about their relative economic position vis-à-vis emerging economies. As a result, they have begun to challenge the developing-country privileges to which emerging powers continue to have access. Nevertheless, scholarly research on the strategies that emerging powers have adopted in response to such challenges remains scarce.7
Against this background, this article unpacks recent changes in the strategies that Brazil, India and China (the BICs) have adopted as they come under pressure to ‘graduate’ from access to special rights for developing countries in the World Trade Organization (WTO). One of the WTO's core principles is special and differential treatment (SDT) for members that are classified as ‘developing’, as opposed to ‘developed’ countries. This norm was introduced in the world trade regime in the 1960s to counterbalance demands for trade liberalization with acknowledgement of the special needs of developing countries, given their disadvantageous position in the world economy. Which states count as developing countries is based on self-declaration—which, in principle, includes emerging powers.8 Yet established powers are now pushing for a ‘level playing field’ in the world trade regime. In particular, the United States has proposed to introduce clear-cut criteria that define developing-country members in a way that would exclude emerging powers and other economically more advanced developing-country members from access to differential treatment.9 While some smaller states—notably South Korea and Singapore—have in response agreed to give up future access to differential treatment,10 the main focus of such critiques has been on a handful of emerging powers whose economic size has placed them clearly at the top of the developing-country group.
We present a novel conceptualization of four different strategies that emerging powers could adopt in the light of pressure to give up special rights reserved for ‘weaker’ regime members. While these strategies are not fixed and static, recent contestation of the developing-country status at the WTO is better understood with a clear typology of the ideal typical pathways emerging powers can adopt when faced with adjustment challenges. The four strategies represent different forms of accommodation or resistance, and reflect different combinations of emerging powers' willingness to accept changes in their self-declared status as developing countries and in their practices of making use of the privileges reserved for weaker regime members. In other words, what matters is not only what they say, but also what they do.11
We then illustrate the usefulness of this novel conceptual framework by applying it to the cases of Brazil, India and China in the WTO context. We selected Brazil, India and China as three of the largest emerging economies to examine how they have responded to the adjustment challenges entailed in ongoing contestation at the WTO of special rights for developing countries. Moreover, all three have played important roles in shaping trade negotiations in the WTO era.12
We find that no uniform strategic approach exists across emerging powers. While Brazil adopts a pragmatic approach of accommodation and is willing to refrain from using its developing-country status in future negotiations, India and China fiercely defend their status as disadvantaged regime members. What this implies in practice, however, differs between the two states: while China follows a dual strategy of selective accommodation and resistance by relinquishing special rights reserved for developing countries when it sees few economic benefits accruing from them, India relies on principled resistance and defends exemptions from liberalization as a historically established right of the developing world. This illustrates that the implications of global power shifts for institutional adaptation are not uniform. A grey area exists in which emerging powers neither cling on to nor give up their institutional privileges. Instead, they may adopt strategies that fall in between accommodation and resistance as they gain in power.
Our findings contribute to the literature on rising powers and global governance in three main ways. First, they reverse the conceptual perspective of power shift theory, which tends to assume that institutional adaptation is a result of established powers giving up institutional privileges. Instead, we focus on established powers as challengers. We show that in order to capture institutional adaptation in the light of global power shifts, it is necessary to uncover variation in the strategies of emerging powers as defenders of the status quo—and of their developing-country status. Second, we speak to the growing literature on the ‘graduation dilemma’—and related questions of status—in international relations.13 We show how this leads to the adoption of mixed, and at times ambiguous, positions by emerging powers that are asked to give up the special rights they hold as developing countries. Lastly, our findings are relevant for policy-makers engaged in SDT reform debates at the WTO.
In the following sections, the article reviews the existing literature before exploring whether—and when—the BICs have been reluctant to give up their institutional privileges as developing members of the WTO.
Emerging powers and power shift theory: status quo and conceptual departures
Scholars who focus on the adjustment of international institutions to global power shifts are, in particular, interested in assessing when and how challengers of the status quo are successful in their demands for reform. They note variation in outcomes.14 Emerging powers have, for instance, not been successful in challenging the practice of nominating exclusively European or American nationals for the positions of president or director of the World Bank or the International Monetary Fund (IMF). At the same time, emerging powers are not inherently revisionist, and benefit from many established rules in global economic governance.15 Explanations of this variance focus primarily on divergent constellations of interest and power,16 or issue-specific variables.17
While these strands of power shift theory have made an important contribution to understanding when and why we see institutional adaptation in terms of procedural or substantive membership privileges, blank spots remain. The default assumption is that emerging powers challenge the institutional privileges that established powers hold. Even if scholars more recently have recognized that established powers may also act as challengers,18 the empirical case-studies focus primarily on their role as defenders of the status quo.19 There is a lack of systematic assessment of the strategies that emerging powers can choose as they face pressure to give up special rights reserved for disadvantaged regime members.
