China and India in Trade Policy

riset tentang China dan India dalam kebijakan politik dagang
http://www.irsp.nl/previous-research-results.html

IRSP 2009-2010 |RESULTS 

International Research by Students Programme 

RESEARCH 3| ONDERZOEK 3 

China and India 

As responsible stakeholders in International Relations   

   

The  term  ‘responsible  stakeholder’ was  introduced  for  the  first  time by Robert 

Zoellick  during  the  Carnegie   Debates  in  2005.  The  purpose  was  to  initiate  a 

new  understanding of US-China relations  in  the  current world  order. Given  the 

fact  that  China’s  economic  strength  has  grown  tremendously  in  a  short  time 

period,  the  relative  dominance  of  the US within  the  trade  relations with China 

had to be altered, as to prevent a possible shift of power towards Asia. With the 

term‘responsible    stakeholder,’ Zoellick    envisioned    a   world    order    in    which  

politics    would    be  conducted  on  basis  of  multilateralism,  diplomacy  and 

peaceful prosperity. The argument was  that any  state would  likely  support  this 

system, because it offers durability of agreements and general prosperity. 

   Considering the position of  the EU – with  its own challenges  such as  speaking 

with  one  voice,  and    the  changing  representative  faces  –  this  responsible 

stakeholder  point  of  view  is  interesting  because  it  could  accommodate  the 

rising  powers  of  ‘the  East’  and  assign  them  a  solid  place  in  the  current 

international  order,  without  shifting  the  relative  dominance  in  political  and 

economic relations to Asia. 

   Using  a  comparative  case  approach,  we  have  analyzed  the  conditions  of 

contemporary Chinese  and   Indian  trade  politics,  as  well  as  their  bilateral  and 

multilateral  trade  relations.  By  using  the  Hofstede-model  as    a  socialization 

model, we  argue  that we  can make  use  of  trade policies  in  order  to  influence 

the  ‘Dragon’   and  the  ‘Elephant’  in  the  East. We  found  that  by separating  the 

occurring  trade problems  in  structural and  functional problems  it  is possible  to 

identify  which  problems  can  be   most  easily  tackled.  On  these  ‘outer   circle,’ 

or  low  profile challenges  should  the EU and  the Netherlands  focus  first, whilst 

integrating  the  emerging  powers  in  the  system  of  responsible  stakeholders. 

Eventually,  this  should  result  in  a multilateral  system of and equal dominance 

for any major trading partner in the international order. 

   By applying this reasoning, we also  identified the challenges which are more in 

the  center  of    China’s    and    India’s    interests    (core    values).    The    costs    for  

trying    to    influence    these    are  considerably  higher  than  with  the  functional

problems,  and  positive  outcomes  are  less  probable.  We    consider    them  

‘structural    problems’    and    are    mostly    associated    with    concepts    such    as 

‘identity’  and  ‘society’.  These problems  are  called  structural,  due  to  the  length 

of time needed to adapt  them.  Hence, we  argue  that  combating  the  functional 

challenges  first,  these  steps  could  stimulate the  development  of  an  ultimate 

desirable world order. 

   An  example  of  a  functional  problem  for  India  is  its  perceived weakness  as  a 

tool  to  raise  legitimacy  for  specific policy  choices.  Put differently,  it  explains  to 

the  international  community that  it  is  not  capable  of  concluding  an  agreement 

due  to  domestic  interests,  and  vice  versa.  We  recognized  such  a  situation 

during  the  negotiations  on  the  TRIPS-agreement:  India  did  not want  to comply 

at  first,  but  as  soon  as  the  needed  domestic  legitimacy was  raised,  they were 

willing to agree. Arguably,  the  same holds  true  for  the DDA-negotiations, which 

ran  into a deadlock over technical details of the Special Safeguard Mechanism. 

   One    of    the    most    practical    among    the    Chinese    functional    problems  

concerns    the  implementation  and  enforcement  difficulties.  At  the  level  of  the 

central  government  it  appears  there  are  true  intentions  to  implement  the 

WTO-commitments,  but  since  China  is  unique  in  its  size  and  number  of 

stakeholders  involved  –  including  quite  autonomous  provinces  and  cities  – 

China’s  behavior  can  be   categorized  as  hesitant  to make  too many  promises. 

In  the past, one could  have  noticed  that  generous  offers  by  Zhu  Rongji  with  

regard    to    the    WTO-accession  conditions  were  not  always  received  with 

thankful  feelings  in his homeland. This partly explain their  reluctant  attitude  in 

multilateral  talks with  complex  package  deals,  such  as  the  DDA.  In connection 

with  EU  trade  policy,  the  IPR2-project  represents  a  successful  joint   regulation 

and implementation  program.  Similarly,  the  China-EU  trade  could  benefit  from 

Chinese  ‘copycat  behavior’.  Of  course,  this  does  not  refer  to  expensive 

European  intellectual  property,  but  to European legislation models. 

   To  conclude,  responsible  stakeholdership  paves  the  way  for  a  new 

international  order,  with  at  its  core  the  possibility  for  developed  powers  to 

maintain a firm position in world politics and trade.