VOLUME 2, N O . 1
M AY 2006
FRONT MATTER
3
Editor’s Note
NOTES
4
The French Social Model in Times of Globalisation
Riccardo Brizzi
12
A Hollow Hopelessness: Shortfalls in Unidimensional Demand for
Law Models
Jonathan C. Bond
ARTICLES
26
New Labour’s Ethical Foreign policy With Regards to China
Kayte Rath
64
The Domestic Politics of Thailand’s Bilateral Free Trade Agreement
Policy
Pajnapa Peamsilpakulchorn
INTERNATIONAL PUBLIC POLICY REVIEW
Editorial Staff, Volume 2 (2005/06):
General Editors
Erika Carlsson, MSc International Public Policy, External communication
Alesa Esmond, MSc International Public Policy, Submissions editor
Mette Ostergaard, MSc International Public Policy, Futures projects
Adam Landsman, MSc International Public Policy, Webmaster
Stephen Lee, MSc International Public Policy, Editorial review
Joshua Mendelsohn, PhD School of Public Policy, Internal communication
Jo Setters, MSc International Public Policy, Coordinator
Academic Review Panel
Dr. Fiona Adamson, chair
Dr. David Coen
Dr. Fabio Franchino
Dr. David Hudson
Dr. Jennifer van Heerde
Editorial Board
Jorge Alday, MSc International Public Policy
Erika Carlsson, MSc International Public Policy
Ruihua Chang, MSc International Public Policy
Laurence Hopkins, MSc Public Policy
Sven Kerpen, PhD School of Public Policy
Adam Landsman, MSc International Public Policy
Ernest Lau, MSc Public Policy
Stephen Lee, MSc International Public Policy
Jonathan McClory, MSc International Public Policy
Joshua Mendelsohn, PhD School of Public Policy
Mette Ostergaard, MSc International Public Policy
Jinnifer Park, MSc International Public Policy
Nikki Salisbury, MSc Public Policy
Jo Setters, MSc International Public Policy
Amina Shafi, MSc International Public Policy
Manpreet Sidhu, MSc International Public Policy
Cristina Tiron, MSc International Public Policy
Tim Weeple, MSc International Public Policy
The INTERNATIONAL PUBLIC POLICY REVIEW (ISSN: 1748-5207) is a peerreviewed, student-edited, and faculty-supervised academic journal published semiannually by the University College London School of Public Policy, London, UK.
IPPR welcomes submissions from faculty and postgraduate students of any
educational institution, of both Articles (original empirical investigations, between
8000 and 15000 words) and Essays/Notes (empirical or scholarly commentary pieces,
between 3000 and 5500 words). All submissions are reviewed anonymously. The
Academic Review Panel and the plenary session of the Editorial Board must also
approve pieces selected for publication by anonymous referees. Manuscripts may be
submitted electronically to ippr@ucl.ac.uk or sent in hard copy to the address below.
(For non-electronic submissions, two copies must be provided, and manuscripts will
not be returned.) All submissions must include the Submission Form and conform to
the style and formatting guidelines provided at:
http://www.ucl.ac.uk/spp/ippr/submissions/
To request article reprints, to submit non-electronic manuscripts, as well as for
comments or other queries, please contact: General Editors, INTERNATIONAL PUBLIC
POLICY REVIEW , School of Public Policy, University College London, 29/30
Tavistock Square, London, WC1H 9QU, United Kingdom.
For the most recent issue and article archives, please visit IPPR online at:
http://www.ucl.ac.uk/spp/ippr/.
INTERNATIONAL PUBLIC POLICY REVIEW , vol. 2, no. 1 (May 2006). [ ISSN 1748-5207]
© 2006 by The School of Public Policy, University College London, London, United Kingdom. All rights
reserved.
EDITORS’ NOTE
Vol. 2, No. 1
Last year this journal published its inaugural edition and took a step
out into the field of international public policy, with the acknowledgement
that the field was subject to a certain amount of definitional ambiguity.
Undoubtedly it will take a while longer to generate a broad agreement in
the academic world on the meaning of public policy as an international
phenomenon or, to put it another way, on the relevance of international
issues to public policy.
Competing definitions are nothing unusual in academia, least of all in
the social sciences. It reflects, in part, the fact that there are different
viewpoints on complex phenomena. In the present case it is also a result
of an emerging discipline, or inter-disciplinary field, that has not yet
established its place in the academic firmament. It does not, however,
mean that there are no boundaries to the scope of study. Nor does it imply
that there are no immediately recognisable international public policy
issues, based on the definition that was adopted in the first issue of this
journal: that it pertains to areas of governance and public policy that are
either international or strongly affected by international factors.
At the time of writing, to name but a few of the contemporary issues
that our definition covers, there are important debates about the future
structure and role of the International Monetary Fund; the proper
international response to the insistence by Iran of proceeding with its
nuclear programme; the increasing doubt over whether the Doha Round in
the W TO will deliver what has been hoped for it; the prospects for deeper
integration within the European Union and possibilities for future
enlargement.
The articles in this edition nicely illustrate elements of the evolving
definition of this field of study by relating to areas that are recognisably
concerned with international dimensions of public policy. Some of them
examine the impact of international issues on national policymaking
whilst others consider national policy making with an international aspect.
In The Domestic Politics of Thailand’s Bilateral Free Trade Agreement
Policy, Pajnapa Peamsilpakulchorn gives a detailed account of the
domestic politics that have accompanied that country’s policy of
developing international trade agreements, including significant
agreements with both Japan and the United States. Kayte Rath takes a
very different look at domestic policy making. In this case, New Labour’s
Ethical Foreign policy With Regards to China considers the extent to
which the ethical considerations, which the British government professed
to hold dear, have been maintained in the light of contemporary events.
3
4
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
In A Hollow Hopelessness: Shortfalls in Unidimensional Demand for
Law Models, Jonathan Bond centres his analysis on the demand for legal
institutions in transition countries by placing the question firmly in the
current literature on the subject. Finally, in The French Social Model in
Times of Globalisation, Riccardo Brizzi presents a point of view on the
way the French are adjusting, or perhaps not adjusting, to the changing
international environment. This piece might represent a rather
unconventional approach for a typical academic journal yet helps us to
meet our goal of locating the International Public Policy Review at the
centre of both fine scholarship and timely debate.
Each of these papers provides a well-considered viewpoint on some
aspect of international public policy. Taken together, they begin to
outline the scope and breadth of this emerging field. We hope that they
will provide stimulating reading for anybody interested in the subject.
Jo Setters
Erika Carlsson
Alesa Esmond
Ada m Landsman
Stephen Lee
Joshua Mendelsohn
Mette Østergaard
London
May 2006
THE FRENCH SOCIAL MODEL IN TIMES OF
GLOBALISATION
Riccardo Brizzi
The 29th May 2005 took the lid off Pandora’s Box and out of it has
come the deep-seated fears of a France with an identity crisis, barely able
to recognise itself. 1 Used to the grandiose venture, the country is all at
once devoid of ideas, incapable of acting at a critical moment of history
when relations with the United States are at low ebb and Europe lies in
deadlock. Concomitantly, terrorism has raised its head once more and new
powers have pushed themselves onto the international scene demanding
the political and economic status that their demographic weight would
seem to warrant. France, then, is ill at ease, questioning itself and
increasingly doubtful. A nation that has always proudly stood as an
example to others, traditionally an exporter of ideas and values, now
realises it is condemned to look outside its own borders to learn a few
recipes from others outside the Francophone world - a realisation at odds
with Chirac’s proud remarks on the superiority of ‘French cuisine.’ 2
1.
ANXIOUS GLANCES ACROSS THE CHANNEL: ANY ALTERNATIVES TO
THE ANGLO -S AXON MODEL ?
Eyes are being turned primarily across the English Channel. Suddenly,
Blair has become omnipresent in the French political chatter, and
especially inside the ragbag gauche. Coming to power neck and neck with
‡
Contact with questions/comments: ricbrizzi@yahoo.it.
Jacques Julliard, Le Malheur français (Paris: Flammarion, 2005).
2
An expression ineptly used by Chirac just before allocation of the Olympics 2012 as
he was boasting of the alleged superiority of France over England.
1
INTERNATIONAL PUBLIC POLICY REVIEW , vol. 2, no. 1 (May 2006): 5-12. [ ISSN 1748-5207]
© 2006 by The School of Public Policy, University College London, London, United Kingdom. All rights
reserved.
4
VOL. 2 ,
NO.
1 — MAY 2 0 0 6
5
Jospin in 1997, the Labour leader has been eyed suspiciously in France,
though European socialism might have welcomed the man who ended the
seemingly absolute reign of accursed Torydom. With nearly ten years of
his leadership, the exponent of the ‘Third Way’, who has faced much
criticism from within his own party, has nonetheless come to stand as an
inevitable reference point wherever Frenchmen are concerned. Whether
these debates happen to be over globalisation, Europe or the social model,
the spectre of Blair has always been tangible. While he is still seen as
peddling too liberal a model – suspect, therefore 3 - and none of his
countless faults are overlooked (including failure to waive the ‘British
cheque’), it is coming to be admitted that the man’s dynamism and the
results he has achieved can no longer be ignored. British hostility to the
text was cited by many ‘yes’ supporters to bolster their own position;
though few later blamed the British leader when it was found that business
could not ‘continue as usual’ after France and the Netherlands had passed
their sentence without appeal. A sudden and surprising convergence of
views seems to have made Blair the new European leader – though the
distinct absence of alternatives counts for more than any whole-hearted
acceptance of his reform plans.
There are cases, found beyond the French frontier too, of Blair’s
proposed model being rejected as some kind of ‘hallowing’ of economics;
that this upstages the institutional and constitutional axis of the European
Union and would lead to the “definitive scrapping of the European
political project” as envisaged and worked for in previous decades.4 For
instance, the ex-secretary of Force Ouvrière, Marc Blondel, recently
wrote that France should not be busying itself with accounts and deficits;
that what is needed is “less pragmatism and more ideology.”5 However,
one might respectfully point out that, though heavily skewed by the
allowance for the CAP, the European budget (which the ‘Sapir report’ 6
dubbed ‘a historical relic’ in 2003,) has been by no means a futile
dissection of technicalities, but the working out of a proper political
programme as a guideline for Union policy over the next seven years.
Likewise, opening up a serious discussion of the European social model
hardly deprives Europe from its influential position as a political
institution, but is the only way to letting it find an answer to the
challenges being forced on it by today’s world. It was thus Blair’s 1st July
statement, one week before his opening address as British president of the
Union, spelling out the need to revise a ‘social model’ that tolerates
3
Christian Julienne, Le diable est-il liberal? (Paris: Belles Lettres, 2001).
Gian Enrico Rusconi, "Se cessiamo di essere Europa," Il Mulino 4 (2005): 617-618.
5
Marc Blondel, "Le système français est le plus juste que je connaisse," Le Point 1718
(2005): 50.
6
André Sapir, ed., Europa, un’agenda per la crescita. Rapporto Sapir (Bologna: il
Mulino, 2004).
4
6
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
twenty million unemployed, which turned the Labour leader into a
protagonist of the debate preoccupying the French over the last year.
And to be honest, if compared to the hapless French model, the
Anglo-Saxon way cannot be denied a measure of success. The economic
pointers are set fair: good growth, low unemployment index, and high per
capita mean income. For all its undoubted distortions, Thatcherism left a
heritage of flexible income and employment conditions well suited to a
monetarist policy (the rigidity of monetarism needs flexible
accompanying social conditions). In the ‘Euro zone’, currency at once
became a ‘sacred cow’ raised to some meta-political plane, and the clearest
proof of this is that national governments can no longer play with deficits
in the balance. Such monetary rigidity, almost of necessity, calls for a
flexible variable on the side of employment and incomes.7 If one opts for
a right-wing economic policy, it ought to be flanked by a right-wing
‘social’ structure (it is worth noting that, in the last five years Great
Britain has doubled its public outlay on education and transport, and
increased its health budget by two thirds). In the Euro area, by contrast, we
have a contradiction which is laying bare all its limitations: on the one
hand, we have opted for the tightest of economic policies, left in the
hands of a central European bank that enjoys total independence; on the
other hand, we have kept up a level of social protection which refuses to
come into line with the standards required by flexibility. The Union thus
contains inside it a strange sort of ‘hybrid’: a ‘right-wing’ economic policy
and a ‘left-wing’ social structure. If that is possible when there are enough
resources to go round, it is not so in times of international recession; the
inevitable result is increasing stagnation and unemployment.
2.
THE END OF THE ‘DELORS MORTGAGE ’ AND THE FRENCH
IDEOLOGICAL DESERT
If France wishes to return to a leading role in Europe, as was argued in
a long editorial in Le Monde by Jean-Marie Colombani,8 it must start by
regaining legitimacy in the eyes of its own citizens. It is no accident that
the heated referendum debate is still being waged in a ‘domestic’ version,
mirroring the positions that crystallised on 29th May, but shifting the
object of debate from the European to the French social model, which is
the main ‘arraignee’ in today’s crisis. Designed to accompany the rebuilding and expansion of the Trente Glorieuses and never seriously
reformed, the French model proved unable to accommodate the crisis of
the Seventies and Eighties, let alone the new challenges of globalisation. If
7
Jean-Marc Ferry, "Face à la crise, quelles perspectives pour l’Union européenne?"
Politique etrangère, 3 (2005): 511-522.
8
Le Monde, "La France à son rang", September 13, 2005.
VOL. 2 ,
NO.
1 — MAY 2 0 0 6
7
it worked in the form of an adjunct to the original ‘mixed’ French system
of several decades back, it has failed to respond amid the global and
financial capitalism typical of this first sliver of the twenty-first century.
It has been some time since this subject occupied the centre of political
attention: we would have to go back to the end of the Seventies, at least,
just before the rise of Mitterand in 1981, when it was last a real pivot of
the debate. First the social-democrat watershed of 1983, and then a series
of swings and alliances gradually sucked it dry of interest, until it returned
to the scene in a leading part with the European referendum.
The one clear starting point, and the only clear issue in a welter of
confused arguments, seems to be the end of the ‘Delors mortgage’ on
French political life: the demise of what the philosopher A.M. Rieu has
dubbed “the delusion that has prevailed, to left and right, over French
political and social life ever since the late Seventies.”9 The same argument
has been voiced on the other side of the Atlantic by the political analyst
B.E. Barber in The American Prospect.10 Arising in the wake of the great
energy crisis, the Delors ‘delusion’ rested on the conviction that the
domestic markets should progressively unify to the point of achieving a
sole currency, with all other arguments shelved for future consideration.
His basic assumption was that the European peoples, French more than
any, would not accept growing integration of their economic systems
unless existing social policies were defended. However, contrary to those
predictions, this has actually proved to be a trap, slowing down social and
political harmonisation across the continent and giving rise to a sole
market far in advance of the political and social systems that have in this
way been shielded from all reform. Dissociating economics from politics
and social planning has produced a backlog that can only be made good by
thorough reform within each country’s national social system.
The withering away of the ‘Delors mortgage’ model has not been
accompanied by any alternative proposal. Even to set up a debate becomes
difficult now that the traditional political and ideological categories for
understanding the French political scene have suddenly collapsed. Political
practice at an institutional level both contradicts orthodox Gaullism,
which intended a popularly elected President of the Republic to keep the
French united, and goes counter to political science, which forecast that
presidential elections plus a two-tier uninominal general election would
provide France with a two-party system on British lines. Meanwhile,
ideologically the recent chapter of ‘political traumas’ has made
Rosanvallon, 11 Julliard and Furet’s theory of the gradually arising French
9
Le Monde, "Reconstruire l’Europe au-delà du oui et du non", September 7, 2005.
Benjamin R. Barber, "Dreamers Without Borders," The American Prospect, 8
(2005).
11
Pierre Rosanvallon, Le modèle politique français. La société civile contre le
jacobinisme de 1789 à nos jours (Paris: Le Seuil, 2004).
10
8
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
‘democracy of equilibrium’12 less and less serviceable. In this light, the
‘No’ at the referendum had a destructive effect and tended to suggest a
relapse of ‘French fever.’ 13 For although the 21st April 2002 sounded as
an alarm bell, it was at least the outcome of a series of individual decisions,
few of which intended to bring about the collective result of dismissing
Jospin and favouring Le Pen, the 29th May 2005 came at the end of long
and heated nationwide debate, by contrast, and was the fruit of a long
collective rumination, not the fleeting whim of the individual.
3.
THE CULTURAL MORTGAGE OF ‘SOCIAL STATE- ISM’ OF A
GLOBALISED FRANCE
Another age-old tandem that seems to have bitten the dust is Siegfried
and Goguel’s movement-résistance, proposed as an explanation of political
developments since the Revolution. 14 The erruption of globalisation onto
the French debating ground has confounded the traditional parameters of
political life, making it hard to detect where party identities start and stop
and leading to a rift that runs right through the traditional political
families, dividing those in favour from those against globalisation.
The last election campaign showed how, at least in social terms, the
banner of conservatism has passed into the hands of the left wing, and the
radicals in particular, who staked everything on defending and preserving
social acquisitions. Take their ideas, their parties or their leaders, the
image of the moderate right and left wing as they seek allies within the
uninominal system, leaves an impression of chaos and in-fighting:
ideological (rather than electoral) pressure from the extremities, rivalry
between formations at the centre, difficulties within the dominant parties
(the UMP on the right and the PS on the left) riddled with splinter groups,
forced to seek allies and unsure about its leadership.
The cultural mortgage of ‘social state-ism’ has had a deep effect on
the two main moderate parties, the UMP and the UDF, whose liberalist
exponents seem only now to be emerging from a long silence and gaining a
hearing via that ‘great anomaly’ of French politics, Nicolas Sarkozy, who
has recently denounced that the French right has long been ‘under a
complex,’ culpably ‘going along with left-wing standard thinking.’ 15
Simplifying somewhat, there are two movements in the French right wing:
the liberals who favour decentralisation under Sarkozy’s lead, and the
12
François Furet et al., La République du centre: la fin de l'exception française (Paris:
Calmann-Lévy, 1988).
13
Michel Winock, La Fièvre hexagonale: les grandes crises politiques de 1871 à
1968 (Paris: Calmann-Lévy, 1986).
14
André Siegfried, Tableau des partis en France (Paris: Bernard Grasset, 1930) and
François Goguel, Le régime politique français (Paris: Editions du Seuil, 1955).
15
La Croix, "Villepin et Sarkozy, deux visions de la France", September 21, 2005.
VOL. 2 ,
NO.
1 — MAY 2 0 0 6
9
‘humanistes’ or ‘social’ current under Villepin, who has received President
Chirac’s official blessing, a gesture designed to discredit the renegade
dauphin and block the idea of ‘French-style Blairism.’ 16
In the opposite political camp the socialists weakened by the
difficulty of taking a stand on foreign policy in the face of Chirac’s
impeccable Iraqi dossier, imploded during the referendum campaign and
divided over the social issue, above all. Unlike the days of Mitterand, when
communists and socialists converged on a position of reformist equilibrium
à la Mendès France and Keynes, the left now shows signs of out-and-out
continental drift. Inside the socialist galaxy, split in two by the
referendum, the frictions of the past are coming to a head; the age-old
conflict is surfacing between the two ‘souls,’ reformist and hard-line. Right
from the times of Jaurès and Guesde, this cropped up at regular intervals
throughout the twentieth century: witness Blum against Déat and Faure
between the wars, Mayer versus Mollet in 1945, Rocard against Mitterand
at the end of the Seventies.17 It is still there to this day, as if reformism
hankers after social-democrat ideals and internationalism, while the hardline is grounded on a singular mixture of class struggle and nationalism.
The weak pact signed by the different socialist wings in Le Mans couldn’t
hide that the conference (18-20 November 2005) turned into yet another
round of score settling within the party, with an eye on the presidential.
History seems to be repeating itself with the showdown between Hollande
and Fabius, yet there is a historical difference. It concerns the fact that
socialist in-fighting in the past have always hinged on diverging views of
politics, whereas now they are divided in their lack of ideas. In an attempt
to escape from the European trend, through which social democracy 18 is
sliding to a position indistinguishable from the right, the archipelago of
the French gauche is asphyxiating in self-imposed inaction. The unions
doggedly criticise the French weaknesses and block all reform; the ultraleft dreams of halting globalisation, controlling the market and living
better while working less; and the reformists will not resign themselves to
Blairism, but cannot come up with alternatives.
Voting ‘No’ was beckoned as an option for those unconcerned with
future implications; it was likened to a basket gathering all the protest
generated by politics and how society is being run. France is not a tiny
village of Gauls besieged by Muslim or liberalist legions. The ‘No’ was a
gesture of refusal that packed little punch, not just because the Euro16
438.
17
Duo Caroli, "Deux clés pour la politique française", Commentaire, 110 (2005):
For deeper treatment see Claude Estier, Un combat centenaire: 1905-2005 :
histoire des socialistes français (Paris: Le Cherche Midi, 2005).
18
Pascal Delwit, Où va la socialdémocratie européenne? (Bruxelles: Editions de
l’Université de Bruxelles, 2004).
10
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
sceptics lacked the means to assuage the heartache they caused, but also
because it turned France into an onlooker. That was the worst service the
country could be rendered at a time when globalisation is calling for new
strategies of collective security in the economic, social and strategic fields.