We propose to combine the insights of power shift theory on institutional adaptation and constructivist perspectives on the social dimension of status ascriptions to unpack how rising powers may (or may not) adapt the institutional privileges endorsed in special rights for the developing world. Scholars who examine institutional adjustments in the light of global power shifts emphasize that constellations of interest and power shape whether or not defenders of the status quo are willing to give up the institutional privileges they hold. A common assumption is that giving up institutionally entrenched privileges is costly for established powers.20 Conversely, if institutional privileges consist of differential treatment that emerging powers may continue to claim, the constellation of interests is less straightforward.
Differential treatment commonly comes in the form of exemptions and flexibilities that allow ‘weaker’ member states to implement fewer regime obligations. Clinging on to special rights for self-declared developing countries is thus beneficial for emerging powers, for it can allow them to negotiate relative gains vis-à-vis established powers—or simply reflect (protectionist) domestic demands.21 In the WTO context, emerging powers may retain greater leeway to provide subsidies in certain sectors as compared to developed-country members. Yet emerging powers may also lose interest in defending their access to these special rights as they gain in wealth and capacity. Whether this is the case depends on the specific political economy dynamics at stake.
In the WTO context, three potential dynamics stand out. First, emerging powers are characterized by rapid economic growth and a more competitive position in global markets as compared to non-emerging developing countries. They may thus give up access to differential treatment in order to credibly commit to and lock in deeper trade liberalization at home.22 Moreover, while implementation costs may create a disincentive for small developing countries to commit themselves to comprehensive trade liberalization obligations, these costs are likely to decrease as emerging economies build their regulatory capacities.23 Second, in areas of particular interest to an emerging economy, prerogatives to conclude new liberalization agreements could further impede support for controversial differential treatment provisions. This would effectively lead to growing disinterest towards differential treatment. Third, as other emerging powers become more relevant as export markets, the costs of their continued access to SDT—and the associated exemptions or flexibilities regarding liberalization—are likely to grow. Giving up access to special rights could thus be used to put pressure on other emerging economies to follow suit.24
Identity-related considerations also affect incentives to defend the institutional privileges reserved for developing countries. Here, emerging powers again face contradictory incentives. On the one hand, a common assumption in the literature on status is that states with a lower social status strive for ‘higher or distinctive positive status in the international hierarchy’.25 Giving up the status of a developing country could thus be associated with gains in prestige.26 On the other hand, the economic benefits of developing-country status may create incentives to maintain the lower social rank. This point has largely been overlooked in the existing literature, since many (constructivist-leaning) scholars tend to neglect the material side of status.27 As Amrita Narlikar shows, frequent, successful use of poverty narratives to legitimize controversial negotiation positions has brought identity and status issues to centre stage in international trade politics.28 Lastly, in the case of developing-country status, path dependencies and historical legacies dampen pressures to associate lower social rank with lower prestige. Emerging powers' historically established political identities as part of the wider ‘developing’ world or ‘global South’ could simply outlive new economic realities.29
Given these mixed and at times ambiguous incentives, we would expect that emerging powers do not necessarily cling on to ‘privileges’ for the weak as they rise up, and that individual countries may adopt divergent strategies. To capture the tension that exists between changing material interests and status considerations associated with these special rights, we distinguish between a country's willingness (a) to give up its status as a developing country, and (b) to give up the privileges associated with this status in practice. Doing so allows us to paint a more nuanced picture of the strategies that emerging powers could adopt (see table 1).
The strategies adopted by emerging economies may vary between resistance and accommodation. Full accommodation is the result of accepting a status change and giving up special rights in practice. De facto accommodation occurs if a country in practice accepts that it needs to take on greater—or equal—obligations, but defends its status as a developing country. Conversely, principled resistance is a strategy in which an emerging power neither accepts a status change nor adjusts its practices. Lastly, de facto resistance occurs if a change in status seems acceptable, but the country remains unwilling to give up institutional privileges reserved for developing countries in practice. This last strategy is most likely to occur in contexts in which special rights for developing countries are awarded in a highly informal manner, and negotiated on a case-by-case basis rather than granted on the basis of official status.30
The actual strategies chosen may also combine different elements of these ideal-typical depictions and cut across them. For instance, it could well be that an emerging power defends its developing-country status as an expression of South–South solidarity or as part of its own identity and foreign policy discourse,31 but adjusts its practices because exemptions are no longer seen as beneficial. Given such contradictory incentives, we expect that strategies may reflect this ambiguity.
Do the BICs ‘give up’ as they ‘rise up’?
