Book Review: Soo Yeon Kim,Power and the Governance of Global Trade: From the GATT to the WTO

‘Why does global trade governance… look the way it does? And what have been its consequences?’ (p. 4). Soo Yeon Kim, Assistant Professor of Political Science at the National University of Singapore, poses these questions in her first monograph, ¹ Power and the Governance of Global Trade. An answer to each question is provided in the book’s two methodologically diverse sections. The first, ‘Rules’, uses a qualitative approach to examine the roots of the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) and how their respective institutional frameworks have developed. The ‘power’ variable (Chapter 1) shows how the United States (US) and its relations with other major powers shaped first the GATT and subsequently the WTO, and Chapter 2 consolidates this analysis by questioning why the rules changed so little during the GATT’s 48-year existence. In Section 2, ‘Consequences’, the two chapters use a gravity model approach to examine the respective distributive consequences of the GATT and the WTO in terms of expanding trade. Chapter 3 provides a statistical analysis of those countries benefiting from the principal supplier principle and shows how the GATT’s institutional structure skewed its benefits towards industrialised countries (p. 98). Chapter 4, meanwhile, gives evidence that this developed–developing country divide has continued into the WTO.

The study’s comprehensiveness and mixed-method approach are to be applauded. Kim covers both the history and politics of the regime’s establishment as well as its economic effects. This is no mean feat since, by looking at both rules and consequences, it ‘[bridges] the gap in existing studies’ which focus on one or the other (p. 14).

Section 1 uses power and time as the variables impacting institutional design, and it makes an important contribution to the literature in the ‘power-politics’ paradigm (p. 10). It does so by recognising the importance of changing power dynamics in institutional design, which has often been neglected in such analyses for a focus on ‘credible commitments, self-enforcing agreements, and cooperation for mutual benefit’, thus answering a call to ‘analyze “more fully and explicitly” the role of power’ in institutions. ² Kim’s analysis of the ‘characteristics of the principal architects’ during the GATT’s post-World War II creation is also valuable in ‘[determining] the kinds of cooperation problems that arise, how they are resolved, and ultimately, the kind of institution that emerges to govern’ (p. 10). Though the impact of the US on post-World War II institutions is relatively undisputed, Kim skilfully picks apart the components of that power and their respective impact on the agreement as a whole and complements this with the statistical evidence of that impact in Section 2. In addition, the institution’s progress over time sheds light on how certain product exceptions and bargaining practices incorporated at the behest of the great powers of the time induced a more centralised and flexible system. It was centralised insofar as they would often present an agreement reached among themselves as a fait accompli to the rest of the Contracting Parties, and flexible insofar as this meant they were able to ensure the inclusion of loopholes for products which were sensitive domestically. The priority given to the great powers’ wishes in turn raised the institution’s resilience to change since they were later unwilling to relinquish that influence and governing by exceptions became the norm. The consequences of this can still be seen today in the problems surrounding the Doha Development Agenda (DDA) (p. 94).

The GATT’s reputation as an ‘exclusive country club’ (p. 9) outlined in Section 1, makes the results of Chapter 3 – co-authored with Joanne Gowa and highlighting that ‘the distribution of the benefits of GATT membership was severely skewed’ (p.109) – somewhat unsurprising. Kim’s most interesting statistical finding lies in her examination of the WTO’s distributive effects in Chapter 4. Here, she finds that the extent of the benefits gleaned from trade liberalisation under the regime depends on when members – classified as ‘standing members’, ‘early adopters’ or ‘later entrants’ – acceded to the WTO. Though the more stringent accession requirements introduced under the WTO and favouring ‘behind the border’ reform have increased trade for transition and developing countries joining the regime (p. 136), the North–South divide remains. Those who joined after the WTO’s 1995 establishment (‘later entrants’) have seen more trade expansion under its auspices than the original GATT ‘standing members’. ‘Early adopters’ who joined during the Uruguay Round have seen varying results in their trade with WTO members, depending on the data set used. All in all, the results show that ‘the WTO has a varied but positive impact on trade creation’ (p. 138) but that, when examined in detail, the consequences are far more complex. Though both intra-North and intra-South trade have increased since 1995, North–South trade has declined. An increased inclusiveness of developing countries and a fairer decision-making process in the WTO have not corrected ‘the global trading system[’s]… deficiencies vis-a-vis the developing countries’ (p. 13).

Kim presents a rich, multifaceted examination of the international trading system and successfully accomplishes her aim of finding evidence to support those who fear the WTO (and globalisation more generally) does more harm than good. And she does so by presenting context alongside hard outcomes: the importance of sequencing presented in Section 1 complements the later statistical analysis, and vice versa. Though some may find the two sections too starkly divided, Kim’s decision to separate them thus means each has a stand-alone value, increasing the book’s worth and potential readership. In ‘Consequences’, the differentiation of WTO members by timing of entry means there is little focus on the institutional impact of the emerging powers. An analysis of these changing power dynamics – evidenced by WTO coalitions on agriculture such as the G20 and G33 – could have highlighted how developing countries are responding to the institutional power divide Kim identifies and would have been an added bonus to what is already an in-depth analysis. As the future of the DDA remains uncertain, Power and the Governance of Global Trade provides an opportunity for reflection on the trade regime’s history and its recent distributional consequences. Scholars, students and policymakers alike will benefit from this clearly written, thorough analysis of a complex and sometimes controversial regime, and its mixed-methods approach will hopefully inspire others to follow suit.

Helen Coskeran