The run-up to the presidential election, apart from the inevitable clash of
propaganda, will offer little chance of opening up a real liberal alternative
in a country, which has transformed a tradition more inclined to
governmentalism than nationalism into the ‘great anti-liberal power in the
European Union.’ 19 If France refuses to follow the British way, sacrificing
all thoughts of justice and social equality in favour of the market, it must
replace the present ‘ideological desert’ by an alternative model20 able to
win support and, more importantly, get results. France needs political
proposals – something quite different from today’s line-up, which looks at
the future in fear and pessimism, and thus opens doors to the politics of
resentment and anxiety. For a nation that claims to have roots in the
French Revolution – a truly universal event – the planetary provincialism
into which it is slowly sinking seems unpardonable nonsense.
REFERENCES
Bitterlich, Joachim. France – Allemagne: mission impossible? Comment
relancer la construction européenne. Paris: Albin Michel, 2005.
Blondel, Marc. "Le système français est le plus juste que je connaisse," Le
Point 1718 (2005): 50.
Caroli, Duo. " Deux clés pour la politique française," Commentaire 110
(2005): 438.
Delwit, Pascal. Où va la socialdémocratie européenne? Bruxelles:
Editions de l’Université de Bruxelles, 2004.
Estier, Claude. Un co mbat centenaire: 1905-2005: histoire des socialistes
français. Paris: Le Cherche Midi, 2005.
Ferry, Jean-Marc. "Face à la crise, quelles perspectives pour l’Union
européenne?" Politique etrangère, 3 (2005): 511-522.
Furet, François, Jacques Julliard, Pierre Rosanvallon. La République du
centre: la fin de l'exception française. Paris: Calmann-Lévy, 1988.
Goguel, François. Le régime politique français. Paris: Editions du Seuil,
1955.
Julienne, Christian. Le diable est-il liberal? Paris: Belles Lettres, 2001.
Julliard, Jacques. Le Malheur français. Paris: Flammarion, 2005.
19
20
Libération, "La France, terre d’antilibéralisme", May 13, (2005).
Joachim Bitterlich, France – Allemagne: mission impossible? Comment
relancer la construction européenne (Paris: Albin Michel, 2005).
VOL. 2 ,
NO.
1 — MAY 2 0 0 6
11
La Croix, "Villepin et Sarkozy, deux visions de la France," September 21,
2005.
Le Monde, "Reconstruire l’Europe au-delà du oui et du non," September 7,
2005.
Le Monde, "La France à son rang," September 13, 2005.
Libération, "La France, terre d’antilibéralisme," May 13, 2005.
Rosanvallon, Pierre. Le modèle politique français. La société civile contre
le jacobinisme de 1789 à nos jours. Paris: Le Seuil, 2004.
Rusconi, Gian Enrico. "Se cessiamo di essere Europa," Il Mulino 4 (2005):
617-618.
Sapir, André. ed. Europa, un’agenda per la crescita. Rapporto Sapir.
Bologna: il Mulino, 2004.
Siegfried, André. Tableau des partis en France. Paris: Bernard Grasset,
1930.
Winock, Michel. La Fièvre hexagonale: les grandes crises politiques de
1871 à 1968. Paris: Calmann-Lévy, 1986.
A HOLLOW HOPELESSNESS: SHORTFALLS IN
UNI-DIMENSIONAL DEMAND FOR LAW MODELS
Jonathan Bond ‡
A BSTRACT
This essay explores and evaluates several recent efforts to conceptualise
and empirically assess the demand for law in post-Soviet transitioning
polities. After highlighting several questions which any robust model of
the demand for law must answer and identifying several alternative
conceptions of the demand for law developed in the economics literature,
the essay offers a theoretical critique of unidimensional rational-choice
demand for law models, such as that recently developed by Hoff and
Stiglitz. The essay concludes that despite the many insights they can
provide regarding the collective action problems which inhere in the
establishment of stable legal orders in transitioning economies,
unidimensional rational-choice models are incapable, for a variety of
reasons, of accurately portraying the dynamic process by which demand
for law develops in a society; consequently, it is argued that the rather
bleak predictions such models yield of the prospects for legal develop ment
in transitioning societies should not be accepted at face value.
Keywords: demand for law; economic transition; post-Soviet transition;
legal transition; rule of law
Since the earliest days of the post-Soviet economic and political
transition in the Commonwealth of Independent States (CIS), much of
‡
M.Sc. (International Public Policy), School of Public Policy, University College
London; Contact with questions/comments: jonathan@jonathancbond.com.
INTERNATIONAL PUBLIC POLICY REVIEW , vol. 2, no. 1 (May 2006): 12-24. [ ISSN 1748-5207]
© 2006 by The School of Public Policy, University College London, London, United Kingdom. All rights
reserved.
12
VOL. 2 ,
NO.
1 — MAY 2 0 0 6
13
Central and Eastern Europe (CEE), and elsewhere, considerable attention
has been paid to the importance of legal institutions and frameworks as
determinants of economic growth and socio-political stability. 1 At least
two factors account for this interest among both economists and legal
scholars. First, both students of law and political science, already
convinced of the importance of the rule of law as a determinant of
economic progress, may find in the transition experiences of CIS and CEE
countries evidence to support their basic supposition. Second, the
“windows of opportunity,” in Kingdon’s language, created by the
tumultuous ground-clearing movements which marked the beginning of
transition provided, for both scholars and policymakers alike, a unique
laboratory in which to experiment with institutional design.2 Such
experiments, comprised of both successes and failures, have provided for
tremendously fertile ground with regards to retrospective commentary and
analysis.
Whatever their reasons for devoting attention to this issue, scholars
from both the legal and economics disciplines have arrived at several
important points of consensus, yet there remain a number of apparent
disagreements. That the ‘rule of law’ is in some way very important for
economic expansion and development to occur, both in the post-Soviet
transition context and in general terms, is not disputed.3 Moreover,
scholars appear to agree that while the stock, quality, and enforcement of
laws in transitioning countries have all increased (on average), the rule of
law in these states remains by some measure insufficient. 4 The literature
reaches a crossroads of sorts, however, when scholars take on the question
of what is responsible for this deficiency in the rule of law. In the last five
1
Hoff, K., and J.E. Stiglitz, “After the Big Bang? Obstacles to the emergence of the
rule of law in post-communist societies.” American Economic Review 94(3), June 2004:
753-763.
2
Hoff and Stiglitz, “After the Big Bang?”
3
D. North, Structure and Change in Economic History, (New York: Norton, 1981);
R. La Porta, F. Lopez-de-Silanes, A. Shleifer, and R. Vishny, “Legal Determinants of
External Finance,” Journal of Finance 52 (1997): 1131–1150; R. La Porta, F. Lopez-deSilanes, A. Shleifer, and R. Vishny, “Law and Finance,” Journal of Political Economy
106, no. 6 (1998): 1113– 1155; R. Barro, Determinants of Economic Growth: A CrossCountry Empirical Study (Cambridge: MIT Press, 1997); Boettke, P.J. and J.R. Subrick,
“Rule of Law, Development, and Human Capabilities,” Supreme Court Economic Review
10 (2002): 109-126; European Bank for Reconstruction and Development, Law in
Transition 2004: Competition Law and Policy (London: EBRD General Counsel, 2004).
4
K. Hendley, “Rewriting the Rules of the Game in Russia: the Neglected Issue of the
Demand for Law,” East European Constitutional Review 8, no. 4 (1999)
http://www.law.nyu.edu/eecr/; A. Sajo, “The Law of Liposuction,” East European
Constitutional Review 8, no. 4(Fall 1999) http://www.law.nyu.edu/eecr/; K. Pistor,
“Supply and Demand for Law in Russia,” East European Constitutional Review 8 no. 4
(Fall 1999) http://www.law.nyu.edu/eecr/; K. Pistor, The Demand for Constitutional Law,
Constitutional Political Economy 13 (2002): 73-87.
14
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
years in particular, the debate has turned to the question of why a
constituency demanding the rule of law did not develop as expected after
the initial tumultuous years of cataclysmic transition—what scholars have
since identified as the ‘Big Bang’. 5
The aim of this essay is to explore and evaluate this debate regarding
the determinants of the demand for law in countries undergoing economic
transition. After highlighting several definitional and conceptual issues
that underlie the issue, the paper offers a structure for understanding the
disagreement within the literature concerning the causes of insufficient
demand for the rule of law in transitioning economies. While rational
choice and game-theoretic demand-for-law models—like that espoused by
Hoff and Stiglitz—can yield important insights concerning collective
action problems and other barriers to legal transition, such analyses are
often incomplete and even misleading. Specifically, it is argued here that
such models both overlook the roots of public perceptions of the law and
overemphasise the role of a certain set of actors, behaviours, motivations,
and institutions at the expense of others.
Before addressing the specific factors underlying the deficiency in the
demand for law, several conceptual matters must first be addressed. In
essence, any study attempting to discover the root causes concerning an
insufficient demand for the rule of law must first begin by answering
several questions. If overlooked, it will lead to confusion in understanding
the terms of the current debate. An investigation must first define what it
understands ‘law’ to mean. Law as a concept can undoubtedly be
considered at many levels of analysis, and yet there are bounds on what
‘law’ includes. For instance, ‘law’ is arguably narrower than the sum of all
the actors and institutions that comprise “governance,” yet it is clearly
broader than merely the written statutes passed by a country’s national
legislature.6 ,7 A definition of law must also address the functional role of
law.8 Moreover, such a definition must also identify how it takes account
5
Hendley, Hoff and Stiglitz, “After the Big Bang?”
D. Kaufmann, A. Kraay, and P. Zoida-Lobaton, “Governance Matters, ”The World
Bank Development Research Group and World Bank Institute Policy Research Working
Paper 2196, October 1999; A. Aslund, ”Law in Russia,” East European Constitutional
Review 8, no. 4 (Fall 1999), http://www.law.nyu.edu/eecr/.
7
It is similarly important to ask to what degree a study perceives a system of law as
consisting of “primary” and “secondary” rules, to borrow the language of H.L.A. Hart
(1997). That is to say, it must be asked whether a given study takes account of the
distinction between the ‘ordinary’ concrete laws (viz. primary rules) which mandate or
constrain behaviour by citizens, businesses, and other private entities, and the
overarching rules of law (viz. secondary rules) which stipulate (1) the criteria by which
law is recognised as legitimate, binding laws, (2) the procedures by which laws can be
changed, and (3) the methods by which law is properly interpreted an applied.
8
That is to ask, for example, is law perceived primarily as a tool to protect private
property from intrusions by other private citizens, to protect citizens and enterprises from
arbitrary intrusions and interference by the state, or both ?
6
VOL. 2 ,
NO.
1 — MAY 2 0 0 6
15
of the informal practices that may be both complementary or
substitutionary vis-à-vis formal legal mechanisms. In essence, it must be
recognised that the formal apparatuses for the determination and
protection of property rights represent only some of the many
alternatives available to individuals and entrepreneurs.9
A second question is what the study assumes about the ‘ideal’
provision of law. In other words, for the demand for law in a given
country and time to be judged ‘deficient’, this degree of demand must
yield, relative to some ideal target, some suboptimal level and/or type of
legal framework. To this end, some suggest that the mere dominance of
formal institutions of rights protection indicates that the rule of law is
sufficiently present, while others insist that it is not merely a quantity or
degree of legal protections which (insufficient) demand has failed to call
into being, but particular laws which adhere to some “principles of natural
justice.”10 ,11
A final question that all studies of the demand for law must answer is
why the perceived shortfalls in the observed ‘rule of law’ should be
perceived as a deficiency in demand at all. That is to say, while in the last
five years there has been growing agreement that the problem is a function
of insufficient demand, there is no clear consensus regarding why law
should be considered as a problem of demand. This occurs due to different
understandings of what the ‘demand’ for law actually is. For some,
including Hoff and Stiglitz, the demand for law is reflected in political
terms—whether through voting or indirect, informal political influence—
and thus insufficient demand for law means simply that too few voting
actors prefer to be bound by a legal regime in order for the rule of law to
take hold.
For others such as Pistor, however, demand for law is manifested in
the economic activities and behaviours of economic actors who willingly
allowing their transactions to be governed by the rule of law. This matters
9
In other words, given a certain set of incentives, it is presumed that firm managers,
for instance, will choose what appears ex ante as the optimal combination of private and
public provision of rights protection instruments. This may seem an obvious point, but
the relationships (whether substitutionary or complementary) between these various
alternatives available to economic actors are easily overlooked, even by otherwise robust
analyses.
10
G. O’Donnell, “Polyarchies and the (un) Rule of Law in Latin America: a Partial
Conclusion” in The (un) Rule of Law and the Underprivileged in Latin America ed. J.E.
Mendez, G. O’Donnell, and P.S. Pinheiro, 317 (Notre Dame: University of Notre Dame
Press).
11
Once the content of the ‘ideal’ system of law is considered, attention must also be
paid to the origin from which the substance and/or structure of the law emanates (La Porta,
“ Legal Determinants of External Finance,” “Law and Finance”; Berkowitz, Pistor and
Richard, “Economic Development, Legality and the Transplant Effect”; Berkowitz, Pistor
and Richard, “The Transplant Effect”). This issue is discussed in greater detail below.
16
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
because “no state controls sufficient resources to ensure legal compliance
by means of coercion only,” and thus, “every formal legal system
therefore relies heavily on voluntary compliance.” 12 Therefore, if the law
is to have any wide-reaching effect, it must begin with economic actors
themselves preferring to be bound by the law because it is in their
interest. 13 ,14
The foregoing conceptual questions obviously deserve a much more
thorough treatment, but this is outside the scope of the current paper.
Instead, having merely highlighted these difficulties and their importance,
the factors identified in the literature as contributing to insufficient
demand for law must now be considered. To accomplish this, the paper will
first offer a summary and critique of a recent representative study by Hoff
and Stiglitz, and second will show how the rest of the literature would
respond to both the insights and oversights of the Hoff and Stiglitz
analysis.
The recent work of Hoff and Stiglitz15 applies a game-theoretic
framework to managers of private firms in Russia to answer the question
of why the immense constituency demanding the rule of law promised by
advocates of rapid privatisation did not in fact materialise in the years
after Russia formally began its transition to democracy in 1991. The
model is built around a single type of economic actor—firm managers—
presumed to be comparatively equal in influence and resources.16 Each
12
It is here that the potential for informal practices, that are complementary to, rather
than simple substitutes for, formal legal mechanisms, begins to become apparent. Once a
credible, predictable legal system develops, informal practices (such as pre-trial settlement)
will develop, which will efficiently resolve many, if not most, disputes which would
otherwise be litigated. These systems are complementary because the result they achieve is
likely to reflect closely the results the parties expect were they to pursue the matter
through trial. As Pistor (1999) notes, several recent symposia in American law journals
have insightfully addressed the importance and (complementary and substitutionary) roles
of informal legal practices. See scholarly symposia at: Wisconsin Law Review vol. 375, no.
3 (1997), University of Pennsylvania Law Review 144, no. 5 (1996), and Cornell Law
Review 82, no. 5 (1997).
13
Pistor, “The Demand for Constitutional Law”, 74.
14
As is already evident, then, the debate is not about whether actors accept the rule of
law because it is in their interest in their own judgment. Rather, what divides the threads
in the literature, inter alia, is the view they take of which actors and which of those
actors’ behaviours are fundamentally responsible for the rule of law taking root.
15
The work which is the subject of their 2004 paper was originally presented at a
World Bank conference on 11 April 2002 before being presented to (and published by) the
American Economic Association in 2003.
16
As Hoff and Stiglitz make clear in “Obstacles to the Emergence of the Rule of
Law in Post-communist Societies,” their model is intentionally designed to parallel a sort
of political competitive market model, where none of the actors is disproportionately
powerful and thus none has a reason to foresee his/her own actions as dramatically
affecting the conditions faced by or actions taken by others. However, why they choose to
design their model this way, focusing on what they estimate to be 250,000 firm managers,
VOL. 2 ,
NO.
1 — MAY 2 0 0 6
17
manager must choose, in every time period, first whether he/she will either
build value or strip assets from his/her firm, and second whether he/she will
politically support or oppose the rule of law. Each of these decisions is a
function of the manager’s ‘ability’ to strip assets from his/her firm, 17 and
his/her expectation that the rule of law will or will not come into force
before the next round of the game. Additionally, the manager’s payoffs
are artificially weighted in the model such that building value with the
firm’s assets is preferable when the rule of law is present.
From this simple model, Hoff and Stiglitz claim to show that
managers are likely to not support the rule of law, largely because they fail
to take account of how their economic and political choices affect others.
In short, there are externalities to the build/strip decision, but more
importantly, “the political environment is…a public good (or public
bad).”18 Thus, they conclude, the notion that privatisation can create a
constituency that will demand law and order is fundamentally flawed.
Its contribution and insights aside, this model is useful because
simply by listing several of its potential oversights and missteps, one can
identify the main positions put forward by alternative theories of deficient
demand for law. The most significant flaws in Hoff’s and Stiglitz’s model
fit into three broad categories: their conception of law, their identification
of relevant actors and their actions which are deemed pertinent, and their
implicit concept of an ‘ideal law’ towards which society should aim. Each
of these major issues will be briefly addressed, followed by several minor
difficulties the model faces.
First, the Hoff and Stiglitz model conceptualises law as a unidimensional, even binary variable, which matters for several reasons. That
law is actually neither uni-dimensional nor binary is self-evident: as was
alluded to above. Wherever law is found, it varies both in degree, in
complexity, and in content. Even if one sets aside the crucial Hartian
distinction between primary and secondary rules of law, for instance, and
assumes that law can either be present as a unit or wholly absent, one is
still forced to consider the informal dimensions and extensions of the rule
of law—whether as complements or substitutes for formal mechanisms.
Second, the model presumes that the most important actors to
consider are a particular subset of economic actors—the managers—but at
the same time that the primary determinant of the rule of law’s
as opposed to perhaps a dozen oligarchs whom they acknowledge to have actually
exercised considerable influence from the ‘Big Bang’ forward, is unclear.
17
Hoff and Stiglitz, “After the Big Bang? Obstacles to the emergence of the rule of
law in post-communist societies,” are also unclear about whether this ability is a natural
trait of the manager or also includes some measure of the manager’s enterprise context. That
is, they do not seem to account for the degree to which the manager is in an industry and/or
firm where assets are easier and/or more profitable to strip.
18
Hendley, Hoff and Stiglitz, “After the Big Bang?”. 757.
18
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
establishment is the political behaviour of these actors (i.e. their ‘voting’
preferences). While observers can debate which particular actor or
behaviour is most important, it seems clearly wrong to study a mismatched
pair of actor and action. 19 Undoubtedly, a collective action problem can be
perceived in the decisions such managers faced in the immediate aftermath
of the tumultuous initial stage of transition. This problem does not centre,
however, on their political (i.e. voting) decisions, but rather on economic
behaviour. 20 To be fair, the Hoff and Stiglitz model does deliberately
attempt to take account of the effects of economic decisions on the future
establishment of a legal framework, but the way in which it does so reflects
a peculiar, ultimately unsound understanding of how law comes to be
established.
Finally, the model seems to take for granted that a known ideal target
for the development of the rule of law exists, although the content and
attributes of this target are never clearly identified. The oversimplified
conception of law on which the model is based may well account for this
flaw in part. To some, it might have seemed obvious which fundamental
direction political reforms should follow—away from the hallmarks of the
Soviet regime—in the wake of such major shocks as those experienced in
1991. Even if this were the case, there remained considerable uncertainty
and discord over how far these reforms should go, as well as how strong a
new formal legal framework should be established once the turbulence
settled.
Aside from these major flaws, several additional shortcomings warrant
brief mention. First, the actors are presumed to be incapable of
communicating with one another, likely for the sake of fitting the
scenario into a simple game-theoretic framework, and yet there is no
reason this must necessarily be so. Second, Hoff and Stiglitz claim their
model provides a refutation of the thesis that rapid privatisation cultivates
the demand for law, but their model actually takes no account of the rate
19
That is to say, one might rightly disagree with Hoff’s and Stiglitz’s choice to
exclude altogether the various political officials and administrators who are involved in
the establishment of law, but this is a more subtle issue. What is more obviously wrong
with the Hoff and Stiglitz analysis is that it focuses on actors whose political influence is,
by Hoff’s and Stiglitz’s own stipulation, minimal at the individual level, and yet tries to
explain the phenomenon of insufficient demand for law in terms of these actors’ political
behaviour. In short, it would make sense to study the political behaviour of a group of
actors who are politically significant (e.g. to study the voting behaviour of the public at
large, instead of a contingent of a few hundred thousand at most; alternatively, one could
study the indirect political influence of the handful of very powerful oligarchs who exerted
great power in Russian politics for much of the 1990s). What matters about the managers
is their decision to subject their own transactions to the principles and standards that the
law represents especially when the law cannot effectively detect or punish noncompliance. Thus, studying their voting decisions is comparatively irrelevant.
20
Why the voting behaviour of such a comparatively small group of actors should be
considered pivotal is never explained, incidentally.
VOL. 2 ,
NO.