In this section, we delineate the different approaches that the BIC states have displayed since the 2000s regarding special rights for developing countries at the WTO. Using the four ideal-typical strategies outlined above, we can unpack changes over time and across negotiation areas that cumulatively constitute a fine-grained analysis of the experiences and potential drivers of accommodation and resistance. Our analysis rests on a wide source base that centres on the period from the mid-2000s up to 2020, with a particular focus on the years since 2017 when reform of developing-country status took centre stage in WTO debates. It includes submissions and statements made in key WTO forums,32 primary sources that document negotiation positions adopted in the Doha development round, four interviews conducted between June and September 2021 with senior trade officials from Brazil and India involved in WTO negotiations in Geneva, and informal discussions at the WTO's twelfth ministerial conference (13–15 June 2022).33 We find that the three BIC states differ greatly in their handling of graduation from developing-country privileges as they rise economically. While India on the one hand displays a firm and principled resistance to changes in either status or practice, Brazil's changing position in international trade politics has led it to pursue a strategy of accommodation aimed at overcoming negotiation deadlock. China in turn combines these two approaches, selectively employing resistance and accommodation strategies on an issue-specific basis.
Brazil
Brazil's WTO status as a developing country has proven difficult to square with its emergence since the 1980s as a major agricultural exporter. This has become most evident in the variety of coalitions it has participated in—and led—since the early 2000s. At the beginning of the millennium, the Brazilian delegation co-sponsored statements with the Cairns Group, a set of agricultural exporters made up of both developed and developing countries. The main negotiation priority for this grouping consisted of trade liberalization in agriculture via the lowering of tariffs and subsidies on agricultural goods. The potential for a mixed set of liberalization-minded actors to overcome divisions on a contentious trade issue help to explain Brazil's membership of this group ‘between’ industrialized and developing countries. By 2003, however, Brazil was making greater use of its status as a developing country by co-founding the G20. This group of developing countries sought to rebalance international trade and expand the SDT rights provided in the 1995 Agreement on Agriculture. The primary G20 proposal at the Cancún ministerial conference consequently envisaged a broad mix of differential treatment tools, including differentiated domestic support allowances, implementation time-frames and subsidy exemptions.34 Notably, Brazil did not follow China and India in joining the G33, a contemporary developing-country coalition that pursued the more narrow aim of introducing special product (SP) lists and a special safeguard mechanism (SSM) that would allow developing countries to protect their markets from sudden import surges. One former negotiator explained this as follows: ‘[It is] one thing to not be openly offensive trying to conquer markets in developing countries … Something else is to provide them with free range tools which would make trade totally unpredictable.’35 Brazil's endeavours to find compromise solutions to the agricultural impasse consequently allowed it to switch from adhering primarily to the liberalization-orientated Cairns Group to becoming a leader of a diverse developing-country coalition.
By the mid-2010s, Brazilian attempts to move forward on agricultural trade law were resulting in new negotiation constellations. Not only had the G20—and thus Brazil's leadership of it—disappeared from the scene, but so too had Brazilian coalition-building efforts with other developing countries. Instead, 2017 witnessed the submission of a joint proposal on reforming domestic support caps by Brazil and the EU.36 The fact that this proposal contained differentiated caps for developing countries underlines the fluid approach to compromise coalitions that characterizes Brazil's engagement with developing-country rights. Indeed, a reorientation of Brazilian trade policy away from the North–South division became apparent as early as 2015, when an EU–Brazilian proposal on agricultural export subsidies managed to break a deadlock and was translated into trade legislation.37
A pragmatic approach to WTO reform—and to the rights of developing countries—is further reflected in the minimalist approach Brazil has taken towards the Trade Facilitation Agreement (TFA). The TFA itself represents a novel treatment of differentiation at the WTO. Instead of broadly dividing the membership into two groups of (self-declared) developing and developed countries, the TFA allows states to earmark certain obligations as immediately implementable (Category A), implementable after a transition period (Category B) and implementable after a transition period and some technical assistance (Category C). While the latter two categories resemble SDT rights in other agreements, it is significant that, upon signing the TFA, Brazil classified 95.8 per cent of TFA requirements as Category A. This decision to not make use of flexibilities in turn indicates recognition of differences within the developing-country group, and an acknowledgement that Brazil is ready to give up institutional ‘privileges’ reserved for weaker members.
