International Organization and International Relations Year 1 – Block 3 & 4
Week 7: International Organization 1-2
Lecture 13
No class and no readings
Lecture 14 – The EU in the Changing Landscape of IOs
Lecture (p. 2-6)
Readings (p. 7-10)
Chen – China, the European Union and the Fragile World Order
Hopewell – The BRICS: merely a fable? Emerging power alliances in global
trade governance
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Week 7 – Lecture 14: The EU in the Changing Landscape of IOs
Lecture
Hints on how to structure exam preparations
- Start from the lectures
- Follow the hints given by the questions provided per lecture
- Textbook information is supposed to be read and known
- With regard to the academic literature, the arguments and conceptual underpinnings are
important; but not the factual information of case studies
-> make sure that you know the author names that belong to the various articles
A changing landscape of IOs
IOs in the20th century
- After WWII, the number of NGOs and IGOs increased rapidly. In the post-CW period, the latter
decreased again because of dismantling and dissolving of Soviet cooperation organizations
- IOs can be divided in 3 categories: regional, universal, inter-continental
- Regional: vast increase since end of the Cold War
Are new IOs challenging existing ones?
- Shanghai Cooperation Organisation (2003, Shanghai)
- China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, India, Pakistan
- Enhance mutual trust, security and stability in the region; fight against “three evils” of
terrorism, separatism and extremism
- Regularly major military drills
- An East-Central-South Asian “counter-NATO”? This was a fear 15 years ago, but now it has
become clear that this is not the case at all
- UNASUR - Union of South American Nations (2011, Quito)
- Merging of Andean Community and Mercosur, with goal to broaden regional integration
and give stronger voice to South America
- Set up as alternative to US-dominated OAS to limit US influence the region, but break-up
2018-2019 due to political tensions in the region
-> case of failure, because almost all members withdrew. Replacing an existing organization
did not prove to work out
-> these two have not lived up to the expectations and have not challenged existing organizations
The following two organizations can or do challenge existing organizations:
- New Development Bank (2015, Shanghai)
- Brazil, Russia, India, China, South Africa (BRICS): therefore, also known as the BRICS bank
- Initially equal capital shares for all members, increase possible at unanimity
-> thereby it is limiting its capacity and capability, because China could actually contribute
much more
- Slow membership expansion planned, but BRICS retain 55% of capital
- Its purpose is to finance infrastructure projects in member states
- Asian Infrastructure Investment Bank (AIIB)(2015, Beijing)
- This bank is not created on the idea of equality like the BRICS bank above, but China has
been able to attract 70 members
- Currently Chinese veto power (it is just big enough to block all decisions), though this might
change if China allows. Voting powers are coupled with capital and economic power
- Its purpose is to finance infrastructure projects in member states (though with limitations
for non-Asian members; the bank wants to keep its Asian character) Infrastructure projects
outside of the Asian region should have clear and explainable beneficial effects for Asia
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- Both NDB and AIIB seen as potential competitors of World Bank and other regional development
banks like the Asia Development Bank - mainly AIIB, NDB seen as its little brother. Apart from this,
they are also seen as institutional faces of China’s Belt Road initiative - for which they are criticised
Change/Reform within?
- From G7(8) to G20
- G7: Canada, France, Germany, Italy, Japan, UK, US
- 1997-2013: + Russia = G8
- G20: G8 + Argentina, Australia, Brazil, China, India, Indonesia, Republic of Korea, Mexico,
Saudi Arabia, South Africa, Turkey and the EU
- G20 exists since 1999, central forum for macroeconomic policy since 2008 instead of G7(8):
this shifted because of the economic crisis in that period
- World Bank, IMF reform 2010:
- Increased total sum of quotas, increased weight for developing countries and emerging
economies. Although it was considered an important sign, the actual changes are not very
significant
- Delayed ratification of IMF reform by US congress (until 2015), on the basis - of course - of
its veto. It did happen in 2015 because of the set-up of competitive institutions like the AIIB
by China
- Reform within the WTO (second reading assigned for this lecture)
- Emerging power alliance Brazil, China, India, as nucleus for broader developing country
group shifts power away from “Quad” (US, Canada, EU, Japan)
- Emerging powers are not purely economic phenomenon but can have political clout
- Emerging powers can cooperate despite substantial differences
What to make of all this?