1 — MAY 2 0 0 6
19
of privatisation. Instead, it seems to address more the method and
distributional result, whereby managers were able to gain such considerable
control despite the stated intentions of the privatisation plans. Third,
their analysis of the decision by managers to build value or strip assets
seems flawed in a number of ways.21 In all events, both these minor flaws
and the major shortcomings described above are not necessary
consequences of game-theoretic analysis, as similar studies of the same
topic by Sonin and Polishchuk and Savvateev reveal.22
As suggested above, a review of these arguable shortcomings is helpful
because it helps the student to see how an alternative view of why demand
for law is insufficient takes shape. For instance, a view challenging that of
Hoff and Stiglitz might conceive of law as multidimensional, complex
reality—not as a highly discrete (or even binary) variable—thus resulting
in a different notion of what the ‘ideal’ rule of law for a transitioning state
would be. Additionally, a competing model might focus on the economic
behaviours of actors—as opposed to merely their political activities and
preferences—as determining whether law comes to rule the market or not.
Indeed, this is just what one finds in examining such alternative views.
However, above and beyond these alternative assumptions, the most
important aspect of these alternative analyses of demand for law is the
role played by public perceptions of both the law itself and the state’s
administration of it. Propounded most adamantly in regard to the Russian
case by Kathryn Hendley, the argument for public perceptions of law as a
factor constraining the demand for the rule of law asserts the following: to
the ordinary citizen, or even to the entrepreneur, in a transition country
at the beginning of the ‘Big Bang’, the idea that law could be used as
anything but an instrument by which apparatchiks and other elites
exercise, preserve, and expand their power was simply untenable.
Consequently, reforms that failed to address this fundamental public
distrust of the law were doomed to failure from the start.
21
Specifically, they presume stripping assets to be detrimental, though they ignore
cases where subunits of firms are sold off or superfluous resource or capital stocks
(inherited by the firm from its predecessor under the command economy regime) are actually
beneficial. Specifically, they seem to conflate assets sales with tunneling, which is
incorrect, and they ignore firm-propping entirely (see E. Friedman, S. Johnson, and T.
Mitton, “Propping and Tunneling,”
Journal of Comparative Economics 31 (2003): 732-750). Additionally, their assumption
of a normal distribution curve reflecting stripping ability, which is in large part
responsible for the unstable and ‘bad’ equilibria their model generates, should be
questioned.
22
Sonin specifically examines the incentives accruing to property owners
considering their option to rely on informal, and not just formal, methods of rights
enforcement. Polishchuk and Savvateev attempt to study the consequences of the
privatization strategies, concluding that ineffective privatisation (meaning that managers
were able to block, tamper with, or intercept the distribution of ownership rights to the
public) plays a significant role.
20
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
This element of perception is crucial because it helps to illuminate the
context that, in part, amplifies the collective action problem that
undoubtedly did face economic actors. However, it differs from that
portrayed by Hoff and Stiglitz. First, what determines the actual
‘establishment’ of the rule of law is the voluntary actions of economic
actors to subject their dealings to the law (as opposed to their voting
behaviour). 23 Thus, in order for such actors to choose the law to govern
their own dealings, doing so must be more efficient in their view than
prior-established habits and routines or extralegal means of rights
enforcement. At the beginning of transition, and for a considerable time
thereafter, however, the transaction costs of utilising the law are made
higher in the estimation of economic actors, whether citizens or firm
managers, both by fear of their trading partners cheating and by their lack
of confidence in the impartiality, predictability, enforceability (i.e.
effectiveness), and justness of the law offered by the state.
It is these perceptual factors, as Hendley’s argument suggests and as
several respondents affirm, 24 which transform the problem of establishing
the rule of law from an ordinary collective action dilemma to a much
more complicated social and economic problem. 25 Undoubtedly a host of
attributes of the transition countries’ legal systems may contribute to this
crisis of perception, including: the legacy of the extant legal culture,
reform fatigue among voters, low quality of provision as inexperienced
institution-builders experiment with legal frameworks, and exogenous
(with respect to the legal order itself) problems with enforcement. 26 It is
these and similar factors, therefore, which are largely responsible for the
low level of demand for the rule of law.
23
In other words, law develops as those who already possess de facto ownership of
certain property seek to make the delineation and defence of their rights in that property
more efficient. As more and more actors demonstrate that law provided by the state is
efficient, more and more property owners are persuaded to entrust the protection of the de
facto ownership they already have to the guardianship of the state. By contrast, such a
system cannot turn nominal rights into de facto rights. To put it another way, it is true
that political power over the content and extent of the law is extremely important, but this
is not the case until the law has acquired de facto control over the property concerning
which it defines and protects rights. Until then, control over the law itself is meaningless
(i.e. only control over the state’s coercive apparatus would matter).
24
Pistor, “Supply and Demand for Law in Russia”; Sajo; Aslund.
25
It is worth noting that ordinary collective action constraints—a field explored
famously by Mancur Olson—would certainly apply to many or all informal (i.e. private)
mechanisms for rights protection, and yet somehow these apparatuses materialised, the
inference being that other factors, such as those Hendley and others describe, may account
for the difference.
26
E.g. the fragility of many business enterprises—many of which ought to have, and
did, go bankrupt—and perhaps also inadequate liquidity, result inter alia in the inability
of a plaintiff to obtain restitution ordered by a court, simply because the defendant firm has
insufficient assets to take (perhaps, for example, it has been funded to-date by a lingering
soft-budget constraint, but such resources are not available for legal restitution).
VOL. 2 ,
NO.
1 — MAY 2 0 0 6
21
One final factor deserves mention, addressed by Hendley but more
thoroughly in the works of Pistor, 27 as it connects the results of legal
reform with the methods employed. This issue is the degree to which legal
reformers attempt to import or transplant various aspects or whole
systems of law from well-established, stable market democracies to
transition countries, then imposing these systems in a top-down fashion.
The basic question is whether or not and under what conditions imported
or transplanted legal systems will contribute to a lower level of demand for
law to rise in importance.
Among the difficulties of the issue is that those most familiar with it
are those whose opinions of the issue are the most complicated. On the
one hand, scholars such as Hendley argue, there are many reasons to
disfavour the drafting of laws by policymakers pursuing technocratic
precision, usually closely patterned on the legal codes of prosperous and
stable democracies abroad, but without regard for how business is actually
being conducted in transition countries at the time of reform.28 Also, such
strategies of imposing effectively imported law may only contribute
further to the long-extant public perception that the law is merely a tool
of those already in power. 29 Yet on the other hand, the rule of law
reformers wish to impose, even if conceptually imported, may well be
superior to the ‘rules of the game’ with which entrepreneurs in a given
transition country are familiar. 30 It is true, to a degree, that law
transplanted into a new context must be compatible at some level with the
legal, political, and economic culture into which it is being integrated, but
how then can meaningful change ever take place?31
27
Pistor, “Supply and Demand for Law in Russia” and “The Demand for
Constitutional Law”; D. Berkowitz, K. Pistor, and J.F. Richard, “The Transplant Effect,”
American Journal of Comparative Law 51, no. 1 (2003): 163-204; K. Pistor, “Economic
Development, Legality and the Transplant Effect,” European Economic Review 47, no. 1
(2003): 165-195; C. Xu and K. Pistor, “Law Enforcement under Incomplete Law: Theory
and Evidence from Financial Market Regulation,” Columbia Law School Center for Law
and Economic Studies Working Paper 222, April 2003.
http://ssrn.com/abstract_id=396141; K. Pistor, Y. Keinan, J. Kleinheisterkamp, and M.D.
West, “Innovation in Corporate Law,” Journal of Comparative Economics 31 (2003):
676-694.
28
And thus the resulting legal codes risk being perceived as unfamiliar, and thus
inefficient and irrelevant.
29
That is to say, as Hendley argues in “Rewriting the Rules of the Game in Russia:
the Neglected Issue of the Demand for Law,” those who manipulate the legal framework to
achieve a stable market democracy through the transition process are perhaps perceived as
very similar to the prior command-economy regimes, in that they are merely using the law
to impose their policy preferences (which happen to be major political and economic
liberalization) on the rest of society. Thus, law may remain as it was, neither neutral nor
free-standing in the eyes of the public.
30
Pistor, “Supply and Demand for Law in Russia”; Aslund.
31
Pistor, “Supply and Demand for Law in Russia”; “The Demand for Constitutional
Law.”
22
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
The answer Pistor offers is insightful in tying together several of the
important issues described above. It is true that in order for law to develop,
a constituency voluntarily subjecting itself to the law is necessary. It is not
true, however, that reformers can “let loose, wait for the dust to settle,
and then respond to new demand for institution building.” 32 If they
attempt this, as was often the case, they will find insufficient demand for
the rule of law, at least law provided by the state, in part because of the
instability and very high inefficiency of the political markets at this early
and uncertain stage of transition. 33
Rather, if the state wishes the legal framework it offers to be
preferred, and thus to achieve prevalence, the state must provide clear
signals at the beginning of transition to address the initial perceptual
problems of the public. These signals, or “signposts,” of the courts
neutrality, predictability, independence, credibility, and effective
enforcement of the law are numerous, but they include cases where actors
on the macropolitical stage voluntarily bind themselves to decisions by the
courts instead of resorting to political upheaval and violent resistance to
challenges to their authority. 34 ,35 Above all, however, “some key rules
simply must be imposed from the beginning,” which can establish the
stability and credibility of the law sufficient to “elicit a critical mass of
demand for law.”36 Moreover, while some of these key rules must be
primary rules in the Hartian sense, it would seem that these should largely
consist of secondary rules—that is, those which determine what law is,
how it can be changed, and how rules are interpreted and applied—as these
are crucial in cultivating credibility and confidence in the legal order
among economic actors and the public at large.
The aim of this paper has been to shed light on a complicated and
often confusing, but highly significant, debate within the transition
literature regarding the causes of a deficient demand for law. After
portraying the most prominent threads of this literature in relation to one
32
Pistor, “Supply and Demand for Law in Russia,” n.p.
No page citations are available for Pistor (1999), nor for any other work from the
same symposium in the East European Constitutional Review, because the archived
(electronic) versions of the publication do not provide any pagination references.
34
Pistor “Supply and Demand for Law in Russia”, n.p.
35
The recent constitutional crisis in Ukraine provides a stark example: that all sides
eventually adopted even such similar rhetoric affirming the nearly unassailable prerogative
of the Supreme Court is not to be viewed as a sign that the rule of law reigns supreme in
Ukraine (though the progress in recent years is noteworthy), but rather the event will
almost certainly serve as a signal to actors in the future, and thus is more a part of the
process of establishing the rule of law, rather than an indicator of success to-date. In
Pistor’s (1999, n.p.) language, “The credibility of the legal system stands or falls with the
respect paid to it by those in power. This is a political rather than a technical issue.” Thus
“ even a few cases of effective law enforcement would have sent an important signal.”
36
Pistor “Supply and Demand for Law in Russia”, n.p.
33
VOL. 2 ,
NO.
1 — MAY 2 0 0 6
23
another and with respect to important conceptual questions, it has been
argued that some analyses, such as the game-theoretic framework
employed by Hoff and Stiglit, are both useful and misleading. In order to
understand the demand for law (and what leads to an insufficiency), it is
necessary to turn to a broader array of issues, especially perceptions of the
law held by the citizenry, the importance of which is reinforced by the
same conceptual issues described above.
REFERENCES
Aslund, A. ”Law in Russia.” East European Constitutional Review 8, no. 4
(Fall 1999). http://www.law.nyu.edu/eecr/
Barro, R. Determinants of Econo mic Growth: A Cross-Country Empirical
Study. Cambridge: MIT Press, 1997.
Berkowitz, D., K. Pistor, and J.F. Richard. “ The Transplant Effect.”
American Journal of Comparative Law 51, no. 1 (2003): 163-204.
———. “Economic Development, Legality and the Transplant Effect.”
European Econo mic Review 47, no. 1 (2003): 165-195.
Boettke, P.J. and J.R. Subrick. “Rule of Law, Development, and Human
Capabilities.” Supreme Court Economic Review 10 (2002): 109-126.
European Bank for Reconstruction and Development. Law in
Transition 2004: Competition Law and Policy. London: EBRD
General Counsel, 2004.
Friedman, E., S. Johnson, and T. Mitton. “Propping and Tunneling.”
Journal of Comparative Economics 31 (2003): 732-750.
Hart, H.L.A. The Concept of Law, 2 nd ed. Oxford: Oxford Univ. Press.,
1997.
Hellman, J.S., G. Jones, and D. Kaufmann. Seize the State, Seize the
Day: State Capture and Influence in Transition Economies. Journal
of Comparative Eocnomics 31 (2003): 751-753.
Hendley, K. “Rewriting the Rules of the Game in Russia: the Neglected
Issue of the Demand for Law.” East European Constitutional Review
8, no. 4 (1999). http://www.law.nyu.edu/eecr/
Hoff, K., and J.E. Stiglitz. “Obstacles to the Emergence of the Rule of
Law in Post-communist Societies.” Paper presented at the World
Bank 11 April 2004, 2002.
http://info.worldbank.org/etools/bspan/PresentationView.asp?PID=28
5&EID=136
———. “After the Big Bang? Obstacles to the emergence of the rule of
law in post-communist societies,” American Econo mic Review 94, no.
3 (2004): 753-763.
Kaufmann, D., A. Kraay, and P. Zoida-Lobaton. “Governance Matters.”
24
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
The World Bank Development Research Group and World Bank
Institute Policy Research Working Paper 2196, October 1999.
Kingdon, J.W. Agendas, Alternatives, and Public Policies, 2 nd ed. New
York: Harper Collins, 1995.
La Porta, R., F. Lopez-de-Silanes, A. Shleifer, and R. Vishny. “Legal
Determinants of External Finance.” Journal of Finance 52 (1997):
1131–1150.
———. Law and Finance. Journal of Political Economy 106, no. 6
(1998): 1113– 1155.
North, D. Structure and Change in Economic History. Norton, New
York, 1981.
O’Donnell G. 1999. “Polyarchies and the (un) Rule of Law in Latin
America: a Partial Conclusion.” InThe (un) Rule of Law and the
Underprivileged in Latin America, edited by Mendez, J.E., G.
O’Donnell, and P.S. Pinheiro, 303-37. Notre Dame: University of Notre
Dame Press.
Olson, M. The Logic of Collective Action. Cambridge, MA: Harvard
Univ. Press., 1971.
Pistor, K. “Supply and Demand for Contract Enforcement in Russia:
Courts, Arbitration, and Private Enforcement.” Review of Central and
East European Law 22, no. 1 (1996): 55– 87.
———. Supply and Demand for Law in Russia. East European
Constitutional Review 8, no. 4 (Fall 1999).
http://www.law.nyu.edu/eecr/
———. The Demand for Constitutional Law. Constitutional Political
Economy 13 (2002): 73-87.
Pistor, K., Y. Keinan, J. Kleinheisterkamp, and M.D West. “Innovation
in Corporate Law.” Journal of Comparative Economics 31 (2003):
676-694.
Pistor, K., M. Raiser, and S. Gelfer, S. “Law and Finance in Transition
Economies.” The Economics of Transition 8, no. 2 (2000): 325–368.
Polinsky, A.M. and S. Shavell, S. “The Economic Theory of Public
Enforcement of Law.” National Bureau of Economic Research
Working Paper 6993, March 1999.
Polishchuk, L. and A. Savvateev. “Spontaneous (non) Emergence of
Property Rights.” Center for Institutional Reform and the Informal
Sector Working Paper 241, January 2001.
http://www.iris.umd.edu/publications/detail.asp?ID=wp&number=241
Sajo, A. “ The Law of Liposuction.” East European Constitutional Review
8, no. 4, Fall 1999. http://www.law.nyu.edu/eecr/
Sonin, K. “Why the rich may favour poor protection of property rights.”
Journal of Comparative Economics 31 (2003): 715-731.
Xu, C., and K. Pistor. Law Enforcement under Incomplete Law:
VOL. 2 ,
NO.
1 — MAY 2 0 0 6
Theory and Evidence from Financial Market Regulation. Columbia
Law School Center for Law and Economic Studies Working Paper
222, April 2003. http://ssrn.com/abstract_id=396141.
25
26
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
THE CHALLENGE OF CHINA: TESTING TIMES
FOR NEW LABOUR’S ‘ETHICAL’ DIMENSION
A CASE STUDY OF THE EU ARMS EMBARGO ON
CHINA
Kayte Rath ‡
A BSTRACT 1
The inclusion, in 1997, of an ‘ethical’ dimension to foreign policy by New
Labour has been a heavy burden for the UK Government to bear. This can
be seen most clearly in the negotiations surrounding the proposal to lift
the EU arms embargo on China, which has been in place since the events
in Tianan men Square in 1989 on a policy stance aligned to protect
international human rights. The discussion within the UK sidelined this
element of the debate, using manipulation of human rights discourse to
support its pro-lift position. The minimal element that the discourse of
human rights played can be best understood by considering two other
factors. First, the rise of China as an econo mic power has provided an
incentive for the EU to deliver a symbolic gesture, in the form of the
embargo lift, to attempt to socialise China into the international global
economy and its implicit mannerisms. This is underpinned by a long-term,
strategic econo mic engagement with the country and the pursuit of global
stability. Second, the overt advocacy of France and Germany in support
of the proposal meant that the UK could not take up a stance against this.
However, the UK’s relationship with the US restricted its ability to take a
‡
M.Sc. (Public Policy), School of Public Policy, University College London;
Contact with questions/comments: kayterath@hotmail.com.
1
The author would like to extend special thanks to Thom Rath and Jack Straw.
Further thanks to all interviewees, Charles-Henry Courtois, Tamzin Robertson, Moms,
Pops and Sis. Xie xie.
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
27
strong stance and it sought to balance its two competing diplomatic
relationships. The passing of an anti-secession law by the Chinese
government led to a critical change in the embargo discussions. Human
rights were then used as a way for the EU to avoid political
embarrassment, but keep the embargo lift on the agenda for the future.
Overall, the case study shows the ease with which human rights discourse
can be manipulated to serve the interests of different groups. Thus, a
nuanced realist framework is the most illuminating in this case and
although international normative pressure can exert itself, such as with the
embargo’s original imposition, this remains the exception rather than the
rule.
1.
INTRODUCTION
The pursuit, by New Labour, of a foreign policy with an ‘ethical
dimension’ is one that has plagued the government’s foreign relations
since it came to power in 1997. Ever since the then Foreign Secretary,
Robin Cook outlined his vision of British foreign policy as one that
“would put human rights at the heart of our foreign policy”2 giving them
“a new priority,” 3 New Labour has consistently struggled to make this
policy ideal into a concrete reality. The move towards an ethical practice
was meant to rejuvenate British foreign policy so that Britain, once more,
could become an important player in the international community.
Instead, it has proven to be a heavy burden to bear, with the traditional
cartels of national interest, geopolitics and economic prowess continuing
to dominate.
The well-documented rise of China’s prominence onto the
international scene has raised questions about the kinds of pitfalls involved
in juggling ethical considerations with more traditional foreign policy
concerns in a starker contrast than ever before. The burgeoning Chinese
economy and the opportunities for investment and trade are juxtaposed
against the authoritarian regime and the widespread human rights
violations it perpetuates. China is a “particularly difficult case”4 and
presents a dilemma for the EU, USA and the rest of the world, in how they
can benefit from a strong economic relationship with the country, while at
the same time being politically wary about China’s policies and actions.
2
Robin Cook quoted in T. Dunne and N.J. Wheeler, Moral Brittania? Evaluating
the Ethical Dimension in Labour’s Foreign Policy (London: The Foreign Policy Centre,
2004).
3
R. Cook, “Human Rights: Making the Difference” Speech given by Robin Cook to
Amnesty International Human Rights Festival, October 16, 1998.
4
Peter Hain MP quoted in New Statesman, “The New Statesman Interview”, April 3,
2000.
28
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
This broad ranging struggle is encapsulated in the ongoing negotiations
surrounding the lifting of the European Union’s arms embargo policy
towards China. Originally put in place on human rights grounds in 1989
following the incidents in Tiananmen Square, the policy has risen to the
European agenda and has been the subject of fierce debate since 2003. In
an analysis of the UK’s role and position on this policy, this paper seeks
to illuminate current trends in UK policy towards China and demonstrate
how much of the once publicised ‘ethical dimension’ really remains rooted
in New Labour’s agenda. This will be achieved through an analysis of the
role human rights considerations have played in the formation of the
UK’s position on this issue.
The move by Labour to an ‘ethical’ foreign policy can be seen as part
of a wider shift in the foreign policies of Western governments in taking a
more normative stance in their international relations, offering
alternative motives for action other than the narrow concerns of national
interest that have traditionally characterised foreign policy formation.5
Although realism6 has dominated the field of international relations
theory, normative international relations theories have gained increasing
attention, 7 demonstrating the mirroring of Labour’s shift towards a more
normative approach in academic discourse. However, as Brown notes,
realism itself does not lack an ethical dimension, it just sees moral priority
as lying in serving the interests of the members of its own state above the
interests of members of other states.8
Similar to Brown, Frost 9 notes that all foreign policy statements and
actions have ethical meaning and implication so the idea of an ethical
versus a non-ethical foreign policy is something of a false dichotomy. For
him, the importance rests with the interplay between normative and selfinterested concerns, with realism positing a more modest, circumscribed
ethical element than the publicly trumpeted ‘ethical’ stances of New
5
M. Light & K. Smith (eds.), Ethics and Foreign Policy (New York: Cambridge
University Press, 2001).