In 2018, the Brazilian delegation submitted a draft text on investment facilitation, with the aim of kick-starting discussions towards a multilateral framework.38 This initiative, in an area that has traditionally been considered an issue for industrialized countries, underlines the continued Brazilian attempts to achieve movement in WTO negotiations. Moreover, the approach to SDT in the draft text accentuates both recognition of growing variation within the developing-country bloc and the integration of developing countries into a common multilateral corpus of trade law. Developing countries are provided with SDT primarily via longer transition schedules than those available to industrialized economies.39 The provisional transition schedules are supplemented, however, by a commitment on the part of developing-country signatories to ‘strive for early implementation of provisions’.40 Here, the capacity of certain developing countries to proceed with implementation at a faster pace suggests that Brazil copes with its emerging economy position by creating SDT rights that are de jure uniform for the whole group of developing countries but can differ in practice owing to selective use. This is further reflected in the Brazilian proposal's treatment of technical assistance. While developed countries are encouraged to provide assistance to developing countries, it is noteworthy that ‘developing Members in a position to do so’ are also called upon to contribute to smaller economies.41
Brazil's fluid position between different groups of WTO members is further borne out by the fact that it remains one of the few developing countries negotiating accession to the Government Procurement Agreement (GPA). The GPA represents one of the few new legislative initiatives to have gained support in the past decade. That said, its scope remains limited to that of a plurilateral agreement, as large portions of the WTO membership—primarily developing countries—have not supported the creation of a common regulatory framework on this ‘new’ issue. Brazil's justification for its status of observer to the GPA—which was followed by a declaration of intent to accede in 2020—was stated in terms of ‘a broader desire and goal of Brazilian society to modernize its economy and improve the management of public resources’.42 This efficiency-driven narrative differs from the interest-based protectionism of other developing countries (on which more below).
Brazil's movement between different positions and its selective incorporation of SDT rights into its trade agenda are perhaps best represented by the Brazilian government's announcement in 2019 that it would forgo the use of its developing-country status to claim SDT in ongoing negotiations. This recent reorientation of Brazilian foreign policy, away from emphasizing South–South ties, consequently places the Bolsonaro administration's new SDT policy alongside US support for Brazil's OECD membership.43 The Bolsonaro government's attempts to align Brazil with the US have amplified its move away from ‘Southern’ coalitions. Brazil has explicitly distanced itself from other developing countries—including India and China—that tend to portray SDT as an inalienable right.44 As put by a former trade delegate:
The other approach is to take SDT as a sort of symbol of development and a symbol of a fight against you name it! Against imperialism, against developed countries … It is a symbolic thing: a kind of enshrined principle that, no matter what, people will have to keep it.45
Brazil's status shift comes against a background of polarized domestic debates regarding the country's position in world politics.46 It does not, however, imply that Brazil has formally given up its developing-country status. As one Brazilian trade delegate claimed,
being increasingly open to giving up its access to SDT does not imply that Brazil is willing to give up its status as a developing country … As much as we would like to or we would love to self-designate us as a developed country, that is the goal, but we are still a developing country.47
The shift in Brazil's strategy reflects the expectation that the benefits of the future use of developing-country flexibilities are limited. As the same Brazilian trade delegate emphasized:
The instruments of flexibility associated with that status were not of use for us any more. On the contrary, they were counterproductive for us. They were counterproductive because those that were using SDT were perhaps those that had the money to subsidize and the money to use for industry and agriculture subsidization, which should hurt us on the more systemic level of the global economy.48
The official government justification for Brazil's status change is in line with the accommodation approach outlined above: ‘The variety of SDT measures and the fact that some of them were only valid for a certain period proves that SDT is dynamic and evolutionary.’49 In explaining this highly flexible approach, it is worth noting the primacy of agricultural interests that many scholars place at the core of Brazilian trade policy.50 Brazil's highly competitive agribusiness sector places the conclusion of negotiations on agricultural products at the top of Brazil's priorities at the WTO. In the early 2000s this allowed Brazil to form and lead the influential G20 group of developing countries, which successfully stalled negotiations in their pursuit of agricultural flexibilities for the global South and the dismantling of high-subsidy regimes in the global North. With the continued WTO negotiating impasse in the 2010s and the emergence of large-scale agricultural subsidization in the global South, Brazil has abandoned this strategy and departed from its Southern leadership role in an attempt to keep negotiations moving.
In the Brazilian case, the contrast between its position in the early 2000s at the head of developing-country negotiating coalitions and its new, flexible trade strategy is starkly apparent. As shown above, this shift in its strategy predates—but was further accelerated by—the Bolsonaro administration which came to power in 2019. Brazil's pragmatic strategy of accommodation also came to the fore in its behaviour at the 2022 ministerial conference. Here, the Brazilian delegation circulated a compromise-orientated communication that focused on agriculture and public food stockholding. Reflecting Brazil's broader attempts to position itself as a flexible mediator in recent trade talks, the statement labelled market price support as ‘the most distortive agricultural policy’ while calling for more research on the roles and implications of public stockholding programmes.51 A Brazilian proposal at the twelfth ministerial meeting to hold conferences annually—rather than every two years—did not attract substantial support.52 Compared to China and India, Brazil did not play a crucial role in the contested negotiations of developing-country exemptions regarding fisheries subsidies or the intellectual property waiver for COVID-19 vaccines.