- Slightly changing IOs or changing global order?
- Definitions of global/world order: “… world order could be defined as a set of sustainable
arrangements in the international system to allow political entities, and the people within
them, to enjoy a meaningful level of peace, welfare and justice.” (Chen 2016)
- “US-led liberal economic order - the integrated system of international organizations, rules
and norms constructed during the era of American hegemony.” (Hopewell 2017)
- Arguments:
- Liberal international order is resilient (Ikenberry 2011): it will undergo some reform or
challenge, but it will survive the rise of China, because it is actually in the interest of China to
sustain this order (economic growth, political power, etc.)
- New hierarchical world in the making, centred around China, based on Confucian thought
(Bunskoek and Shih 2019)
- Competitive order shaping? (Chen 2016)
- Parallel or complementary? (Chen 2016)
Key points from this first part
- Emerging economies/actors (still) do matter! Although according many, the BRICS would be dead
- China has become a central player
- From order-taker to order-shaper (Chen 2016)
- US: Relative decline as global hegemon
- EU: status questioned by emerging powers, but still undergoing change, reorienting itself (Chen)
EU - Reorientation and geopolitical implications | A closer look at the WTO system
- January 2017:
- US President Donald Trump considers WTO a disaster, to be side-lined or withdrawn from
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- See session 3a on details of his anti-WTO policies
- Chinese President Jinping defends globalization, dismisses economic protectionism,
emphasizes the need to uphold the authority of multilateral institutions and follow
their rules, and calls China’s joining the WTO a correct decision
- Looks like “Beijing will seek to usurp America’s traditional role as the champion of free trade and
open markets” (Guardian)
Implications for the European Union?
- Retreat of the US -> EU risks to lose core ally in multilateral trading system:
- US = core partner on global governance issues (only one named on Global Strategy 2016)
- “TTIP demonstrates the transatlantic commitment to shared values and signals our
willingness to pursue an ambitious rules-based trade agenda.” (Global Strategy 2016)
- TTIP “will strengthen Europe’s relationship with the United States, our most important
political ally and biggest export market, and provide an effective laboratory for global rules.”
(Trade for All 2015)
- Can China be an alternative?
- Comprehensive strategic partner since 2003, second biggest export market for EU
- “The EU should work with China towards consolidating global governance.” (Elements for a
New China Strategy 2016)
- The EU “recognizes the need for and helps to define an increased role for China in the
international system” (Elements for a New China Strategy 2016)
- “The EU should encourage China to play a more engaged and active part at the World Trade
Organisation” (Elements for a New China Strategy 2016)
Top priorities of the EU?
Option 1: Stability and continuity of the WTO system (‘altruistic’)
- “The EU will promote a rules-based global order with multilateralism as its key principle and
the United Nations at its core.” (Global Strategy 2016)
- “The EU should do everything possible to restore the centrality of the WTO as a trade
negotiation forum. Everybody stands to gain from global rules that apply to almost all
countries, 161 at the last count. The biggest losers of a failure to move forward at the WTO
would be the most vulnerable developing countries, as well as countries without an active
bilateral or regional agenda.” (Trade For All 2015)
- “There will be no European retreat from multilateralism. We stand by our commitment to
multilateralism and are prepared to pay, reasonably, to keep the system thriving.” (Global
Europe 2006)
-> focus on promotion of norms - “normative difference”
Normative power Europe (Manners 2002)
Use normative power to transform the world, universalise European norms (Chen 2016)
Option 2: Interests and position of the EU (‘self-interested’)
- “We have an interest in fair and open markets, in shaping global economic and
environmental rules, and in sustainable access to the global commons through open sea,
land, air and space routes.” (Global Strategy 2016)
- “EU trade policy must strengthen Europe’s place in global supply chains. (…) It takes a
holistic approach, covering vital issues like public procurement, competition, including
subsidies, or sanitary and phytosanitary barriers. (…) This requires us to promote trade in
services, facilitate digital trade, support the mobility of professionals, address regulatory
fragmentation, secure access to raw materials, protect innovation and ensure the swift
management of customs.” (Trade for All 2015)
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