6
Theory of international relations, which predicts that due to the anarchic nature of
the international system states will always work in their own self-interest to secure their
own interests to maintain or increase their position on the international stage. See
Kenneth Waltz, Theory of International Politics (Boston: McGraw Hill, 1979).
7
C. Beitz, Political Theory and International Relations. (Princeton NJ: Princeton
University Press, 1979); Chris Brown, International Relations Theory: New Normative
Approaches (Hemel Hempstead: Harvester Wheatsheaf, 1992); M. Frost, Ethics in
International Relations (Cambridge: Cambridge University Press, 1996); M. Hoffman,
“ N ormative International Theory: Approaches and Issues in Groom”, In Contemporary
International Relations: A Guide to Theory ed. A. R J. and M. Light. London: Pinter
Publishers, 1994).
8
Chris Brown, “Ethics, Interests and Foreign Policy” In Ethics and Foreign Policy
ed. M. Light & K. Smith, 15-32 (New York: Cambridge University Press, 2001).
9
M. Frost, Putting the World to Rights: Britain's Ethical Foreign Policy Cambridge
Review of International Affairs 12 (1999).
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
29
Labour. Committed realists, such as Carr10 would point to such moral
discourse as only a guise for other narrow national interests or argue for
the potential for moral discourse to play an instrumental role in
comprising the power of the state to act. 11 As Chandler12 points out, an
ethical dimension to foreign policy is one that suits Western governments,
such as Britain, since it provides a mission statement and increased
legitimacy to their domestic audience. On these accounts, any discussions
around lifting the embargo would focus their concerns solely on national
interest.
These arguments deny the role of international socialisation and norm
dynamics, however, which have played a role in allowing norms, such as
human rights, a greater degree of acceptance in foreign policymaking.
Finnemore 13 stresses this and the way norms can shape and regulate the
behaviour of states. Realist explanations fail to take into account essential
features of politics like emotional appeal to a political goal or the grounds
for moral judgement. The original imposition of the arms embargo could
be seen as just such an instance, motivated purely on the grounds of moral
judgement and motivation derived from international norms, bolstered by
a large-scale, intensely vocal mobilisation of global civil society.
However, if normative explanations proved true in all cases, Labour’s
reputation of sticking to its ethical commitments would be more positive
than it currently is. Although some have been broadly favourable to the
Government, 14 the involvement of the ‘ethical dimension’ seems to have
declined over time. Dunne and Wheeler, for instance moved from
concluding in 1998 that there “has been a marked shift in the content and
conduct of British foreign policy” to two years later supporting the
conclusion that there is an “increasing discrepancy between the moral
rhetoric of the Blair Government and its subsequent practices.”15 More
10
E.H. Carr pointed to the role of the British Harmony of Interests in convincing
others, including those victims of British imperialism, that their interests were the same as
Britain’s in E.H. Carr, The Twenty Years Crisis 1919-1939: An Introduction to the Study
of International Relations (London: Macmillan, 1964).
11
Henry Kissinger, American Foreign Policy 2 (New York: W. W. Norton, 1997).
12
D. Chandler, “Rhetoric Without Responsibility: The Attraction of ‘Ethical’
Foreign Policy” British Journal of Politics and International Relations 5, no. 3 (2003):
295-316.
13
Martha Finnemore, National Interests in International Society (New York:
Cornell University Press, 1996).
14
R. Little and M. Wickham-Jones (eds.), New Labour’s Foreign Policy: A New
Moral Crusade? (Manchester: Manchester University Press, 2000); R. Cook, “Putting
Principle into Practice: The Role of Human Rights in Foreign Policy” Cambridge Review
of International Affairs 15, no. 1 (2002): 45-51.
15
T. Dunne and N. Wheeler, “Good International Citizenship: A Third Way for
British Foreign Policy” International Affairs 72, no. 1 (1998): 850; T. Dunne and N.J.
Wheeler, “Blair’s Britain: A Force for Good in the World?” in Ethics and Foreign Policy
ed. M. Light & K. Smith, 168 (New York: Cambridge University Press, 2001).
30
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
recently, they have shown further disappointment arguing that Blair’s
decision to go to war with Iraq has irreversibly damaged the reputation of
the ethical foreign policy and it is in sore need of revival. 16 Similarly,
Abrahmsen and Williams 17 show that although the introduction of an
‘ethical dimension’ into British foreign policy has raised the UK’s profile
in the international arena, the policy is intrinsically problematic. The
tension between New Labour’s internationalism and the more traditional
realist concerns of national interest are all too apparent, as are the
contradictions involved with committing to both political and economic
liberalism. Furthermore, as Williams18 discusses, the jettisoning of the
term ‘ethical’ in Labour’s election manifesto for 2001 demonstrates how
the explicit use of the term proved too much of a burden to bear by
providing benchmarks that highlighted the administration’s failings, more
than achievements in a positive light.
Consequently, there is a sense of failure around the policy, even
amongst Labour’s own MPs, 19 yet this is too simplistic a reaction. As
previously stated, realism is not without its ethical components and
international norms have had their role to play. However, this case shows
that with a lack of robust civil society pressure or large scale, emotive
media events, there may be a tendency to regress into narrower realist
(though not necessarily unethical) concerns of national interest. Realist
assumptions in generally prove useful however; the fact that there has not
been a complete removal of content associated with ‘ethics’ from the
Foreign and Commonwealth Office (FCO) may suggest that a more
nuanced account of realism is needed. This is one that acknowledges not
only the ethical dimension of traditional diplomacy itself, but also of the
possible influence of international civil society in creating constituencies
for newer broader definitions of ethics in foreign policy, although these
may remain the exception rather than the rule.
As stated, despite the seeming decline of Labour’s ethical stance, an
examination of FCO policy, mission statements, speeches and press
releases reveals the element still alive and kicking. 20 It is hard to avoid the
discourse of human rights. The FCO has published annual human rights
16
T. Dunne and N.J. Wheeler, Moral Brittania? Evaluating the Ethical Dimension
in Labour’s Foreign Policy (London: The Foreign Policy Centre, 2004).
17
R. Abrahmsen and P. Williams, “Ethics and Foreign Policy: The Antinomies of
New Labour’s ‘Third Way’ in Sub-Saharan Africa” Political Studies 49 (2001): 249-264.
18
P. Williams, “The Rise and Fall of the ‘Ethical Dimension’: Presentation and
Practice in New Labour’s Foreign Policy” Cambridge Review of International Affairs
15, no. 1 (2002);.See also The Guardian, “Labour Drops ‘Ethical Tag’,” September 4,
2000.
19
T. Kingham, “Wanted: Ethics in Foreign Policy” Socialist Campaign Group
News 164 (2001).
20
Foreign and Commonwealth Office Website, FCO, www.fco.gov.uk, (accessed 12 th
September 2005).
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
31
reports since 1998, has a specific department dedicated to human rights
concerns, democracy and governance (HRDGG), and maintains human
rights concerns among its key priorities.21 The ‘ethical’ element is still
overtly present and still jostling for position within the FCO’s varied and
competing foreign policy considerations. As stated before, China
represents a considerable challenge on this front as to how the UK can
marry its desires to see economic advancement, regional and global
stability while committing itself to the improvement towards better
human rights and democratic structure in China. These are more often
than not conflicting interests, which form part of a wider debate on the
management of China’s rising prominence.
How to deal with the increasing importance of China is perhaps one
of the most prominent elements of post-Cold War international relations.
Throughout history, countries have risen up and fallen down the ladder of
supremacy and there is no magic formula for dealing with a rising power. 22
How you deal with a rising power will also reflect one’s own position
within the spectrum. However, the case of China is seen as presenting a
plethora of difficulties based not only on its unprecedented economic
growth, but also its political regime and its potential to develop global
influence rivaling that of the USA, perhaps attaining superpower status.23
Different strategies have been developed to try and deal with China.
These have ranged from strict advocates of containment 24 and the use
balance of power principles and tactics to different forms of engagement
intended to integrate China into international society. 25 The policy of
containment however, is now largely defunct with most governments
agreeing that some form of engagement is the best policy for dealing with
21
Foreign and Commonwealth Office Website, “UK Priorities,” FCO,
http://www.fco.gov.uk/servlet/Front?pagename=OpenMarket/Xcelerate/ShowPage&c=Pa
ge&cid=1007029393465, (accessed 12 th September 2005).
22
R. Schweller, “Managing the Rise of Great Powers: History and Theory” In
Engaging China: The management of an emerging power ed. A.I. Johnston and R.S Ross
(London: Routledge, 1999).
23
D. Shambaugh (ed.), Greater China: The Next Superpower? (Oxford: Oxford
University Press, 1995); S. Kim, “China as a Great” Current History Sept. (1997): 246251; A. Goldstein, “Great Expectations: Interpreting China’s Arrival” International
Security 22, no. 3 (1997): 36-73.
24
A. Waldron, “Deterring China” Commentary 100, no. 4 (1995); G. Rachman,
Containing China in Washington Quarterly 19, no. 1 (1996): 129-140; G. Segal,
“East Asia and the containment of China” International Security 20, no. 4 (1996):
107-135.
25
D. Shambaugh, “Containment or Engagement of China? Calculating
Beijing’s Responses” International Security 21, no. 2 (1996): 180-209; J. Shimm,
Weaving the Net: Conditional Engagement with China (New York: Council on
Foreign Relations Press, 1996).
32
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
China, 26 although what form this takes will vary. Shambaugh argues that
although “the insular and defensive character of Chinese politics and
nationalism suggests that China will be reluctant and difficult to engage and
to integrate into the existing international order,”27 the international
community must try in order to protect international order and economic
stability.
For those such as Shimm, 28 this policy of engagement means
attempting to develop a constructive way to react to the rise of China.
This will involve increasing economic integration and the pursuit of
security engagement to reduce the risks posed by China’s military
expansion. Pursuit of these aims will lead China into the international
fold. Enmeshing China into global regimes will help direct its action in a
more cooperative manner. 29 As demonstrated by Ross, success has already
been seen in this area. He argues that the US has been fairly successful in
engaging with China by managing to pursue short-term, as well as longterm aims. In the short-term it has gained access to valuable Chinese
markets and in the long-term it has facilitated engagement of China in
multilateral institutions.30
However, policies of engagement have focused mainly on economic
and security integration, with Shimm placing ‘respect for basic human
rights’ at the bottom of his ten principles of conditional engagement. 31
The assumption is that economic liberalization will lead to an
improvement in human rights, democracy and the rule of law. The effect
of China’s ‘opening up’ policy has so far been positive in this area. For
example, it has led to the allowance of more media freedom. This was
initially aimed at reducing financial losses, but the freeing of public
discourse has been an indirect result. 32 However, the effect is diffuse and
protracted, and as Nathan argues, “Economic engagement is a
26
Shambaugh, “Containment or Engagement of China? Calculating Beijing ’s
Responses.” e.g. the EU, Australia, Japan, ASEAN, Canada and the US.
27
Shambaugh, “Containment or Engagement of China? Calculating Beijing ’s
Responses,” 209.
28
Shimm.
29
S. Kim, “China and the United Nations in Economy” In China Joins the World:
Progress and Prospects ed. E & M. Oksenberg, 43-89 (New York: Council on Foreign
Relations Press, 1999).
30
The US was instrumental in getting China into the CTBT (the Preparatory
Commission for the Comprehensive Nuclear Test Ban Treaty), the Nuclear Non
Proliferation Treaty (NPT) and the Zangger Committee (Committee looking at the
interpretation of article III, paragraph 2 of the NPT) (see R.S. Ross, “Engagement in US
China Policy in Johnston” In Engaging China: The management of an emerging power
ed. A.I. Johnston and R.S. Ross (London: Routledge, 1999).
31
Shimm, 8.
32
1994).
M. Pei, From Reform to Revolution (Cambridge: Harvard University Press,
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
33
complement to, not a substitute for, human rights policy.” 33 There are
areas where economic integration may harm rights, such as labour
conditions and areas where it may make no difference at all, such as the
high death rates evidenced in Chinese orphanages. Contrary to Shimm,
Nathan holds that China must be held to a level of human rights conduct
concurrent with its emerging importance and this justifies urgent and
sustained attention to China’s human rights record by the West.
The necessary attention to human rights Nathan calls for, however,
will frequently come into conflict with the economic pursuits of countries
in China. As noted by Breslin, 34 the UK’s pursuit of commercial contracts
in China is in danger of overriding any remaining ethical element of
foreign policy the UK has. Presumably, following similar logic to Shimm,
the improvement in human rights is set to follow on from this. However,
as Nathan points out, it is only when the West has taken a strong stance
on human rights in China has it been able to successfully support China’s
internal evolution. 35
Furthermore, the UK’s reputation for improving human rights in
China has been poor. New Labour’s “much heralded diplomacy of human
rights produced little in the way of discernible achievements in China,” 36
focusing more on not wishing to ‘rock the boat’ and endanger commercial
ties. At the EU level, policies toward China are sometimes just as confused
with those not always contributing towards the objectives of a more stable,
democratic China, and often failing to bring about the intended result of
making China a more stable global partner. 37
It is against this backdrop that the lifting of the EU arms embargo on
China emerges. As Labour begins its third term in government, takes on
the EU presidency and begins charm offensives towards China in the form
of various diplomatic visits, an assessment of how human rights
considerations are impacting British foreign policy now is an important
test not only for Blair’s government, but for the promotion of universal
principles in general. A study of relations with China, through the lens of
the arms embargo, is a perfect opportunity to examine the extent to
which human rights considerations really are given credence in UK foreign
33
A. Nathan, “China and the International Human Rights Regimes in Economy” in
China Joins the World: Progress and Prospects ed. E. and M. Oksenberg, 136-160 (New
York: Council on Foreign Relations Press, 1999).
34
S. Breslin, “Beyond Diplomacy: UK Relations with China since 1997”
British Journal of Politics and International Relations 6, no. 3 (2004): 409-425.
35
Nathan, 159.
Dunne and Wheeler, 182.
37
K. Barysch, C. Grant and M. Leonard, “Embracing the Dragon: The EU’s
partnership with China” (London: Centre for European Reform, 2005).
36
34
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
policy, and how Britain is fostering relations with this rapidly expanding
nation.
This paper will first give a brief background to the arms embargo and
the debate surrounding it. This will be followed by a discussion of the role
accorded to human rights in the formulation of the UK’s position, arguing
that the role was so minimal as to virtually be non-existent. The
remainder of the paper will seek to explain why this was the case and
conclude that the UK hides behind its bilateral human rights dialogues with
China to justify its avoidance of human rights in broader policy
discussions. In addition, it has failed to acknowledge the potential leverage
available from the embargo and the symbolic significance of lifting the
embargo without human rights concessions by China. It will also conclude
that on this issue, the UK’s commitments to and pressures from its
relationships with the EU and the USA prevented it from making a strong
stance on the arms embargo, demonstrating that its pledge to an ethical
stance falls well below the priority accorded to sustaining its diplomatic
ties.
2.
B ACKGROUND TO THE EU ARMS EMBARGO ON C HINA 38
The embargo under discussion was put in place on 27 June 1989 in
response to the crackdown by the Chinese authorities on students
protesting for democracy in Beijing’s central square. The EU responded
during the Madrid European Council by putting an embargo in place on
arms sales and military cooperation. 39 China has long been calling for the
embargo to be lifted, perhaps most ardently in China’s EU Policy Paper in
October 2003. The first of its kind, this paper calls explicitly for an end
to the embargo stating “The EU should lift its ban on arms sales to China
at an early date so as to remove barriers to greater bilateral cooperation
on defence industry and technologies.”40 This prompted discussion within
the EU, and China found a truly prominent advocate within the union, in
the form of France. France pushed the issue to the EU agenda for
discussion, with German Chancellor Schroeder quickly adding his voice to
that of the French president Chirac.
38
A copy of the original Declaration On China, containing the arms embargo appears
in Appendix 1.
39
European Parliament, “European Parliaments Fact sheet 6.3.10: China”, European
Parliament, http://www.europarl.eu.int/facts/6_3_10_en.htm, (accessed September 12,
2005).
40
Department of European Affairs, “China’s EU Policy Paper”, Dept. of European
Affairs, http://www.fmprc.gov.cn/eng/wjb/zzjg/xos/dqzzywt/t27708.htm, (accessed
September 5, 2003).
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
35
Since then, the embargo has undergone various negotiations, being
referred to the GAERC and COREPER. 41 Proponents of the embargo lift
have argued that the embargo is no longer relevant in today’s
international society, and therefore the EU should be working towards a
more positive engagement with China by moving away from multilateral
stigmatisation. Those against a decision in lifting the embargo have argued
how such a decision could destabilise the tense situation between Taiwan
and China42 and how China’s human rights records does not deserve the
kind of reward the embargo lift would represent.
The embargo was due to be lifted in June 2005, but this deadline was
dropped following the passing of an anti-secession law against Taiwan by
China, which was said to change the political atmosphere of the
discussions surrounding a policy reversal. It remains in place at the present
time. Although the EU remains committed to lifting the embargo at some
point, it is uncertain as to when this will occur.
What is certain however, is that during the UK’s presidency of the
EU, the topic is almost sure not to arise. The UK’s position on the issue
has been characterised by non-commitment and a sense of “muddling
through in the middle of the pack.” 43 Although it is keen to stress that the
proposal to lift the embargo is “still under review and is still an ongoing
negotiation,” 44 the UK has come out publicly in favour of the lift, with
Jack Straw claiming that he “supported the proposal from President
Chirac and Chancellor Schroeder that we should review the EU China arms
embargo because, on the face of it, it had run its course.”45 This pro-lift
position will be investigated in the rest of the paper.
41
General Affairs and External Relations Council and the Permanent Representatives
Committee respectively.
42
The territory of Taiwan possesses an ambiguous diplomatic status. The PRC seeks
the total reunification of the territory of Taiwan as part of its ‘one China’ policy. However,
the present Taiwanese administration views Taiwan as an independent sovereign state.
This tension has the potential to escalate into military confrontation, which could involve
the USA under the Taiwan Relations Act of 1979.
43
Interview conducted with a source close to the Government 1, July 11, 2005
(please note, all transcripts are available from the author.
44
Interview conducted with a source close to the Government 3, July 28, 2005.
45
Defence, Foreign Affairs, International Development and Trade Industry
Committees (Quadripartite Committee). “Strategic Export Controls: HMG’s Annual
Report for 2003, Licensing and Parliamentary Scrutiny” (London: HMSO, 2005).
36
3.
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
“H UMAN RIGHTS HAVE BEEN A VERY SMALL PART OF THIS WHOLE
46
DISCUSSION ” : THE ROLE OF HUMAN RIGHTS CONSIDERATIONS IN
SHAPING THE UK’S POSITION
Given that Mr. Straw thought the embargo had ‘run its course,’ it
becomes necessary to examine why the UK Government under the
leadership Tony Blair took this stance. As previously mentioned, this
paper focuses on the role of human rights in policymaking as a test for the
Government’s explicit commitments to human rights. Consequently, we
shall begin with a discussion of the role human rights plays in the
considerations regarding the UK’s pro-lift position.
A commitment to human rights forms one of the sets of priorities the
FCO has in pursuing its foreign policy and is said to be “integral to the
Government's wider foreign policy and security agenda.”47 However, the
extent to which these considerations have played in the UK’s position on
the EU arms embargo is not as transparent as its mission statement would
indicate. Given that the embargo was originally put in place on human
rights grounds, one might imagine that considerations of human rights also
played a crucial role in the proposals for lifting the embargo. However,
most of the evidence points to the contrary. As one source indicates
“there hasn’t been a real attempt to push China to make human rights
concessions as a quid pro quo for lifting the embargo.”48 The view that
emerges is one of human rights as a “general foreign policy concern,” 49
which needs to be addressed not substantively in itself, but because of
public perception or its instrumental uses. The Government puts little
effort into ensuring human rights are taken seriously and the lack of
clarification over what constitutes human rights means there is
considerable room for interpretation, manipulation and manoeuvre, which
the Government has used to the full in relation to this case.
In the wider public sphere however, the subject of human rights has
been raised on numerous occasions in respect of this policy: in Parliament,
in the press and by NGO groups. NGOs have consistently raised concerns
over the issue of human rights. Amnesty International urged the EU to
consider carefully the message it would send out about human rights if the
embargo were to be raised,50 whilst Human Rights Watch warned that to
lift the embargo without sufficient pressure on the Chinese “would be a
major setback for human rights in China and the EU’s reputation as a
46
Interview conducted with a source close to the Government 1, July 11, 2005.
Foreign and Commonwealth Office Website. “Speech of FCO minister, Ian
Pearson” (21st July), http://www.fco.gov.uk, (accessed September 12, 2005).
48
Interview conducted with a source close to the Government 1, July 11, 2005.
49
Interview conducted with a source close to the Government 2, July 26, 2005.
50
Amnesty International, EU Press Office Release, April 14 (Brussels: Amnesty
International, 2004).