India
While Brazilian approaches to agriculture reflect a flexible, consensus-based approach to WTO politics, in the case of India agricultural reform highlights continuity in its promotion of SDT expansion and the maintenance of developing-country coalitions. Correcting historical and contemporary imbalances in international trade accordingly constitutes a cornerstone of India's negotiating stance. This has the dual effect of placing the impetus for trade reform on industrialized countries and limiting Indian enthusiasm for the expansion of the WTO's legislative frontier beyond traditional sectors, such as agriculture, to new issue areas.
Together with Brazil, India co-founded the G20 in the early 2000s to counteract the perceived EU–US dominance of agriculture talks. Alongside the G20's broad set of negotiation priorities run the narrower objectives of the G33, of which India is also a member. This latter grouping sought to introduce SP lists and an SSM to limit access to domestic markets in the event of import surges. India's strong support for these new SDT tools fits well with its general approach to agricultural reform, which places the emphasis on developed countries taking ‘five steps forward in the removal of trade-distorting subsidies’ before developing countries take ‘one step forward in the area of market access’.53
In 2008, WTO negotiations broke down over disagreements between the EU, the US, Brazil, India and China over market opening in agriculture and industrial goods. In essence, the US and other major industrialized countries in the global North became increasingly unwilling to grant exemptions from tariff cuts on industrial goods to ‘emerging’ developing countries. The US Chamber of Commerce, for instance, claimed that ‘India and China are emerging powers, but with great power comes great responsibility’,54 indicating that exemptions or flexibilities regarding market opening commitments based on their developing-country status were no longer considered legitimate. As a result, negotiations broke down primarily because of disagreement between the US and India (supported partly by China) over an SSM for developing countries in agriculture.
In the late 2010s the same approach to trade reform as outlined above may be observed. Throughout the past decade, the G33 has submitted a variety of proposals calling for the establishment of new SDT tools for developing countries in the field of agriculture. Moreover, in parallel to an EU–Brazil reform proposal that sought to cap domestic support in general, India and China submitted their own proposal at the 2017 Buenos Aires ministerial conference, targeting developed countries. This alternative submission focused on reforming the aggregate measure of support (AMS) rules, which provided domestic support entitlements to a specified list of countries—90 per cent of which are industrialized economies. Correcting this historical imbalance was clearly labelled as a ‘pre-requisite for consideration of other reforms in domestic support negotiations’.55 Coupled with a clear identification of subsidies in the US, the EU and Canada,56 the text co-submitted by India—together with China—accentuates the defensive stance that India has maintained on agricultural reform.
Resistance to new policy initiatives can also be seen in India's engagement with the expansion of the Information Technology Agreement (ITA). In 2014, the Indian Ministry of Commerce and Industry approached this issue with the cautious distrust outlined above: ‘India's experience with the ITA has been most discouraging, which almost wiped out the IT industry from India. The real gainer from that agreement has been China, which raised its global market share from 2% to 14% between 2000–2011’. Non-participation in the ITA expansion in turn rests on protectionist, infant industry narratives: ‘This is the time for us to incubate our industry rather than expose it to undue pressures of competition.’57
This strong rejection of expanded regulations on new issues mirrors an Indian reluctance to join initiatives on government procurement in the early 2000s. Such talks were marked by the insistence of the Indian delegation that ‘procurement was an important tool used by governmental authorities in developing countries to purse their social and development objectives’.58 This in turn required developing countries to retain flexibility on procurement,59 and/or for members to have the freedom to indicate exceptions to common procurement rules with respect to development objectives.60 Avoiding the expansion of commitments, particularly on new issue areas, consequently forms a common theme in India's rise since the 1990s. Compared to Brazil and China, India has not opted for selective use of SDT rights. For example, India has made greater use of the transition scheduling afforded under the TFA compared to Brazil and China, classifying 27.7 per cent of commitments as Category B—i.e. as commitments that required a transition period. While trade facilitation is unique in that it is a positive-sum negotiating issue—and hence one in which states do not have defensive interests—India's use of SDT in the TFA reflects its concerns over its capacity for implementation, which is seen to be below that of industrialized countries or the other two BIC states.
Perhaps the clearest example of India's entrenched position of principled resistance over the past two decades comes in its response to attempts at reforming differential treatment. In 2019, a 45-page US proposal explicitly called for a more differentiated WTO.61 The proposal suggests moving away from auto-election to a definitions-based approach that would entail defining the group of beneficiaries in line with specific economic criteria. According to the proposed criteria, many middle-income countries in the global South would lose their developing-country status altogether. The proposal was accompanied by similar calls from the G7 and the EU.62 Indian resistance remained steadfast. As a former Indian trade negotiator pointed out: ‘One political thing is that from the US perspective or from the Quad [US, EU, Canada and Japan] perspective, they would like to break the unity of the developing country group.’63
Moreover, the Indian strategy of principled resistance reflects an understanding of SDT as an inalienable right, rather than a dynamic and flexible principle. In response to the US memorandum on SDT reform, a group of 52 developing countries—including India and China—submitted a joint statement at the WTO General Council that rejected the US proposal.64 Instead of the evolutionary and dynamic approach associated with graduation, they insisted on SDT as a special right that developing countries can apply as they wish:
As a fundamental right granted to all developing Members, each developing Member shall, based upon its own particular situation, make the decision by itself on whether, when, where and how to use S&DT, and to what extent as well.65
India, China, South Africa and Venezuela strongly opposed the US-led reform proposals and further tabled a counter-statement on ‘The continued relevance of Special and Differential Treatment in favour of developing Members to promote development and ensure inclusiveness’.66
The rigidity of India's strategy of principled resistance reflects continuities in both its interests and its external identity narratives. Subsistence farming and food security concerns continue to influence Indian positions on the liberalization of agricultural trade. Indeed, along with China, India has emerged as one of the main subsidizers of agricultural products in the global South. At the same time—and in contrast to Brazil—India has not built up strong offensive interests or an overwhelming competitiveness in particular negotiation areas. Alongside India's entrenched interests in safeguarding SDT rights, it is unlikely that the country will give up its developing-country status as its foreign policy has been heavily characterized by themes of North–South division, developing-country solidarity and ‘poverty narratives’.67
At the 2022 ministerial conference, Indian resistance to reform proposals dominated trade talks and was markedly framed along North–South lines. On fisheries subsidies, the Indian delegation sought a lengthy 25-year transition period for developing countries on overfishing subsidy rules, with Commerce Minister Piyush Goyal publicly stressing developing-country concerns.68 Similarly, in agriculture India continued to push for special measures on public food stockholding that would allow developing countries to combat food security concerns via state controls.69 Perhaps most prominently, India and South Africa have spearheaded the push for a developing-country intellectual property waiver on COVID-19 vaccines.70 This initiative, which came to fruition at the 2022 ministerial conference, embodies India's Southern leadership and its continued insistence on special rights for developing countries, while also recognizing that some larger players should refrain from waiver use (see the section on China below).
To sum up, India's position at the head of these vocally defensive groups reflects its stable position of principled resistance on SDT and developing-country status. This forms part of a piecemeal shift in self-conceptualizations that has allowed India to exhibit status-seeking behaviour on the world stage71—although it falls short of the fervent status-seeking of, say, China.72 While India has risen, it has remained reluctant to engage actively with the expansion of the WTO's legislative frontier to new issue areas, has pushed for trade reform—primarily in agriculture—to target distortions in industrialized countries, and has attempted to safeguard SDT rights, both for Least Developed Countries and the developing-country group as a whole.
China
In contrast to Brazil and India, China pursues a strategy of selective accommodation. While China has consistently claimed developing-country status since joining the WTO in 2001, it accepted less differential treatment compared to other developing countries in its accession commitments.
During its accession negotiations in the 1990s, China explicitly sought to join with the status of a developing-country member, given its low per capita income and remaining developmental challenges.73 The United States in turn argued that the sheer size of China as a global trader dictated that it enter the WTO without developing-country status,74 and thus without access to SDT. Conversely, the EU and Japan were more willing to recognize the developmental challenges facing China. In 1996, the EU tried to ease political tensions and to defuse at least the rhetoric over China's status as a developing country. It dropped the firm reference to developing-country status and began to talk in terms of a case-by-case, or sectoral, approach to China's accession. This shift was preceded by a decision to phase out China's preferential trade status under the EU's Generalized System of Preferences beginning in 1997.75
China accepted the compromise, partly as a result of highly asymmetrical accession negotiations. It gave up its demand for comprehensive developing-country status, and agreed to negotiate transition periods only for sectors genuinely in need of SDT—i.e. those it considered to have serious adjustment difficulties such as agriculture.76 While China's accession protocol does not define its membership status, China's self-declared developing-country status was in effect only applied selectively. China thus negotiated ‘developing-country’ exemptions in some areas, but took on more extensive obligations on issues such as the protection of intellectual property rights, industrial subsidies, transparency and safeguards, when compared to other developing countries.77 China also had to take on more extensive tariff cuts. This indicates that when considering practices, there was considerable leeway in interpreting the special rights granted to self-declared beneficiaries of SDT. Conversely, Brazil's and India's liberalization commitments as set out in the Uruguay Round agreements are in line with those of other developing-country members.