47
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
37
serious advocate for human rights.”51 In addition, some organisations took
part in extensive lobbying of the UK and EU to promote further this
aspect of the situation. 52
In the press, human rights considerations were also featured, albeit
alongside the issues of regional stability involving Taiwan and the reaction
from the US. Comment pieces in national newspapers warned of trading
the embargo away lightly without due consideration of the human rights
element: the “EU does not have to give away the embargo for free,” 53
suggesting concessions on human rights regarding the release of
Tiananmen prisoners or ratification of the International Covenant on
Civil and Political Rights as an appropriate gesture by the Chinese. This is
echoed by David Shambaugh in the International Herald Tribune who also
cites China’s numerous human rights failings as a significant contributing
factor to making the lift unacceptable.54
In Parliament, the subject has been raised both within the House of
Commons and the House of Lords. As Tom Harris MP pointed out, since
1989, “China's human rights record has barely improved in any discernible
way.”55 Similarly, several Early Day Motions (EDM) by MPs from across
the parties make explicit reference to the human rights arguments
surrounding the debate and raise concerns about the lifting of the embargo
without taking these sufficiently into account. 56 As Greg Pope notes, “the
lifting of the EU arms embargo is not warranted by China's appalling
human rights record.”57 In addition to this, the Foreign Affairs Committee
(FAC) Human Rights Report 2005 concludes that “the raising of the EU
arms embargo on China would send the wrong signal at this time, in the
absence of strong undertakings from the Chinese government to address
human rights issues.”58
The acknowledgement of a human rights element to the debate by
those involved in parliament, the media and NGOs is clear. However, the
widespread vocalisation of these concerns was certainly less than that
51
Human Rights Watch, “Open Letter to Tony Blair, Prime Minister:
Recommendations for the upcoming E.U.-China Summit”, http://www.hrw.org.uk
(accessed August 30, 2005).
52
Alison Reynolds, interview with author, August 16, 2005.
53
The Guardian, “The Lure of Beijing,” May 25, 2005.
54
The International Herald Tribune, “EU To Put Brakes on Lifting the EU Arms
Embargo to China”, April 13, 2005.
55
Hansard Reporting, “Tom Harris MP, Column 156-157” (London: TSO, January
25, 2005), www.parliament.uk.
56
H. Cohen, Early Day Motion 986: EU Arms Embargo on China (London: TSO,
2004); S. Doughty, Early Day Motion 630: Arms Embargo on China (London: TSO,
2005); all EDMs available at www.parliament.uk.
57
G. Pope, Early Day Motion 891: Arms Embargo in China No. 2 (London: TSO,
2005).
58
Foreign Affairs Committee, Human Rights Report 2005. (London: HMSO, 2005),
7, 36.
38
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
garnered in 1989, owing to the lack of a specific, high profile, emotive
media event. This is not to deny that there were no other concerns to be
expressed if the embargo were to be lifted.59 Crucially though, human
rights concerns, while acknowledged by all as at least minimally relevant
to the public debate, were given very different discursive and political
priority by different groups. For the FAC, Greg Pope and the 31 MPs that
signed his motion, human rights concerns were enough in themselves for
the embargo to remain. For others, it was enough to raise grave concerns
and call for a compulsory review of the embargo before a decision on its
lifting should be made.60 Yet for the Government, these concerns featured
little in the formation of their position on the issue and the possibility of
a review, indicated by Straw, has never been fully substantiated: “There has
never been a review in the sense of ‘let’s see what having the embargo
there has achieved. Let’s see whether we should maintain it or even
strengthen it.’ Instead, it has been more about ‘shall we lift it?’ and if so
‘how can we mitigate the impact?’ When you see a review being spoken
of, that’s rubbish.”61 This suggests that Government considerations were
purely instrumental and totally divorced from the original objectives of
the embargo; it also seems to suggest that the lift was seen as inevitable
and therefore the Government concentrated on the effect of the decision
itself, rather than whether to lift it or not.
To the extent that the Government did take account of the human
rights element it can be seen more as an exercise in damage control. It did
offer responses to the human rights concerns discussed by arguing firstly,
that it believed China had improved its human rights record since 1989
and secondly, following on from the first point, that it did not belong in
the same category as other states under embargoes.
A standard response to the human rights argument within this debate,
from the Government was that “the human rights situation in China has
eased” and is “significantly better than it was 15 or 16 years ago.”62 Bill
Rammel MP demonstrates this position in a speech given on China in
Westminster Hall: “Human rights and individual freedoms, particularly on
the economic and social side, have undoubtedly increased greatly in the
59
Increased arms sales to China and the potential for this to cause regional
instability; potential to destabilise China’s relationship with Taiwan and the potential
for damage to UK transatlantic relations were all concerns that were openly expressed by
MPs, Peers, the media and NGOs alike.
60
M. Ancram, Early Day Motion 1004: Arms Embargo on China (no.2) (London:
TSO, 2005).
61
Interview with source close to the Government 1, July 11, 2005.
62
Defence, Foreign Affairs, International Development and Trade Industry
Committees (Quadripartite Committee), Oral evidence given by Jack Straw, Q114 on
January 12, 2005.
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
39
past 10 years.”63 The Chinese would also point to the amount of people
they have pulled out of poverty since 1989 and indicate these as advances
in social, economic and development rights; a position the Government is
willing to accept. 64 However, by emphasising economic and social rights
they seem to be moving the parameters away from the original abuses that
caused the embargo’s imposition. These were abuses of civil and political
freedoms surrounding issues of freedom of expression. In this area, the
Chinese Government can hardly point to any improvement, as is discussed
below. The invocation of social and economic rights raises questions about
the trade off between different kinds of rights and which ones take
priority. It also indicates the ease with which the discourse of human rights
can be manipulated and broken down to serve the interests of different
groups. Since there are no clear criteria as to which rights rank higher or
lower in priority, there is no way to significantly judge a country’s record
with any consistency. If the British Government agrees with the Chinese
on the significance of economic and social rights in this instance, then
they would seem to be indicating the lesser importance of civil and
political rights, yet arguably, since the embargo relates specifically to the
Tiananmen incident and the abuse of rights there, the Government’s
arguments are not addressing the key reasons for the embargo’s
imposition, making their stance largely irrelevant. Moreover, without
consistent criteria for assessing how much better or worse things have
gotten, it is hard for this discourse to have any real practical meaning,
either for governments or civil society.
This leads to perhaps one of the most striking aspects of the debate in
the UK, which is how the events of Tiananmen Square, having been
absolutely central to justifying and motivating the original embargo, are
frequently elided or pushed to the margins in government statements and
policy considerations. With Tiananmen and civil rights restored to its
central discursive position, the argument for retaining the embargo on
human rights ground flows easily. Not only are political dissidents
imprisoned after the events still in jail, but during the run up to the
fifteenth anniversary of the crackdown the Chinese Government showed
that little had really changed in their approach, either to the event itself
or to the issues surrounding freedom of expression that it represents. The
government “still forbids any public commemoration of the event. Police
harass and detain those dedicated to securing rehabilitation of victims,
payment of compensation, or reconsideration of the official verdict.” 65
63
Hansard Reporting, “Bill Rammell MP, Column 337W pt 24” (London: TSO,
March 16, 2005), www.parliament.uk.
64
Interview conducted with a source close to the Government 2, July 26, 2005
65
Human Rights Watch, World Report 2005 (New York: Human Rights Watch,
2005), 1.
40
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
Even the installation of a new leadership 66 in 2003 did not bring about a
significant turn around in the official Chinese view of events, with the
attitude of the Chinese administration remaining unapologetic. The new
government still refuses a review of the events, and the impunity
surrounding 1989 is ongoing, with no signal that this will change.67
Returning to the Government’s claim about the ‘easing’ of the human
rights situation in China, even if one was to concede that the events of
Tiananmen Square were no longer relevant, a big concession admittedly,
these claims of an ‘easing’ are not as well evidenced as the Government
would like to imply. The evidence to condemn China’s human rights
record is readily available and can even be found within the FCO, the very
department that is attempting to argue its improvement. The FCO’s own
Hu man Rights Report 2005 still lists China in the ‘Major Countries of
Concern’ section, with the UK continuing to have “serious concerns about
basic human rights in China.” 68 They are not alone. International NGO
groups have frequently and consistently condemned China’s human rights
record. Amnesty International, although seeming to agree to some extent
with the UK Government’s assessment that the human rights situation has
improved, stresses that whilst “there was progress towards reform in some
areas, this failed to have a significant impact on serious and widespread
human rights violations perpetuated across the country.” 69 It is not just
these ‘usual suspects’ that hold this concern. The US Department of
State’s 2004 Country Reports on Human Rights Practices details the
countless failings in China’s human rights record of recent times claiming
that “China’s cooperation and progress on human rights during 2004 was
disappointing. China failed to fulfil many of the commitments it made at
66
The pairing of Hu Jintao, President and Wen Jiabao, Prime Minister
The Guardian, “Tiananmen Review Rejected,” June 7, 2005.
68
Foreign and Commonwealth Office, Human Rights Report 2005 (London: HMSO,
2005), 40.
69
Amnesty International, Undermining Global Security: The EU’s Arms Exports
2004 (London: Amnesty International, 2004). Areas of improvement included: new
regulations aimed at preventing torture in police custody; an amendment to the
Constitution in March stated “the state respects and protects human rights”; progress was
also made on China’s AIDS/HIV epidemic with a new law to strengthen AIDS prevention
and stop discrimination against those infected; China also continued to engage in human
rights dialogues with other countries and allowed the UN Working Group on Arbitrary
Detention to visit. However, the government still arbitrarily detained peaceful activists
and advocates of reform; freedom of expression continued to be curtailed; violence against
women was widespread as a result of the family planning policy; imprisonment and
detainment of political activists was still widespread; repression and detention of the
Falun Gong movement and other unofficial religious groups continued; the death penalty
continued to be used extensively and arbitrarily; torture continued in a wide variety of
state institutions; there was forcible deportation of North-Korean Asylum seekers; harsh
repression on the Uighur minority in Xinjiang continued to be justified by the ‘war on
terror’; Freedom of religion, expression and association continued in Tibet with arbitrary
arrests and trials.
67
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
41
the 2002 US-China Human Rights Dialogue.”70 Thus, the US seems to be
in disagreement with the UK as to the level of human rights progress that
has actually been obtained within China. This provokes questions as to the
evidence and criteria each government uses. Either they both work from
identical criteria but disagree on evidence or they have the same evidence
but a totally different understanding of what is an acceptable ‘easing’ of
conditions. If human rights were really a central consideration, one would
expect the UK Government to make its criteria clear; it has failed to do so
and has further complicated the issue by invoking social and economic
rights. Again, there is a lack of clarity, which seems to indicate a probable
lack of seriousness on the part of the Government.
A further line of argument the Government has used with the
intention of justifying the removal of the arms embargo, was that China
did not deserve to be in the same category as other states such as Burma
and Zimbabwe, which are subject to similar arms embargoes. Jack Straw
intimated that he had “long understood China’s argument, which is that to
lump them in with, say, Burma and Zimbabwe is not appropriate and I do
not think it is.”71 This seems to imply that although China is a human
rights abuser, it is not as big an abuser as the likes of Burma and Zimbabwe
and does not deserve to be castigated in this manner. Given the previous
discussion over the confusion of the ranking of rights and which ones
figure highest, it is hard to then understand the Foreign Secretary’s implied
view that China is less of a human rights abuser than Burma or Zimbabwe.
As far as the Government has shown, it has no explicit criteria in making
this judgment, nor does the Foreign Secretary give any further explanation
as to why exactly China no longer deserves to be in the same group as
these two. Again, there is lack of clarity and of consistency showing an
overall lack of seriousness in considering the issue of human rights in
China.
Aside from these arguments relating to the embargo, sources close to
the Government were keen to point to the bilateral human rights dialogues
that exist between China and the UK and stress these as the appropriate
means of tackling human rights issues with China. 72 This is further
70
US Department of State, Introduction at
http://www.state.gov/g/drl/rls/hrrpt/2004/41586.htm: The report criticises China’s
record on arresting and detaining political activists, as well as those freely discussing
ideas on the Internet, those attending house churches, lawyers acting on behalf of
dissidents and the disposed, workers protesting their rights, journalists and intellectuals.
It is also critical of continued abuses in prisons, the crackdown on the Falun Gong and
states that the Constitution amendment to include protection of human rights, remains
unclear as to what extent the Government plans to implement this.
71
Defence, Foreign Affairs, International Development and Trade Industry
Committees (Quadripartite Committee), Oral evidence given by Jack Straw.
72
Interview conducted with a source close to the Government 2, July 26, 2005;
Interview conducted with a source close to the Government 3, July 28, 2005.
42
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
supported by various parliamentary questions raised on China’s human
rights record, which sees ex-FCO minister, Bill Rammell consistently
pointing to the dialogue as the correct means of raising such issues with
China. 73 Together with the FCO, 74 these sources also have pointed to
projects that the UK had undertaken in China. 75 It is argued that these
dialogues and programs show the UK’s commitment to human rights in
China and are said to be more effective than the embargo at making a
difference to the situation in the country.
However, Dunne and Wheeler 76 showed these dialogues have in reality
born little fruit. Instead, the Chinese have used the dialogue as an end in
itself, avoiding further scrutiny of the human rights situation and
threatening withdrawal from the talks should the UK bring robust
pressure.77 Yet, despite the failings of these dialogues, the UK has refused
to acknowledge the opportunity to use the embargo as a tool of leverage
over China on human rights. As Alison Reynolds of Free Tibet argues, UK
policy towards China on human rights has “for too long been channelled
into a very specific programme, which is the bilateral human rights
dialogues.”78 Her point is that the UK should be pursuing its human rights
agenda with China through a variety of means and valuing a diverse
approach. The UK Government has failed to acknowledge that the “EU
arms embargo is a fantastically powerful means of leverage.”79 The
Chinese have applied considerable diplomatic pressure in trying to get the
embargo lifted: “Their lobbying was very forceful with no real hint that
they felt they needed to do anything in return.” 80 Such vigorous lobbying
indicates the importance the Chinese have attached to the lifting of the
embargo. With this kind of desire the EU could have used the embargo as a
tool with which to secure certain concessions on the basis of human rights.
This is something that the UK has seemingly ignored, rather content on
shifting the focus to the dialogues and programmes it pursues, without
acknowledging the human rights dimension of the debate or realising the
73
Hansard Reporting, ”Bill Rammell MP, Column 1549W pt24” (London: TSO,
November 16, 2004); Hansard Reporting, “Bill Rammell MP, Column 1651W pt26”
(London: TSO, 12 February, 2004); Hansard Reporting, “Bill Rammell MP, Column
337W pt 24” (London: TSO, March 16, 2005); Hansard Reporting, “Bill Rammell MP,
Column 971W pt16” (London: TSO, February 28, 2005). All available at
www.parliament.uk.
74
Foreign and Commonwealth Office.
75
These include: promoting judicial justice by reforming criminal trial procedure;
reforming the death penalty review system; standardising the death penalty through
sentencing guidelines; police and human rights and enhancing human rights in prisons.
(Foreign and Commonwealth Office, 44).
76
Dunne and Wheeler, “Blair’s Britain: A Force for Good in the World?”
77
Foreign Affairs Committee, Tenth Report: People’s Republic of China.
78
Alison Reynolds, interview.
79
Alison Reynolds, interview.
80
Interview conducted with a source close to the Government 2, July 26, 2005.
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
43
power they might have over China in this circumstance. It demonstrates,
along with the previous evidence, a lack of willingness to allow human
rights to play a significant role in policy discussion, preferring instead to
keep it boxed away in specific dialogues, which have a questionable
reputation for success. Again, a human rights profile is maintained but the
reality is that they are frequently sidelined in broader policy discussions
and the ineffective bilateral dialogues may suit the interests of the UK as
much as China, in that they project an image that cares about human
rights, but this is backed by little substance.
A closer institutional analysis of the role of the Human Rights,
Democracy and Governance Group (HRDGG) in the policy formulation
process confirms this general impression. It is true that the HRDGG was
consulted on the issue,81 yet the extent and nature of this consultation
remains unclear due to restrictions imposed because of the current
undecided nature of the policy and its ongoing sensitivity. One source
close to the Government asserted that there were “three pillars”82 within
the FCO that were involved with the discussion of the arms embargo.
These were the Counter Proliferation Department, the East Asia Group
and the EU Department (External). The HRDGG was not mentioned as a
major player within the policy process. Furthermore, the main forum for
public discussion on this issue was the Quadripartite Committee, whose
remit is to deal with strategic export controls. Those giving evidence to
the Quadripartite Committee 83 on this topic along with Jack Straw were
Edward Oakden, Director of Defence and Strategic Threats, and David
Landsman, Head of the Counter-Proliferation Department. This indicates
that these departments were considered by the Government to be the most
important players involved. The extent to which the embargo was
discussed in any other forum seems to have been minimal.
Furthermore, former Amnesty International Campaigns Manager for
Arms and Trade, Robert Parker suggests that the role of the HRDGG
within the FCO is severely limited with respect to arms exports licensing.
Based on his own investigations, he found that although the HRDGG was
the agency responsible for raising human rights concerns in the FCO “it
was unclear whether concerns raised by the HRPD (now the HRDGG)
would always be circulated to the DTI 84 , or whether their concerns were
sometimes taken out of the final collective FCO response if the decision
to support the licence application had been made. They don’t have the
power to actually veto applications on human rights grounds, and it was
81
HRDGG (pers. comm.)
Interview conducted with a source close to the Government 1, July 11, 2005.
83
Committee made up of the Defence, Foreign Affairs, International Development and
Trade Industry Committees.
84
Department of Trade and Industry, the department responsible for all final decision
on export applications.
82
44
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
unclear to what extent they ‘have the ear’ of the Foreign Secretary over
and above other FCO departments such as the Counter Proliferation
Department.” 85 Considering the previous evidence on those who were
involved, the HRDGG seems to have played an equally shadowy role in
this arms licensing debate than in previous ones.
Overall, human rights have played into this policy formulation only
in the most confusing, contradictory, endlessly mutable, and flexible
manner. This is perhaps inevitable given that all the evidence points to
government indifference or at the most, negligible interest towards the
human rights concerns originally behind the embargo. There is also
evidence of the absence of basic, clear, commensurate criteria across
departments, governments and NGOs on human rights standards providing
proper means of assessment, comparison and debate. There is a great deal
of room for different interpretations and stances, all apparently equally
loyal to ‘human rights’. Lastly, the Government’s bilateral human rights
dialogues with China have provided a veil to hide behind, with the
Government doing little to incorporate these concerns in wider debates.
The rest of the paper will examine further the first point raised above,
namely the Government’s indifference to human rights on this policy and
focusing on two main factors, and seek to explain why human rights
concerns, in this instance were not valued by the UK Government and
what other considerations were viewed as more important.
4.
THE RISE OF CHINA AND THE “ BIG SYMBOLIC PRIZE”86 : THE ROLE
OF THE GROWING C HINESE ECONOMY IN SHAPING THE UK’S
POSITION
Although it can be argued convincingly that China’s human rights
record has not changed significantly since 1989, other extremely
important factors in the country’s strategic importance to other states
have. It’s not new to note the amazing rise of China as an economic
power. China is the world’s fastest growing economy and as the most
populous country on the planet, it increasingly tantalizes the national
interests of other states by offering a potentially enormous market for
European trade and by having the ability to effect world markets.
Secondly, and flowing on from the previous point, China’s foreign policy
has consequently become more important. As it begins to have a greater
influence on the international market, it becomes more important to
other international actors and demands greater attention. As Sutter notes
“China’s present international significance rests heavily on its rapidly
85
86
Robert Parker, written interview, received August 16, 2005.
Interview conducted with a source close to the government 2, July 26, 2005.
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
45
growing economy and its increasing integration with the world
economy.”87
Having already seen that one of the FCO’s priorities relates to the
promotion of human rights, a glance at another priority may hold the key
to why human rights was accorded so little attention. The UK pledges, as a
foreign policy priority, the “promotion of economic interests in an open
and expanding global economy.” 88 With such a rapidly expanding
economy, China can hardly be left out of the UK’s calculations when
considering the potential future of the global economy in benefiting
British interests. The importance to the UK of a profitable trade
relationship with China is further supported by the FAC in stating that
“the heart of the Government’s new China policy has been a focus on
promoting the United Kingdom’s commercial interests.” 89
So, can the decision by the UK to support the lifting of the arms
embargo be seen as an attempt by the UK to pursue this particular foreign
policy priority with China? Although there is some room for debate in this
area, the majority of the evidence seems to suggest that the role of
economic motivation itself was not key. Firstly, the incentive for
increased arms trade with China was not present, and secondly, the
incentives towards less direct, commercial benefits were not obvious, thus,
not making them a key factor on their own. However, the increasing
importance of China as an international actor due to its expanding
economy was a key driver, making the decision to lift the embargo one of
political symbolic value rather than material and commercial one.
In respect to the arms trade, the removal of the embargo is not expected
to open up any major new markets for the UK. The EU’s Code of
Conduct, 90 which already regulates and assesses the granting of license for
arms exports against a series of criteria, is expected to maintain a similar
level of control over the market as the embargo. This is debatable and is
contested by NGOs.91 They argue that the existence of the Code means
that there is in place a regulatory mechanism on the arms trade, which is
seen to prevent, to a degree, the granting of export licenses. In turn this
87
R. Sutter, “Why Does China Matter?” Washington Quarterly 27, no. 1 (2004): 76.
Foreign and Commonwealth Office Website, “UK Priorities.”