Flexibility in practices did not, however, prevent the Chinese delegation from insisting on China being, in principle, a developing country. In a case in the early 2000s on US steel safeguards,78 China argued in favour of SDT treatment as a developing-country member and contested US reliance on criteria stemming from the Generalized System of Preferences (a preferential market access scheme) to determine its status. While US–Chinese frictions centred on a US attempt to articulate formal criteria for SDT application, the Appellate Body did not rule on this aspect of the dispute.
However, as China has grown economically it has also exhibited a more pragmatic approach to differential treatment in new pieces of trade legislation. China has barely used the special rights provided to developing-country members in the TFA. It classified 94.5 per cent of TFA provisions as Category A—i.e. implemented them immediately. The remaining 5.5 per cent were marked as belonging to Category B, so were implemented after a transition period. This implies that China has made only selective use of its SDT rights. Weinian Hu even claims that ‘the developing member status appears irrelevant for [China] in implementing the [TFA's] provisions’.79
The expansion of the ITA—in which China plays a key role—also shows that SDT does not always occupy centre stage in negotiations on new legislation. The WTO reports that the negotiating parties explicitly ‘decided not to include general provisions on special and differential treatment among participants or to allow for exceptions to the final product coverage’.80 However, negotiating parties to the ITA expansion did allow countries to mark certain product groups as particularly important to their domestic innovation and manufacturing sectors ‘in exceptional circumstances for highly sensitive products’.81 According to Dieter Ernst, this clause was mainly attributable to China's insistence on its inclusion.82 China has in turn marked more products with final bound rates greater than zero—and with longer transition periods—than any of the Quad countries. This indicates that China negotiated more favourable terms for itself but did not do so under the SDT principle.
Aside from this pragmatic approach of accommodation in new, plurilateral agreements, China did not shy away from claiming special rights as a developing country in sectors in which it pursues more protectionist policies. China's multiple identities, and its struggle for status on the world stage,83 thus translate into a mixture of strategies at the level of WTO negotiations and domestic trade policy. This can be seen in particular in agricultural negotiations, where India and China have sought to maintain high levels of subsidies justified with reference to the development challenges they continue to face. China stresses that poverty remains concentrated in rural areas,84 and that agricultural production largely rests on small-scale farming rather than on highly industrialized agribusinesses.85 Negotiations over domestic subsidies in agriculture thus remain inconclusive, especially because of the stand-off between the United States and China. Similarly, negotiations on fisheries subsidies have remained in deadlock for decades.86
The WTO's 2022 ministerial conference confirmed China's strategy of self-determined selective accommodation. Here, Chinese access to special rights for developing countries once again posed a major stumbling block: one of the most prominent proposals on the table called for a developing-country waiver from intellectual property rules regarding COVID-19 vaccines. Draft texts of the waiver document tried to formulate thresholds that would exclude China, as one of the world's main vaccine producers, from the list of beneficiaries.87 Yet China insisted on not being formally excluded from this blanket right for developing countries. As a result, in a negotiated middle position, the outcome document did not explicitly limit the list of beneficiaries, but called on those developing countries with vaccine manufacturing capacity to make a binding commitment not to avail themselves of the waiver.88 China in turn announced that it would forgo use of the waiver,89 illustrating its flexible approach. Similarly, China agreed to a compromise agreement on fisheries subsidies at the ministerial conference in 2022, given its expectation of limited material disadvantages from the narrowed-down agreement.
In sum, across a range of issue areas China practises a dual strategy of accommodation and resistance. The sector-by-sector differences in China's approach to developing-country status underline the complexities engendered by its particular mix of interests and path-dependent status concerns. China is caught between interests- and status-based considerations. Its repeated claim to be the ‘world's largest developing country’90 is balanced out in areas where China perceives an advantage in the conclusion of new trade legislation. In other areas, however, the weighting of interests and status is different as—for example on agricultural subsidies—China prefers to maintain its access to the existing SDT system.
Conclusion
This article has examined whether emerging powers give up some of the institutional privileges they hold in the WTO as they rise up economically. Focusing on these special rights for developing countries has allowed us to reverse the analytical focus of institutional accounts of power shift theory;91 here we focus on established—rather than emerging—powers as challengers of the status quo in the light of global power shifts. Emerging powers may benefit from clinging on to the status quo of institutional ‘privileges’ reserved for developing countries notwithstanding their economic rise. While institutional power shift theory is primarily interested in the challengers of given institutional privileges,92 we shed light on the strategies of emerging powers as defenders of the status quo.
To capture variation in the strategies of emerging powers, we presented a novel conceptual framework that combines elements of accommodation and resistance. This conceptualization helped us to capture how Brazil, India and China have pursued widely divergent strategies at the WTO, especially over the past decade. In the WTO context, developing-country members have access to flexibilities and exemptions from liberalization commitments. Emerging powers have come under pressure to give up these privileges, given their economic rise.
Two observations stand out from the WTO case. First, our conceptualization helped us to uncover variation in the strategies of emerging powers. While all three of them defend their formal status as developing-country members of the WTO, shedding light on the differing extents to which they make use of the related special rights highlights significant variation among them. As our case-studies show, Brazil adopts a flexible, consensus-based approach to overcoming deadlock, which has allowed it largely to accommodate established powers' demands. Conversely, India firmly clings on to developing-country privileges and resists pressure to adjust. Between these two positions, China has adopted a stance that combines elements of resistance and accommodation. The nuances we find suggests that institutional change related to graduation from developing-country status may be gradual. A grey area exists in which emerging powers neither cling to nor give up their institutional privileges. To understand institutional change in the light of global power shifts, closer attention to these divergent strategies of emerging powers as defenders—rather than challengers93—of the status quo is needed.
Second, the variation we find reflects different levels of willingness to accommodate pressures from established powers to give up special rights for developing countries. This willingness is in turn informed by both divergent assessments of the material benefits associated with differential treatment and path-dependent foreign policy identities. At one end of the spectrum, Brazil's trade policy priorities in its competitive agricultural sector have led it to retool its WTO negotiation strategy away from leadership of Southern coalitions. This position stands in diametric opposition to the entrenched position of India, whose economic interests in developing-country flexibilities align with its strong promotion of membership in and leadership of the global South. China remains cautiously defensive on many issues where its policy space or SDT rights could be limited, while pursuing a policy of selective adaptation in areas where it does not perceive a material disadvantage. While institutional power shift theory tends to expect that defenders of the status quo associate access to institutional privileges with benefits,94 our findings show that emerging powers' incentives to maintain developing-country status are more complex. While some trade liberalization exemptions and flexibilities granted under SDT remain beneficial,95 others seemingly lose their attraction as a result of domestic development models and sector-specific dynamics.96
These findings also add to recent debates about the ‘graduation dilemma’ in international relations.97 Focusing on the Brazilian case, this literature has sought to underline the growing volatility of foreign policy courses that emerging powers face as they rise, and has highlighted the lack of a common format of graduation from developing-country or emerging power status.98 Emerging economies are consequently stuck in a ‘graduation dilemma’, leading to complex and unclear trajectories. We have observed how Brazil and, to some extent, China have been willing to give up some developing-country privileges but are reluctant to give up their developing-country status. These contradictions reflect this ‘graduation dilemma’. The simplistic classifications that many international regimes offer to differentiate between ‘developed’ and ‘developing countries’99 may not do justice to the gradual changes and ambiguities observed in emerging economies.
These findings have policy implications for ongoing discussions of WTO reform. The reluctance of key emerging powers to relinquish their status as developing countries indicates that the recent US proposal to introduce clear-cut criteria to define this status in the WTO100 is unlikely to resolve the contested debate on differentiation. Reform proposals that rely on voluntary adaptation are more promising. Attempts to decouple developing-country status from compensatory rights would also be more successful than outright redefinitions of the developing-country group's membership. Similar developments can be observed in the climate regime, where emerging powers have gradually—and on a voluntary basis—given up developing-country exemptions from mitigation commitments. Reforms that directly address developing-country status in turn are in danger of quickly dissipating. As the current director-general of the WTO, Ngozi Okonjo-Iweala, has recently noted: ‘The issue of Special and Differential Treatment (SDT) is a divisive one that undermines trust. However, the voluntary action of some developing country Members to not avail themselves of SDT in the future points a way forward.’101
However, such voluntary bottom-up approaches are also unlikely to fully resolve the conflict surrounding the status and rights of emerging powers, since some emerging powers continue to see SDT as an inalienable right. Continued conflict in turn presents a hazard to other developing countries that could greatly benefit from differential treatment.102 Ultimately, disagreement over how to reform the ‘privileges’ of the weak in the light of global power shifts is entangled with a broader political power struggle between emerging and established powers,103 and a value-based conflict over the trade and development linkage that manifests itself in divergent assessments of the benefits of differential treatment.104
While these findings are specific to the WTO, differential treatment for developing countries also prevails in many other regimes,105 in particular in climate governance.106 Further research is thus needed to examine comparatively how the strategies of emerging powers differ across different regimes of global governance as their developing-country status becomes contested.
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