89
Foreign Affairs Committee, Tenth Report: People’s Republic of China, paragraph
88
109.
90
Introduced in 1998, the Code of Conduct defines a list of criteria and operative
provision that must be met by all EU member states when exporting arms. Within this
Criterion 2 takes into account human rights, referring to the non-export of arms to
countries where the export may be used for internal repression. Criterion 4 takes into
consideration issues of regional peace, security and stability.
91
For a full exploration of the Code’s failings see: Saferworld, Taking Control
(London: Saferworld, 2004); Amnesty International, Undermining Global Security: The
EU’s Arms Exports 2004; Oxfam, Lock, Stock and Barrel (Oxford: Oxfam, 2004).
46
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
means that a motivation by the UK, based solely on the chance of
increased arms sales would be implausible. Brinley Salzmann, Director of
exports for the Defence Manufacturers Association sees little aspiration
from EU member states to capitalise on the embargo’s removal, confirms
this.92
In regards to the UK, an increase in arms sales, related specifically to
the embargo lift, is almost certainly sure not to arise for two reasons.
Firstly, due to the nature of the UK license application procedure as it
stands, and secondly, due to the relationship that the UK defence industry
has with the USA. Salzmann claims that he “can be perfectly certain that
a lifting of the embargo won’t result in any additional defence sales to
China,” 93 due particularly to the nature of the UK licensing procedure as it
already stands. He describes this as a “very strict and robust assessment
criteria for China.” 94 Secondly, because of the UK’s close transatlantic ties
with the USA and the USA’s relationship with Taiwan, any attempt by the
UK defence industry to sell weapons to the Chinese could potentially
rebound in a reactionary loss of sales from the US market or US
sanctions. 95 At the present time, in relation to the arms industry “the
Americans are our biggest off shore supplier. They are our second biggest
export customers in the world and they are our biggest collaborative
partners.”96 American business relations, for the UK arms industry, are too
important to be jeopardised by US retaliation over sales to China. BAE
Systems demonstrated as much when they claimed they would not sell
arms to China if the embargo were to be lifted, for fear of endangering
their extensive American interests.97
Although the embargo lift might seem like a potential opening for
arms sales, this is not the case. In terms of a potential market for arms,
China is even less attractive to the UK than it is to other EU member
states given its already strong licensing procedure and the close business
links with the American arms industry. If it is not going to cause a direct
positive economic impact on the UK defense industry, the question then
92
Brinley Salzmann, interview with author, July 21, 2005.
Brinley Salzmann.
94
Brinley Salzmann.
95
The Guardian, “Europe Risks Sanctions Over China Arms Sales”, March 3, 2005; J.
Tkacik, “The East Asia Security Act: A Step Towards Consensus Against Arms Sales To
China,” (The Heritage Foundation, 2005). Details the East Asia Security Act, which was
recently defeated in Congress. The EASA mandates that any person, firm, or country that
provides military arms, equipment, or technology to China or dual-use items to the
Chinese military, security forces, police, or other repressive agencies face heightened
scrutiny of its arms relationship with China and, if warranted, be denied access to U.S.
weapons technology.
96
Brinley Salzmann.
97
The Times, “British Arms Firm Will Spurn China If Embargo Ends”, February 22,
2005.
93
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
47
arises concerning other less direct commercial benefits that might occur
from the embargo lift and whether these had any impact upon the
consideration of the UK government in choosing to support the lifting of
the embargo.
In favour of this proposition are assessments based on past Chinese
attitudes to sanctions imposed against them and diplomatic or political
moves by other states, which do not fit with the Chinese government’s
aims. Past actions might imply that the Chinese, upon lifting the embargo,
would reward those member states in the EU who had been proponents of
the lift and punish those states that had been against it. Evidence relating
to Chinese actions concerning commercial ties would seem to indicate that
the government does work, to some extent, on such a ‘tit-for-tat’ basis.
For example, the US imposed trade sanctions on China after it had
transferred military equipment to Pakistan. In response, Chinese aviation
authorities switched to buying from the US company Boeing to the
European Airbus. Additionally, upon selling jets to Taiwan, France suffered
short-term economic harm in relation to its interests in China. 98
Consequently, it could be inferred that being seen to support the
embargo lift might cause similar results. The importance of good political
and bilateral ties with China to the advancement of commercial interests
in the country is key. When the president of China visited the UK in 1999
“major commercial contracts worth a total of 2 billion were signed”99 and
as Lord Powell, Chair of the China Britain Business Council argues, “A
good bilateral relationship at the political level is very important for doing
business in China—and probably more important in the case of China than
most other countries, simply because the role of the state and the
government is so big.”100 However, despite this kind of evidence, in
relation to the embargo, the advancement of commercial economic
interests by the UK has not been the “main driver,” 101 although it has
probably had some effect on the policy making process.
From sources close to the Government and those outside it, the
picture that emerges is one where, although long-term economic interests
were considered and are generally considered with regards to China, in
respect to the embargo policy, it was not the main driving force behind
their decision to support a lift. This was primarily due to the intangible
nature of any derived benefits. The sources indicated that there were no
particular references by the Chinese of specific or even more general
commercial areas that might benefit. Moreover, as one source argued,
even though “the French had been pushing for it very clearly - as is seen
98
Breslin, 421.
Foreign and Commonwealth Office Website. “FCO Strategy” (accessed September
12, 2005).
100
Oral evidence to Foreign Affairs Committee.
101
Bill Olner, interview with author, July 18, 2005.
99
48
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
by the Chinese to have been pushing for it very clearly - it wasn’t
altogether clear that they would repay the bilateral incentives for doing
so.” The economic incentive is “an argument you could advance but the
evidence doesn’t seem to back it up.”102 The benefits of lifting the
embargo for the UK would, in terms of trade and improved relations be
long-term and fairly imperceptible103 and consideration of this factor
would have to be balanced against the detrimental effect that lifting of the
embargo might have in UK/US commercial ties.
Overall, China’s rise in terms of economics has been considered as
part of the formulation of the position of the UK on the embargo lift but
did not form a major component and can probably best be thought of as an
ongoing long-term strategic engagement with China in commercial terms.
In that sense, it fits with the wider move towards economic engagement
and the UK priority as it relates to the global economy. However, there
was a further incentive at work, closely connected with the economic rise
of China, but more concerned with its role on the wider international
scene than with its economic potential and more concerned with social
engagement of China than economic engagement.
The desire to bring China into the international community and
provide a symbolic gesture that would make the Chinese government feel
more included and respected in the international community can perhaps
be seen as the fundamental driver in the formulation of the UK’s
position. 104 This is underpinned by the theory, espoused by Wang and
Deng,105 that including China more in international society will help it to
be more shaped by the multilateral institutions it belongs to and become a
responsible and constructive player within the international community:
“International enmeshment facilitates China’s social learning in terms of
the values, norms and principles, and rules of the international system.”
This approach was summarised by the FAC when they concluded that the
UK should attempt to encourage and support China’s closer integration
into the international system, in all fields, as a friendly and responsible
partner. 106 In this context, the embargo can be seen as a perfect
opportunity in accomplishing this objective. “Th ere are lots of global
challenges where we need China on the same side. You do not help that
process - in fact you actively hinder it - if you have them somewhere as a
pariah, as some way stigmatising them and an arms embargo is a good way
102
Interview conducted with a source close to the Government 2, July 26, 2005.
Interview conducted with a source close to the Government 1, July 11, 2005.
104
Bill Olner, interview; Interview conducted with a source close to the Government
1, July 11, 2005; Interview conducted with a source close to the Government 2, July 26,
2005; Interview conducted with a source close to the Government 3, July 28, 2005;
Brinley Salzmann, interview; Roy Isbister, interview with author, July 27, 2005.
105
F. Wang and Y. Deng, In the Eyes of the Dragon: China Views the World
(Lanham, MD: Brown & Littlefield, 1999).
106
Foreign Affairs Committee.
103
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
49
of doing that.” 107 By lifting the embargo, “you’ve given the Chinese a big
symbolic prize and they know it’s a prize and you know it’s a prize.”108
This would then have the hoped effect of moving forward some kind of
social and political engagement with China and help in other areas such as
global warming or being more responsible members of the Security
Council. In one source’s estimate this was “the only driver for doing it.” 109
The Government is “not interested in making statements for the sake
of it.” 110 Their agreement to support the symbolic gesture in favour of
China by lifting the embargo is backed up by the perceived benefits it may
accrue in terms of China’s increased socialisation into the international
community, long-term stability and institutionalisation. However, the
opposing effect of this positive symbolic gesture is the negative one sent
out in respect of human rights. Without any significant progress on human
rights in China, the symbolic reward of the embargo lift sends out a
damaging message about the extent to which human rights are considered
and the importance attached to them. Yet the UK has chosen to ignore
this element demonstrating that making a purely symbolic stand on human
rights is not a policy option. Human rights in themselves are not enough
to motivate states to act and this supports a more realist approach, where
national interests must be satisfied. In this case, this is through the
perceived long-term, geopolitical benefits to the UK.
However, this attempt at socialisation is something of a contradictory
response. In attempting to socialise China into international norms by
violating one of the founding ones, namely human rights, one can hardly
hope to successfully achieve their respect for international standards.
Rather it would send out a message that “either you think that human
rights in China are ok or you don’t really care about them.” 111 The
Government has already shown that it is not of the opinion that China’s
human rights are ‘ok’. This leaves the latter response and such a signal can
hardly hope to achieve respect for human rights from the Chinese if they
see this norm disregarded by those who purport to uphold it.
Consequently, whether these attempts to integrate China will be
successful remains to be seen however, the embargo policy can be seen as
part of this wider attempt to engage with China and bring it into the
international fold. It would produce no tangible short-term economic
benefits, only long-term intangible ones, but may produce concessions in
other vital areas in terms of international cooperation. Unfortunately, the
UK failed to see the negative side of this symbolic gesture in terms of the
value of human rights and the contradictory nature of the message it was
107
Interview conducted
Interview conducted
109
Interview conducted
110
Interview conducted
111
Interview conducted
108
with
with
with
with
with
a source close to the Government 1, July 11, 2005.
a source close to the Government 2, July 26, 2005.
a source close to the Government 1, July 11 2005.
a source close to the Government 1, July 11, 2005.
a source close to the Government 2, July 26, 2005.
50
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
sending out, which could undermine the socialisation they are attempting
to achieve. The long-term economic incentive to advance UK commercial
interests in China was present to some degree in the policy formulation,
but this was a minimal factor compared to the political symbolism of the
embargo lift.
5.
“THE GREAT EUROPEAN POWER PISSING CONTEST” 112 VERSUS “THE
113
EIGHT HUNDRED POUND GORILLA IN THE ROOM” : THE ROLE OF
THE EU AND THE USA IN SHAPING THE UK’S POSITION
Britain’s diplomatic ties with the rest of the world also feature within
FCO strategy and it emphasises the need for the FCO to work with others
in order to meet the priorities that they’ve set out: “No country can
tackle these issues alone,” 114 yet they also stress that “our most important
partnerships will be within the EU and with the United States.”115 As Hill
argues, “New Labour has sought to be friends with almost everyone.” 116 It
has built a strong relationship with the EU, whilst maintaining a close
relationship with the White House. It has also adopted the role of a bridge
between the two actors 117 leading to “a vast range of commitments, even
when times are serene.” 118 When times are not ‘serene’, such as with the
embargo debate, the range of commitments required to both actors can
restrict the UK’s to the point where it is unable to take its own stance on
the issue. It found itself “caught between two stalls in quite a classic
way,”119 with little room for manoeuvre.
Given that the arms embargo is an EU policy, the role of the
institution in shaping UK policy is crucial. The positions that other
member states took on the issue greatly affected the way that the UK was
able to precede with its own agenda. The issue first arose at the EU
European Council Summit on 18 December 2003 where France and
Germany proposed the lifting of the embargo. France began the initial talk
and “was keen to show that it was China’s best friend in Europe.” 120
Germany also lent their voice in support of the lift, with Schroeder
coming out strongly in support. This overt support of the lift from the
112
Interview conducted with a source close to the Government 1, July 11, 2005.
Roy Isbister, interview.
114
Foreign and Commonwealth Office Website, “FCO Strategy.”
115
Foreign and Commonwealth Website, “FCO Strategy.”
116
C. Hill, “Foreign Policy” in The Blair Effect: The Blair Government 1997-2001,
ed. A. Seldon, 348 (London: Little, Brown and Company, 2001), 348.
117
Interview conducted with a source close to the Government 1, July, 11 2005;
Interview conducted with source close to the Government 2, July 26, 2005; Bill Olner,
interview.
118
Hill, 348.
119
Interview conducted with a source close to the Government 1, July 11, 2005.
120
Interview conducted with a source close to the government 1, July 11, 2005.
113
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
51
UK’s European great power rivals left the UK in a difficult position in
forming their own take on the arms embargo issue.
Once these two countries had come out in favour of the lift, the UK
had little option than to agree with them. The nature of the UK’s position
within the EU meant that they were under a lot of pressure not to go
against the two other major powers and risk isolation in Europe. 121 The
prominent advocacy of the other two states also meant that any attemp t
to take a different position would run the risk of the UK being seen as
anti-China. If they had sought to take a strong stance against the embargo
this is the perception that would have come across particularly to the
Chinese who might, as discussed earlier, have punished the UK in the form
of a withdrawal from economic cooperation and damaged their bilateral
relationship. According to one source, the UK was motivated by a desire
not to be caught out: “If France was going to lead the show and you want
to stand in the way of that, then you can’t help but be seen as extremely
anti-China. I think that’s just the way European politics works.”122 The
UK “wanted to stay in the pack.” 123 This meant agreeing with the two
other member states.
On a leadership level of analysis, membership of the EU also exerted
its pressure. Tony Blair would not have wanted to take a position on the
embargo that was against that of his French and German equivalents: “It
would not have been acceptable to the Prime Minister or the Government
to take a much more backward position on lifting the embargo in
leadership terms against Chirac and Schroeder.”124 Presumably, this is due
to keeping up a certain political image within the EU and not letting
either of the other two prominent member state leaders overtake him in
importance or profile. The eyes of Number 10 were firmly on the process
within the FCO and were watching it “particularly closely.” 125 This
attention was further heightened by the approach of the UK’s ascendancy
to the presidency of the EU. As one MP argues, “the policy has been
decided not on the basis of our national interest, but on the short-term
tactical interest of the Prime Minister at the beginning of the EU
presidency. The obsession with regaining popularity among European
leaders seems to take precedence over any other considerations.”126
121
Interview conducted a source close to the Government 1, July 11, 2005; Interview
conducted with a source close to the Government 2, July 26, 2005; Interview conducted
with a source close to the Government 3, July 28, 2005.
122
Interview conducted with a source close to the Government 1, July 11, 2005.
123
Interview conducted with a source close to the Government 1, July 11, 2005.
124
Interview conducted with a source close to the Government 1, July 11, 2005.
125
Interview conducted with a source close to the Government 2, July 26, 2005.
126
Hansard Reporting, “Dr Liam Fox MP, Column 164 pt4” (London: TSO, May 18,
2005), www.parliament.uk.
52
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
At the European level, the UK’s hands were tied by the prominent
positions of its major counterparts in Europe. Both on UK level and a
leadership level, it would not have been possible for the UK to make any
kind of strong stance on the embargo for fear of being isolated in Europe
and of being punished by the Chinese. However, the UK’s hands were also
tied from another angle by its relationship with the US.
Arguably the most powerful state on the planet, the USA has played a
progressively increasing role of importance within the discussions
surrounding the embargo. Given that the policy is an EU one and bears no
direct relation to the US, the involvement of the state could have been
thought to be minimal. However, it appears that the USA may have been
the single strongest factor in determining how the UK reacted towards the
proposals to lift the arms embargo.
For some, the pressure that the USA exerted during the discussions
around the policy is the main reason why the embargo is still in place. Roy
Isbister of Saferworld believes that “if it weren’t for the US the embargo
would have been lifted. Ultimately, that’s what has so far delayed any
lifting”127 and there is convincing evidence to support this claim. When
listing the factors involved with the issue of the embargo, one source close
to the government cited America first 128 detailing how “you have to take
American concerns quite seriously…that was a significant factor.”129 Bill
Olner MP, who stresses that “you can’t forget that the USA plays a big
role in this as well”, further supports this.130 Furthermore, at present
concern over America’s response to the embargo lift is at the point where
no further progress can be made without some kind of change in the US’s
stance: “We do want to lift the embargo, but we can’t do it with the
Americans in the way they are, because their retaliation would be
horrible.”131
The reason that the US is such a significant factor, as already
discussed, is because of its relationship with Taiwan. If the arms embargo
were to be lifted, the US would fear an increased sale of arms and European
military technology to China. This demonstrates a lack of trust in the
EU’s system of arms export control, the Code of Conduct, a point that
Salzmann confirms: “They don’t understand how robust or export control
policies and procedures are over here.”132 Consequently, any proposed
lifting of the embargo, if not handled properly, could sour the relations
between the EU and the US: “There could be an EU/US dispute of almost
127
Roy Isbister, interview.
Interview conducted with a source close to the Government 2, July 26, 2005.
129
Interview conducted with a source close to the Government 2, July 26, 2005.
130
Bill Olner, interview.
131
Interview conducted with a source close to the Government 1, July 11, 2005.
132
Brinley Salzmann, interview.
128
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
53
the order of magnitude of Iraq. That is what people in Washington have
indicated.”133 This would hit the UK hardest given their closer ties with
the US not only on a commercial basis, as discussed earlier, but also given
their closer diplomatic and political relations between the two countries.
What is evident is that there is a difference between the way the US views
China and the way the EU does. The Americans are much more concerned
about military advances, and this can be ascribed to their relationship with
Taiwan. However, it can also be ascribed to balance of power concerns
over China’s strengthening economy and increasing modernisation. These
concerns are all too valid according to Mearsheimer. 134 As stated earlier,
China has the potential to rival the US’s powerful position internationally
thus, the US’s anti-lift position may best fit with the containment theories
of the mid 1990s in attempting to block the country’s rise. This contrasts
greatly with the EU’s pursuit of enmeshment and integration discussed
earlier, suggesting that the two actors are operating on different agendas
with regards to China. However, in the real world of diplomatic pressure
these two agendas have clashed and forced the presentation of the policy
to undergo fundamental changes.
In relation to the UK, the significance of US pressure was how it
forced the UK to act within Europe. In the EU Council conclusions of
December 2004, the EU concludes that as a result of lifting the embargo
there must be no quantitative or qualitative increase in arms sales.135 This
clause is an attempt to placate America’s fears that any embargo lift will
cause arms sales to rocket. Although keen to stress that the decision on
this matter, as with all matters in the EU is a decision by the twenty-five
member states collectively, 136 the UK engineered the inclusion of the
clause, since it served its vested interest in keeping the USA at bay. 137 The
escalation of the situation in the Straits into a military conflict is not
something that any country wants to see, but with the EU lacking a
fundamental tie to the situation, its interests in this area are of less
concern. Thus, the clause can best be seen as an effort by the UK to pacify
US fears.
Further evidence of the importance of the US in shaping the UK’s
position was shown when the Chinese passed an anti-secession law against
Taiwan, which in the event of Taiwan claiming any form of independence
133
Interview conducted with a source close to the Government 1, July 11, 2005.
John Mearsheimer, The Tragedy of Great Power Politics (New York: W. W.
Norton, 2001), 337.
135
European Council, “Brussels European Council Presidency Conclusions 16/17
December,” http://ue.eu.int/ueDocs/cms_Data/docs/pressData/en/ec/83 201.pdf (accessed
September 12, 2005), conclusion 57.
136
Interview conducted with a source close to the Government 3, July 28, 2005.
137
Interview conducted with a source close to the Government 1, July 11, 2005.
134
54
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
from mainland China, would allow the use of “non-peaceful means and
other necessary measures to protect China's sovereignty and territorial
integrity.” 138 This blatant reference to the use of force against Taiwan
happened at a sensitive time for the arms embargo discussions and changed
the terms of the debate entirely: “by passing that legislation and that law
the Chinese were actually doing something quite provocative at a quite
stupid time” 139 and the Foreign Secretary Jack Straw admitted that the law
had created “a difficult political environment” for the embargo to be
lifted.140 Here was proof of violent intentions and gave concrete evidence
for the US to back up their concerns about military action. It also gave the
UK an excellent excuse for lowering the ratchet of the debate and easing
the pressure that the role of a bridge between the US and the EU and been
putting upon them: “The anti secession law was good for us. It allowed us
to point to an objective factor out there.” 141 The UK could bow to US
pressure without being overtly seen to be doing so and persuade the rest of
the EU that there was no longer consensus on the issue therefore, it should
be dropped from the agenda.
However, the interesting point to note here is that whilst human
rights had been at the background of the debate within the UK and the EU,
after the passing of the anti-secession law they began to come to the
forefront and an expression of conditionality on human rights grounds for
the lifting of the embargo began to surface. In April 2005, a French
diplomat, when asked if this was the case said, “this link is indeed
beginning to emerge.”142 In May of this year “representatives of the
European Union decided to delay a move to lift the arms embargo against
China, citing human rights”143 and referring specifically to four areas of
concern. 144 In parallel to the EU, Alison Reynolds notes that the first
time the UK Government really began to take the human rights argument
seriously was in April 2005, after the anti-secession law. When Jack Straw
gave evidence to the Quadripartite Committee in January 2005, the
138
Government of the People’s Republic of China, “The Anti Secession Law adopted
at the Third Session of the Tenth National People’s Congress,” (March 14, 2005), Article
8.
139
Interview conducted with a source close to the Government 2, July 26, 2005.
140
BBC News 2005, “EU may delay China arms move, 22nd March,” BBC News,
http://news.bbc.co.uk/2/hi/asia-pacific/4371361.stm (retrieved 31st August 2005),
quoting Jack Straw.
141
Interview conducted with a source close to the Government 1, July 11, 2005.
142
The International Herald Tribune, “EU To Put Brakes on Lifting the EU Arms
Embargo to China,” April 13, 2005 (quoting an anonymous French diplomat)
143
Amnesty International, “People’s Republic of China Briefing on EU Concerns
Regarding Human Rights in China” (London: Amnesty International, September 2, 2005).
144
1. The need for China to release prisoners still held in connection with the events
in Tiananmen Square in 1989 2. The need for the ratification of the International Covenant
on Civil and Political Rights by China 3. The need for reform of China’s ‘re-education
through labour’ system 4. The need to ease media censorship.
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
55
argument for human rights was barely considered at all.145 However, after
the anti-secession law and the climate had changed, human rights began to
be used as a way to back out, with credibility, of the June 2005 deadline for
the lift. This again suggests that human rights alone are not enough to
change the consideration of the UK, but in the face of other external
factors they can be used (and abused) to support a quick reversal in policy
decisions.
The human rights argument had always been present, but the UK had
chosen not to use it to its full force or make any pronounced stance in
relation to it. It was only after the change in the dynamics of the debate,
from the anti-secession law that saw the human rights argument drafted in
to avoid openly admitting the law had created a change of such magnitude.
The Chinese would not repeal the law and so the law itself could not be
cited as an explicit reason for the embargo not being lifted. This would
prevent lifting it in the future. Moreover, explicitly accepting the US’s
anti-lift position would indicate a weakness on the part of the EU in
forming their own foreign policy; a particularly sensitive area given the
ongoing development of the EU’s Common Foreign and Security Policy.
This would be an undesirable outcome for member states and weaken their
position as an effective multilateral body, capable of pursuing their own
goals. Consequently, putting human rights conditionality on China gave
China something they could legitimately work towards and continue
negotiating around, leaving the door open for the embargo to be lifted in
the future, whilst also serving to avoid the EU looking like the US’s
puppet. Human rights were not adopted for their own sake but because, at
this particular conjuncture, they served the EU’s diplomatic and PR needs
in relation to China, the US, the public and its own self-image quite
efficiently.
Overall, the positions of France and Germany directly affected the
way the UK responded to the proposal to lift the embargo and the
political dynamic in the EU meant the UK had little choice but to agree.
The US’s relationship with Taiwan and its concerns over China’s growing
power meant that its involvement in the arms embargo negotiations was
also key and for the UK it was particularly important. They had to
carefully consider their economic and diplomatic ties with both entities
and attempt to bridge the gap between two actors following very different
agendas. Furthermore, the US’s concerns about Taiwan and balance of
power politics directly shaped the way the EU proceeded with the policy
to lift the embargo and this was exemplified by the anti-secession law. The
inclusion of human rights conditionality on the embargo lift after the antisecession law shows once more the use of human rights in an instrumental
145
Alison Reynolds, interview with author, August 16, 2005.
56
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
manner intended to keep the embargo lift on the agenda, avoiding
embarrassment for the EU.
6.
C ONCLUSION
In summary, human rights were of minimal importance to the UK
concerning this policy. The Government showed little regard for these
considerations over and above its need to produce public perception of
inclusion of this element and their use as an instrumental tool. It
manipulated the discourse by invoking different sets of rights, without
providing clear criteria by which to assess its claims. In addition, by
consistently pointing to its bilateral human rights dialogues and
programmes in China it sought to box off its human rights commitments
in respect to China, missing opportunities to exert pressure and failing to
draw a consistent picture of its human rights commitments. Linking this
to its stated ‘ethical’ foreign policy goal, it is hard to see how the UK, in
this instance, managed to maintain any such commitment.
The Government’s indifference to human rights in this instance can
be best explained by two other major factors, which were deemed of more
importance. Firstly, China’s rise necessitates increased international
cooperation and this led to a desire by the EU to give a symbolic gesture,
in the form of the embargo lift, to remove stigmatisation and facilitate its
socialisation. However, this long-term institutional approach should not be
collapsed into suggesting that norms, such as human rights are important
in any simple fashion. States may seek to enmesh China into the
international community and its norms, but this may centre more on
promoting general geo-political and financial stability than causing any
great change in China’s domestic human rights situation. Improvement in
this area may come in the long-term from this kind of approach, as
normative theories argue. However, in this case a sufficiently nuanced
realist framework is far more illuminating for understanding the actions of
the UK.
Secondly, since the UK assumes a bridging role between the EU and
the USA it found itself trapped by its commitments to both and by the
different approaches to China the two actors have. Consequently, the UK
was prevented from making any forthright or strong stance on the issue.
Pressure from the US did drive the UK to act in Europe indicating that the
right level of pressure will force it do so and to do so successfully. Human
rights pressure however, did not serve any instrumental ends for the UK
and so it sought no concessions from China on this front.
The EU is now seeking conditionality, on human rights grounds, but
this is only after the commotion surrounding the passing of the antisecession law and the UK was not instrumental in bringing this point to
bear. This pertinently shows how human rights discourse can become a
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
57
useful resource at the disposal of the West in dealing with rising Asian
powers, which can come into play at specific conjunctures where it is
diplomatically and discursively useful to do so. However, it rarely seems to
ascend beyond this fundamental instrumentality. This is not to say human
rights are always and everywhere irrelevant. This arms embargo is hard to
envisage in the first instance without the human rights norms of global
civil society, but the vociferousness and volubility of civil society on these
issues, in this case, is transient and the geopolitical and economic interests
of the states involved, much less so.
Overall, it seems that despite the Government’s explicit human rights
commitments and the explicit human rights element in this policy debate,
the UK failed to act or assert itself on this basis. The UK is content to
keep human rights isolated into particular arenas, like its bilateral human
rights dialogues with China and refuses to let them significantly shape
wider policy debates, preferring to stick to narrower (though not
necessarily unethical) concerns relating to its interests in geopolitical and
economic stability. In specific relation to China, this seems to suggest that
the UK holds its commercial and political ties with China above its wish to
see the human rights situation improved. The lifting of the EU arms
embargo to China was a perfect opportunity to make a stance on the
internationalist principles of human rights. However, both the UK and the
EU succeeded only in showing how little importance they accord human
rights over and above its instrumental uses. In relation to China, this
bolsters the Chinese opinion that they need do little on human rights and
that their economy and rising profile will win them friends in high places,
regardless of the abuses they perpetuate.
REFERENCES
Abrahmsen, R. and P. Williams. “Ethics and Foreign Policy: The
Antinomies of New Labour’s ‘Third Way’ in Sub-Saharan Africa”
Political Studies 49 (2001): 249-264.
Amnesty International. Undermining Global Security:The EU’s Arms
Exports 2004. London: Amnesty International, 2004.
———. EU Press Office Release, 14 th April. Brussels: Amnesty
International, 2004.
———. Amnesty International Report 2005: The State of the
World’s Human Rights. London: Amnesty International, 2005.
———. People’s Republic of China Briefing on EU Concerns
Regarding Human Rights in China. London: Amnesty International,
September 2, 2005.
Ancram, M. Early Day Motion 1004: Arms Embargo on China (no.2).
London: TSO, 2005.
58
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
Barysch, K., Grant, C. and M. Leonard. “Embracing the Dragon: The EU’s
partnership with China” London: Centre for European Reform, 2005.
BBC News 2005: “EU may delay China arms move, 22 nd March”
http://news.bbc.co.uk/2/hi/asia-pacific/4371361.stm.
Beitz, C. Political Theory and International Relations. Princeton NJ:
Princeton University Press, 1979.
Breslin, S. “Beyond Diplomacy: UK Relations with China since 1997”
British Journal of Politics and International Relations 6, no. 3
(2004): 409-425
Brown, C. International Relations Theory: New Normative Approaches.
Hemel Hempstead: Harvester Wheatsheaf, 1992.
———. “Ethics, Interests and Foreign Policy” In Ethics and Foreign
Policy, Edited by M. Light & K. Smith, 15-32. New York: Cambridge
University Press, 2001.
Bureau of Democracy, Human Rights and Labor. Report on Human Rights
Practices. Washington: US Department of State, 2005.
Carr, E. H. The Twenty Years Crisis 1919-1939: An Introduction to the
Study of International Relations. London: Macmillan, 1964.
Chandler, D. “Rhetoric Without Responsibility: The Attraction of
‘Ethical’ Foreign Policy” British Journal of Politics and International
Relations 5, no. 3 (2003): 295-316.
Cohen, H. Early Day Motion 986: EU Arms Embargo on China. London:
TSO, 2004.
Cook, R. “Human Rights: Making the Difference” Speech given by Robin
Cook to Amnesty International Human Rights Festival, October 16,
1998.
———. “Putting Principle into Practice: The Role of Human Rights in
Foreign Policy” Cambridge Review of International Affairs 15, no. 1
(2002): 45-51.
Defence, Foreign Affairs, International Development and Trade Industry
Committees - Quadripartite Committee (UK). ‘Strategic Export
Controls: HMG’s Annual Report for 2003, Licensing and
Parliamentary Scrutiny.” London: HMSO, 2005.
———. “Oral evidence given by Jack Straw, Q114.” London: HMSO,
January 12, 2005.
Department of European Affairs (UK). “China’s EU Policy Paper,”
http://www.fmprc.gov.cn/eng/wjb/zzjg/xos/dqzzywt/t27708.htm.
Doughty, S. Early Day Motion 630: Arms Embargo on China. London:
TSO, 2005.
Dunne, T and N. Wheeler. “Good International Citizenship: A Third Way
for British Foreign Policy” International Affairs 72, no. 1 (1998):
847-870.
———. “Blair’s Britain: A Force for Good in the World?”
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
59
In Ethics and Foreign Policy edited by M. Light & K. Smith, New
York: Cambridge University Press, 2001.
———. Moral Brittania? Evaluating the Ethical Dimension in Labour’s
Foreign Policy. London: The Foreign Policy Centre, 2004.
European Council. “Brussels European Council Presidency Conclusions
16/17 December,”
http://ue.eu.int/ueDocs/cms_Data/docs/pressData/en/ec/83 201.pdf.
European Parliament. “European Parliaments Fact sheet 6.3.10: China,”
http://www.europarl.eu.int/facts/6_3_10_en.htm.
Finnemore, M. National Interests in International Society. New York:
Cornell University Press, 1996.
Foreign Affairs Committee. Tenth Report: People’s Republic of China.
London: HMSO, 2000.
Foreign Affairs Committee. Human Rights Report 2005. London: HMSO,
2005.
Foreign and Commonwealth Office. Human Rights Report 2005. London:
HMSO, 2005.
Foreign and Commonwealth Office Website. www.fco.gov.uk.
———. “UK Priorities.” FCO,
http://www.fco.gov.uk/servlet/Front?pagename=OpenMarket/Xcelerat
e/ShowPage&c=Page&cid=1007029393465.
———. “Speech of FCO minister, Ian
Pearson.” FCO. July 21, 2005, http://www.fco.gov.uk.
———. “UK Priorities.” FCO.
http://www.fco.gov.uk/servlet/Front?pagename=OpenMarket/Xcelera
e/ShowPage&c=Page&cid=1068716937231#economic.
———. “FCO Strategy.” FCO.
http://www.fco.gov.uk/servlet/Front?pagename=OpenMarket/Xcelera
e/ShowPage&c=Page&cid=1067967903739.
Frost, M. Ethics in International Relations. Cambridge: Cambridge
University Press, 1996.
———. Putting the World to Rights: Britain's Ethical Foreign Policy.
Cambridge Review of International Affairs 12 (1999).
Goldstein, A. “Great Expectations: Interpreting China’s Arrival.”
International Security 22, no. 3 (1997): 36-73.
Government of the People’s Republic of China, “ The (2005) The Anti
Secession Law adopted at the Third Session of the Tenth National
People’s Congress,” March 14, 2005.
Hansard Reporting. ”Bill Rammell MP, Column 1549W pt24,” London:
TSO, November 16, 2004, www.parliament.uk.
———. ”Bill Rammell MP, Column 324 WH,” London: TSO, 25 th
March, 2004, www.parliament.uk.
———. “Bill Rammell MP, Column 1651W pt26,” London: TSO,
12 February, 2004, www.parliament.uk.
60
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
———. “Dr Liam Fox MP, Column 164 pt4,” London: TSO, May
18, 2005, www.parliament.uk.
———. “Bill Rammell MP, Column 337W pt 24,” London: TSO,
March 16, 2005, www.parliament.uk.
———. “Bill Rammell MP, Column 971W pt16,” London: TSO,
February 28, 2005, www.parliament.uk.
———. “ Tom Harris MP, Column 156-157,” London: TSO,
January 25, 2005, www.parliament.uk.
Hill, C. Foreign Policy In The Blair Effect: The Blair Government 19972001, Edited by A. Seldon, 331-353. London: Little, Brown and
Company, 2001.
Hoffman, M. “Normative International Theory: Approaches and Issues in
Groom”, In Contemporary International Relations: A Guide to Theory
Edited by A. R J. and M. Light. London: Pinter Publishers, 1994.
Human Rights Watch. World Report 2005. New York: Human Rights
Watch, 2005.
———. “Open Letter to Tony Blair, Prime Minister:
Recommendations for the upcoming E.U.-China Summit,”
www.hrw.org.uk, August 30, 2005.
Kim, S. “China as a Great” Current History September (1997): 246-251.
———. “China and the United Nations in Economy” In China Joins the
World: Progress and Prospects edited by E & M. Oksenberg, 43-89.
New York: Council on Foreign Relations Press, 1999.
Kingham, T. “Wanted: Ethics in Foreign Policy” Socialist Campaign
Group News 164 (2001).
Kissinger, H. American Foreign Policy 2. New York: W. W. Norton,
1997.
Light, M. & K. Smith, (eds.) Ethics and Foreign Policy. New York:
Cambridge University Press, 2001.
Little, R. and M. Wickham-Jones, M,.(eds.) New Labour’s Foreign Policy:
A New Moral Crusade? Manchester: Manchester University Press,
2000.
Mearsheimer, J. The Tragedy of Great Power Politics. New York: W. W.
Norton, 2001.
Nathan, A. “China and the International Human Rights Regimes in
Economy” in China Joins the World: Progress and Prospects edited
by E. and M. Oksenberg, 136-160. New York: Council on Foreign
Relations Press, 1999.
Oxfam. Lock, Stock and Barrel. Oxford: Oxfam, 2004.
Pei, M. From Reform to Revolution. Cambridge: Harvard University
Press, 1994.
Pope, G. Early Day Motion 891: Arms Embargo in China No. 2.
London: TSO, 2005.
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
61
Rachman, G. Containing China in Washington Quarterly 19, no. 1 (1996):
129-140.
Ross, R.S. “Engagement in US China Policy in Johnston” In Engaging
China: The management of an emerging power edited by A.I.
Johnston and R.S. Ross. London: Routledge, 1999.
Saferworld. Taking Control. London: Saferworld, 2004.
Schweller, R. “Managing the Rise of Great Powers: History and Theory”
In Engaging China: The management of an emerging power edited
by A.I. Johnston and R.S Ross. London: Routledge, 1999.
Segal, G. “East Asia and the constrainment of China” International
Security 20, no. 4 (1996): 107-135.
Shambaugh, D. (ed.) Greater China: The Next Superpower? Oxford:
Oxford University Press, 1995.
———. “Containment or Engagement of China? Calculating Beijing’s
Responses International Security 21, no. 2 (1996): 180-209.
Shimm, J. Weaving the Net: Conditional Engagement with China. New
York: Council on Foreign Relations Press, 1996.
Sutter, R. Why Does China Matter? Washington Quarterly 27, no. 1
(2004): 75-89.
The Guardian. “Labour Drops ‘Ethical Tag’”, September 4, 2000.
———. “Europe Risks Sanctions Over China Arms Sales”, March 3,
2005.
———. “ The Lure of Beijing”, May 25, 2005.
———. “ Tiananmen Review Rejected,” June 7, 2005.
The International Herald Tribune. Don’t Lift the Arms Embargo on
China”, February 23, 2005.
———. “EU To Put Brakes on Lifting the EU Arms
Embargo to China”, April 13, 2005.
The New Statesman. “ The New Statesman Interview”, April 3, 2000.
The Times. “British Arms Firm Will Spurn China If Embargo Ends”,
February 22, 2005.
Tkacik, J. “ The East Asia Security Act: A Step Towards Consensus
Against Arms Sales To China” The Heritage Foundation, 2005.
US Department of State. “Introduction,” US Dept. of State,
http://www.state.gov/g/drl/rls/hrrpt/2004/41586.htm.
Waldron, A. “Deterring China” Co mmentary 100, no. 4 (1995).
Waltz, K. Theory of International Politics. Boston: McGraw Hill, 1979.
Wang, F. and Y. Deng. In the Eyes of the Dragon: China Views the World.
Lanham, MD: Brown & Littlefield, 1999.
Williams, P. “ The Rise and Fall of the ‘Ethical Dimension’: Presentation
and Practice in New Labour’s Foreign Policy” Cambridge Review of
International Affairs 15, no. 1 (2002).
62
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
APPENDIX 1
Copy of the original declaration of the EU arms embargo to China
Presidency Conclusions
European Council
Madrid, 26 and 27 June 1989
Declaration on China
The European Council, recalling the Declaration of the Twelve of June 6,
strongly condemns the brutal repression taking place in China. It expresses
its dismay at the pursuit of executions in spite of all the appeals of the
international community. It solemnly requests the Chinese authorities to
stop the executions and to put an end to the repressive actions against
those who legitimately claim their democratic rights.
The European Council requests the Chinese authorities to respect human
rights and to take into account the hopes for freedom and democracy
deeply felt by the population. It underlines that this is an essential element
for the pursuit of the policy of reforms and openness that has been
supported by the European Community and its Member States.
The Twelve are aware that the recent events have caused great anxiety in
Hong Kong.
In the present circumstances, the European Council thinks it necessary to
adopt the following measures:
•
raising of the issue of human rights in China in the appropriate
international for a; asking for admittance of independent observers
to attend the trials and to visit prisons,
•
interruption by the Member States of the Community of military
cooperation and an embargo on trade in arms with China,
•
suspension of bilateral ministerial and high level contacts,
•
postponement by the Community and its Member States of new
cooperation projects,
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
63
•
reduction of programmes of cultural, scientific and technical
cooperation to only those activities that might maintain a
meaning in the present circumstances,
•
prolongation by the Member States of visas to the Chinese
students who wish it.
Taking into account the climate of uncertainty created in the economic
field by the present policy of the Chinese authorities, the European
Council advocates the postponement of the examination of new requests
for credit insurance and the postponement of the examination of new
credits of the World Bank.
THE DOMESTIC POLITICS OF THAILAND’S
BILATERAL FREE TRADE AGREEMENT POLICY
Pajnapa Pea msilpakulchorn ‡
A BSTRACT
This paper describes and explains do mestic socio-economic actors’
responses to the Thai government’s liberalisation agenda and bilateral
Free Trade Agreements (FTAs) policy. Using the theoretical framework of
domestic politics and internationalisation, the theoretical supposition is
that a country’s exposure to the international market will change domestic
actors’ preferences and will prompt them to respond in such a way that
their preferences can be fulfilled. However, this process of adjusting to new
developments is subject to institutional factors, which will mediate between
actors’ preferences and their ability to organise or form coalitions to
further their agenda. This in turn will determine the pattern of do mestic
political coalitions or align ments that will emerge in response to the
challenge of liberalisation. Findings from Thai experiences both validate
and expose limitations to theories of do mestic trade politics as well as
suggesting new forces and other factors that have to be accounted for, so
that domestic politics of trade in the age of globalisation can be better
understood. It concludes that do mestic trade policy is intricately linked
with the politics of globalisation. Far-reaching impacts of trade
liberalisation in the current international context have resulted in a
political cleavage between supporters of free trade policy, arguing in
terms of econo mic interests and those opposing the policies, who have
based their preferences on the social impacts of trade policy. This political
‡
M.Sc. (International Public Policy), School of Public Policy, University College
London. Contact with questions/comments: pajnapap@yahoo.com.
INTERNATIONAL PUBLIC POLICY REVIEW , vol. 2, no. 1 (May 2006): 74-120.
[ ISSN 1748-5207]
© 2006 by The School of Public Policy, University College London, London, United Kingdom. All rights
reserved.
64
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
65
divide is fundamental and structural both in terms of the international
setting as well as the structure of national politics and the economy.
1.
INTRODUCTION
One of the most significant developments in the international trade
landscape in Asia Pacific since 1998, is the proliferation of bilateral
preferential trading agreements, or Free Trade Agreements (FTAs). 1
Thailand is one of the countries that has been actively pursuing trade
liberalisation through these bilateral trade agreements. FTA policy in
Thailand is gaining attention for its pace, numbers, content and the
implications for the country’s international strategy, as well as its impact
on the domestic sphere.
One of the central concerns in studies of international political
economy is the interaction between international and domestic forces. On
the issue of trade, what goes on in the domestic sphere is intricately linked
with the feasibility of liberalisation in the international trading regime.2
From the opposite direction, a country’s response to international
developments is of crucial importance on the domestic political stage. In
Thailand, the interface between international and domestic forces comes
into full play and turns the FTA policy into a highly controversial issue
garnering widespread interest and provoking intense political debate.
The politicised nature of trade policy is not surprising due to its
redistributive nature. Although economic theory promises welfare gain for
the whole country, gains to some sectors always come at the expense of
others and losers are rarely compensated.3 Without adequate and fair
measures to assist losers, free trade effort by a government can result in
mass protests from disadvantaged groups lacking resources to relocate to
new industries or change occupations. Moreover, as trade liberalisation
today is part of broader and deeper globalisation and anti-globalisation
1
Christopher M. Dent, “The New Economic Bilateralism and Southeast Asia:
Region-Convergent or Region-Divergent?” Institute of Political and Economic
Governance (IPEG) Papers in Global Political Economy, No. 7 (April 2004); John
Ravenhill, “The New Bilateralism in the Asia Pacific, ”Third W orld Quarterly vol. 24,
no. 2 (2003): 299-317 and P.J. Lloyd, “New Regionalism and New Bilateralism in the
Asia-Pacific,” Visiting Researchers Series No. 3, Institute of Southeast Asian Studies
(2002).
2
Dani Rodrik, “Feasible Globalizations,” John F. Kennedy School of Government,
Harvard University (2002) via http://ksghome.harvard.edu/~drodrik/Feasglob.pdf.
3
In economic theory, free trade is expected to create positive net welfare gains in the
country by allowing market forces to encourage the shift of scarce resources from
unproductive activities towards more productive ones. Gains will accrue both to
consumers and those in the already productive sectors. Losers are producers in
unproductive sectors that have been previously shielded from market forces.
66
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
processes, political complications of any government’s free trade policy
are guaranteed.
In the international arena, new trends and developments such as the
entrance of new actors, like NGOs in WTO negotiations, provide a
complex setting for domestic events. In addition, the aggressive agenda of
‘deep’ integration of the current global trading policy 4 points to a need in
understanding the new dynamics of trade politics, which extend into nontraditional space. Participation from the civil society sector generates
debate about the prospect of global governance and the emergence of a
global civil society and also challenges the political viability of economic
integration policy within a country. Concerns for negative consequences
of deeper economic liberalisation and unfair global economic governance
will have political repercussions not only on the global scene but also on
the domestic front.
The enthusiasms and intensities of the politics surrounding FTA
policy provide an interesting framework to question the dynamic and
conflicting forces in Thailand’s current international trade policy.
Moreover, in a democratic society, how a government responds to
international imperatives through appropriately engineered foreign
economic policy, which can satisfy the majority of its constituency, can
have a definitive effect on government viability. Discerning the social,
political and economic forces behind FTAs could give insights into how
domestic societal actors interact with international forces and how policy
makers can pursue FTA with the domestic political support necessary for
such an international undertaking to be successful.
2.
B ACKGROUND
In order to understand the political forces behind Thai government’s
FTA policy, this paper aims to: 1) examine and describe the domestic
politics of free trade agreement policy in Thailand; and 2) explain why
such a pattern of domestic politics emerges.
Domestic politics of trade have many facets and areas of focus.
Oatley 5 distinguishes two approaches to domestic politics of trade: the
‘state-centred approach’ and ‘society-centred approach’. The focus of
this paper is on the society-centered approach, which looks at the
preferences and political responses of societal actors or interest groups.
Therefore, the questions this paper addresses are: how do domestic
interest groups respond to the challenge of trade liberalisation through the
government’s FTA policy and what is the pattern of interest group
4
Rodrik, “Feasible Globalization”, 2.
Thomas Oatley, International Political Economy: Interests and Institutions in the
Global Economy (New York: Pearson-Longman, 2004).
5
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
67
constellation? How do supporting or opposing coalitions emerge and in
what patterns? And why such patterns of political cleavage emerge in
response to the liberalisation challenge.
The analysis will be explanatory but will also contain descriptive
elements. It will rely on both primary and secondary data. The primary
data include governmental documents, policy papers or position papers
from private sector organisations, both economic and non-governmental
organisations (NGOs), newspaper reports etc. The secondary data will be
drawn from journal articles, academic papers, magazine articles, newspaper
articles etc. The scope of this study is not a single FTA but overall FTA
policy. However, it will mainly focus on and draw from the two most
important FTAs, which are the Thailand-US FTA and the Thailand-Japan
FTA.
The paper is organised as follows: the next section (three) discusses
the existing literature on domestic politics and its limitations in remaining
relevant to a new phenomena seen in trade politics. Also in this section,
the theoretical framework that will be used to analyse empirical evidence
will be set out. Section four will provide a basic background on Thailand’s
political economy and Thailand’s FTA policy. Section five will present
empirical evidence of the politics surrounding Thai FTA policy. Section
six will analyse how theories can be used to explain the empirical evidence.
The last section (seven) will then summarise the findings and arguments as
well as drawing some implications for further research and for
policymakers.
3.
EXISTING LITERATURE
Literature on the domestic politics of international trade policy
attempts to identify how domestic interests and institutions shape the
domestic politics of a nation’s international trade policy. The literature
can be categorised into five categories and will be discussed accordingly.
Economic Approaches to Trade Policy Preferences
Early literature, based on economic models, discusses how exposure to
trade shapes the interests and trade policy preferences of economic actors
through changes in incomes. The simple economic welfare analysis
proposes that trade involves transfer of income from previously protected
producers to consumers and it should give rise to a political contest
between producers and consumers. For a more sophisticated analysis, two
economic models are used to show the distributional consequences of trade
and how different societal groups derive trade policy preferences.
68
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
The first model is the Stolper-Samuelson Theorem (factor income
model), based on the Heckscher-Ohlin trade model,6 which concludes that
returns to the owners of abundant resources will rise absolutely and
disproportionately from trade. The logic is that their factors will be used
intensively in the production of goods whose prices will rise from
increasing exports. The returns to owners of scarce resources will fall
absolutely and proportionately, since their factors will be used intensively
in the production of goods whose prices will fall from increasing imports.
Hence, a political cleavage will form between owners of abundant vs. scare
factors, or class conflict will foment between labour and capital regardless
of industry. 7
The second model is the Ricardo-Viner model (or Specific Factor
Model), which predicts sectoral conflict. Because factors cannot be
smoothly reallocated in response to trade (factor immobility
assumption), 8 return to all factors in an industry will be affected by
openness in the same way.9 Therefore, the political cleavage will be
aligned along the boundary between the export-oriented or competitive
sector (free traders) and import-oriented or uncompetitive sectors
(protectionists).
6
The Heckscher-Ohlin model begins with the assumption that factor endowment or
factor proportion will determine a country’s pattern of comparative advantage. A country
will export products that employ its abundant resource relatively intensively in
production while importing products that employ its scare resources relatively
intensively.
7
Robert Gilpin, Global Political Economy: Understanding International Economic
Order (Princeton: Princeton University Press, 2001), 206-207; Jeffrey A. Frieden, and
Ronald Rogowski, “The Impact of International Economy on National Policies: An
Analytical Overview” in Internationalization and Domestic Politics, ed. Robert O.
Keohane, and Helen V. Milner, 37 (Cambridge: Cambridge University Press, 1996);
Oatley, 89; Ronald Rogowski, Commerce and Coalitions: How Trade Affects Domestic
Political Alignments (Princeton: Princeton University Press, 1989), 7.
8
This assumption of factor immobility is set out to contest the assumption of perfect
factor mobility in the Stolper-Samuelson theorem. The Ricardo-Viner model argues that, in
reality, factors are not mobile and once they are employed in a certain industry, they are
specific to that industry so that when an industry is in decline, they cannot, in the short
run, move to a more profitable industry.
9
Oatley, 91-92; Frieden and Rogowski, 38; James E. Alt and Michael Gilligan, ‘The
Political Economy of Trading States: Factor Specificity, Collective Action Problems, and
Domestic Political Institutions’ in International Political Economy: Perspective on
Global Power and Wealth (4 th ed), ed. Jeffry A. Frieden, and David A. Lake, 327 (Boston:
Routledge, 2000).
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
69
Table 1. Two Models of Interest Group Competition over Trade
Policy
The Factor Model
(Heckscher-Ohlin)
The Principal Actors
How Mobile are
Factors of Production?
Winners and Losers
from Trade
Liberalisation
Types of Political
Cleavages
Factors of Production
or Classes
Perfectly Mobile
Across Sectors of the
Economy
Winners: Abundant
Factor
- Capital in
advanced
economies
- Labour in
developing
economies
Losers: Scarce Factor
- Labour in
advanced
economies
- Capital in
developing
economies
Class Cleavages
Advanced Economies:
Protectionist Labour
vs. Liberalising Capital
Developing
Economies:
Protectionist Capital
vs. Liberalising Labour
Source: Adapted from Oatley, 93.
The Specific Factors
Model
(Ricardo-Viner’model)
Industries or Sectors
Immobile Across
Sectors of the
Economy
Winner:
Labour and Capital
Employed in Exportoriented Industries
Loser:
Labour and Capital
Employed in Importcompeting Sectors
Sectoral Cleavages
Protectionist ImportCompeting Industries
vs. Liberalising
Export-Oriented
Industries
Complex Preference Formation and Roles of Institutions
Economic approaches provide an insightful account of political
cleavages by looking at economic benefits as a basis for predicting
different economic groups’ preferences for trade. However, it cannot
70
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
account for more complex patterns of interest configuration or preference
formation. Individuals can belong to several economic and social groups at
the same time and do not form their preferences so straightforwardly. For
example, Oatley 10 discusses how the secondary impact from trade on wider
social and economic groups can influence trade policy preference, 11 and
Jayasuriya12 notes how side payments can offset losers’ negative
preferences.13
Moreover, it has been suggested that focusing on preferences alone is
not sufficient. The way preferences are aggregated also matters in deciding
which preferences can be materialised and how well they will be
represented. The supply side of coalition formation will determine how
preferences in trade policy will be transmitted through political systems
and institutional settings. Two main factors in this transmission process
are, firstly, the problem of collective action and, secondly, the role of
political institutions.14
The collective action problem refers to “the difficulty of mobilising
or organising resources in order to secure a favourable political decision”. 15
If a collective action problem exists, coalitions based on preferences alone
may not be formed. The well-known example of the collective action
problem is how a small number of producers can have strong political
weight to protect their narrow but intense interests compared to a large
number of consumers who stand to gain from trade, but cannot organise
and mobilise support for free trade. Goldstein and Martin 16 observe that
the concentrated benefits of trade barriers and their diffuse costs
contribute to the problem of mobilising pro-free-trade coalitions. Alt and
Gilligan 17 conclude that collective action problem makes it more likely for
sectoral conflict (the Ricardo-Viner model) to form rather than the class
conflict predicted by Stolper-Samuelson model.18
10
Oatley, 127-128
Ibid.
12
Kanishka Jayasuriya, ‘Embedded Mercantilism and Open Regionalism: the Crisis
of Regional Political Project’.Third World Quarterly vol. 24, no. 2 (2003): 346
13
Jayasuriya (2003), 346 argues that because interests from liberalization will be
accrued to the tradable sector of the economy, the tradable sector can offset political
opposition from losers in non-tradable sectors by giving them side payments and this
pattern of compensation was evident in the Southeast Asian politics of liberalization.
14
Oatley, 94-99; Frieden and Rogowski; Alt and Gilligan, 27.
15
Alt and Gilligan, 336.
16
Judith Goldstein and Lisa L. Martin, ‘Legalization, Trade Liberalization, and
Domestic Politics: A Cautionary Note’, International Organization vol. 54, no. 3
(2000): 609.
17
Alt and Gilligan.
18
This is because factor mobility has direct effects on the possibility of collective
action. Mobility disperses the benefits of trade policy across owners of a particular factor.
This leads to the problem of non-excludability and free-riding because the benefits of
11
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
71
Institutional factors also matter in trade politics because they allow
actors to resist or promote change by facilitating the organisation of
groups to advance their policy preferences. Institutions are adopted as an
intervening variable in the study of internationalisation and domestic
politics in the volume edited by Keohane and Milner. 19
Globalisation: New Actors and New Issues in Trade Politics
In the globalisation context, the landscape of trade politics has
transformed, thus rendering analyses focusing on economic issues/actors
alone as being too limited. Hocking20 demonstrates the changing nature of
trade politics due to the emergence of new issues (e.g. the environment,
labour, intellectual property, national sovereignty etc.) and new actors,
specifically NGOs, whose concerns “now firmly impinge on the trade
politics agenda”. 21 This transformation of trade politics where actors are
driven not by economic calculation but by social and political values has
not yet received much attention in the study of the domestic politics of
trade, but it is emerging elsewhere. Solingen 22 uses a coalitional perspective
to explain international behaviour at the regional level of the Association
of Southeast Asian Nations (ASEAN) and points out that actors forming
the coalitions can come from a diverse range of economic and social
groups. This is because “internationalisation (or economic liberalisation)
does not merely pose threats to material interests, but also to cultures,
identities and values”.23
The growing importance of NGOs in trade politics is also gaining
more attention. The debate on the legitimacy of the WTO and the
pattern of participation by NGOs in the WTO negotiating process also
exemplifies this change at the global level. 24
lobbying can easily be enjoyed by non-participants. But if a factor is immobile, the
benefits of lobbying will accrue only to specific factors employed in that particular
industry. See Alt and Gilligan, 336-337.
19
Robert O Keohane,. and Helen V. Milner, ‘Internationalization and Domestic
Politics: An Introduction’ in Internationalization and Domestic Politics, ed. Robert O.
Keohane, and Helen V. Milner (Cambridge: Cambridge University Press, 1996).
20
Brian Hocking, ‘Trade Politics: Environments, Agendas and Processes’ in, Trade
Politics: International, Domestic and Regional Perspectives, ed. Brian Hocking and
Steven McGuire, (London: Routledge, 1999).
21
Hocking, 2.
22
Etel Solingen, ‘ASEAN, Quo Vadis? Domestic Coalitions and Regional
Cooperation’ Contemporary Southeast Asia vol. 21, no. 1 (1999): pp30-53.
23
Ibid, 32.
24
see for example: Daniel C Esty, ‘The World Trade Organization’s Legitimacy
Crisis’ World Trade Review vol. 1, no. 1 (2002): 7-22; David Henderson, ‘WTO 2002:
Imaginary Crisis, Real Problems’ World Trade Review vol. 1, no. 3 (2002): pp277-296;
Andrew H. Charlton and Joseph Stiglitz, ‘Common Values for the Development Round’
72
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
In parallel with new actors, new issues25 in the international trade
agenda have also contributed to the emergence of new forces in trade
politics.26 The main characteristic of these new issues is that they will
reach more deeply into national institutional arrangements and
communities than older border measures like tariffs implying large
political repercussions.27 As trade politics are rooted in the growing
integration of the global economy, 28 it is necessary to consider the sources
of the preferences of economic and social actors, not just from changing
relative prices due to exposure to trade, but also from the content and
rules of the international economic order that will affect national
regulatory regimes, national economic and social practices, as well as
cultures and values.
Historical and Regional/Country-Specific Perspectives
The treatment of preferences and institutions can be analytically
rigorous as a theoretical framework, but it should be complemented by the
political economy literature, which looks at how particular patterns of
economic interests and institutions affect the politics of trade policy in
specific national settings. In relation to the case of Thailand, literature on
the domestic politics of economic liberalisation in Southeast Asia paint a
distinctive picture of the politics of liberalisation in the region because of
its unique combination of economic interests, the political influence of
interest groups, and political systems. 29 Traditionally, studies usually
assume a unitary character of Southeast Asian states in carrying out
(2004). Via
http://www1.gsb.columbia.edu/faculty/jstiglitz/download/website/Common_Values_for_
the_Development_Round.htm; Bernard Hoekman and Michel Kostecki, The Political
Economy of the World Trading System: WTO and Beyond (2 nd ed.) (Oxford: Oxford
University Press, 2001), 69-72.
25
The new trade agenda includes the three new issues included in the Uruguay
Round which are: intellectual Property Rights (the Agreement on Trade-related Aspects of
Intellectual Property Rights -TRIPS); investment (the agreement on Trade-related
Investment Measures – TRIMS); and services (the General Agreement on Trade in Services
- GATS) as well as emerging issues such as environmental and labour standards, human
rights, competition policy etc.
26
Hocking, 8; Gilpin, 2255-231; Dani Rodrik, “Has Globalization Gone Too Far?”
(Washington D.C.: Institute of International Economics, 1997), 5.
27
Hocking, 8; Rodrik, “Feasible Globalization?” and Rodrik, “ Has Globalization
Gone Too Far?”
28
Rodrik, “Feasible Globalization?”; Hocking.
29
See for example Jayasuriya; Alasdair Bowie and Danny Unger, The Politics of
Open Economies: Indonesia, Malaysia, the Philippines and Thailand (Cambridge:
Cambridge University Press, 1997).
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
73
government-led trade policies30 and are oriented toward the state-centred
approach to trade policy rather than the society-centred approach which
assumes high level of economic pluralism. However, recent studies suggest
that there is a significant political divide in liberalisation policy and the
competing forces of anti-liberalisation and pro-liberalisation are likely to
have a significant impact on theses countries’ liberalisation agendas in the
future. 31
Domestic Politics of Bilateral Trade Liberalisation
Literature on the domestic politics of trade discussed above is usually
discussed generally in terms of ‘free trade’ versus ‘protection’. However,
on many occasions, trade policy is specific and might vary in terms of the
content, pattern and level of economic liberalisation that could have a
distinctive impact on domestic interests and subsequent political
alignment. Studies identify different patterns of political responses specific
to bilateral free trade agreements. Ravenhill32 argues that by allowing for
liberalisation to be completed separately, sector by sector, a bilateral free
trade agreement is expected to gain business support more easily because it
inflicts minimal pain on uncompetitive sectors while allowing those
industries, which are internationally competitive, to pursue their interests
with negotiating partners. Baldwin 33 believes that preferential trading
arrangements will gain domestic support from exporters trying to alleviate
the discriminatory effects of such policies in foreign markets. Grossman
and Helpman 34 identify the political conditions necessary for FTAs to be
politically viable. These conditions are: when a negotiated deal can
generate substantial welfare gains for the average voter and adversely
affected groups fail to mobilise; or when agreement can create gains for
exporters in excess of the losses to be suffered by import-competing
groups plus the welfare harm to the average voter. In addition, if some
industries can be excluded from an FTA, the prospects of an agreement
will improve.
By looking at the case of Thailand, where the challenges are evident,
this paper aims to contribute to an understanding of the new challenges in
the politics of economic liberalisation present in the climate of
globalisation. It will do this by critically examining the utility of the
existing approaches, as well as exploring and furthering the understanding
30
Ravenhill, 303.
Ibid. 303.
32
Ibid. 303, 307.
33
Baldwin in Ravenhill, 313.
34
Gene M. Grossman and Elhanan Helpman, “The Politics of Free Trade
Agreements,” The American Economic Review, vol. 85, no. 4 (1995): 667-690.
31
74
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
of domestic politics in areas that are still in their early development.
Selecting Thailand as a case study should contribute to a better
understanding of the domestic politics of trade in developing countries.
This will depart from the detailed discussions in the existing literature,
which have focused mainly on developed countries.
4.
THEORETICAL FRAMEWORK
As mentioned above, the theoretical framework used here will be the
society-centred approach to trade policy. This approach is based on the
assumption that policy formation corresponds to a model of pluralistic
government, where social forces exert their influence during the policy
process.35 The theoretical foundation of this approach is based on
Gourevitch 36 who argues that there are international sources of domestic
politics37 and that the effects of the international system on domestic
politics can result in a range of outcomes, one of which involves coalition
patterns that incorporate social forces and the political relationships
among these coalitions. This effect is important because there is conflict
among powerful groups themselves. Gourevitch 38 observes that the need to
secure support for policy will always affect its final content. There is,
thus, a need for coalitional analysis to investigate the content of group
interests and the efforts to form alliances among them. 39
To conduct this analysis, the theoretical framework used in this paper
is based loosely on the analytical framework of internationalisation and
domestic politics advanced by Frieden and Rogowski and Garrett and
Lange40 . This begins the analysis of domestic politics of
internationalisation by looking at: 1) how internationalisation affects the
policy preferences of domestic actors and 2) how preferences are
aggregated or filtered through a political system to form political
coalitions so that political cleavages can be observed.
35
Peter Gourevitch, “The Second Image Reversed: The International Sources of
Domestic Politics,” International Organization vol. 32, no. 4 (1978): 902.
36
Ibid.
37
Gourevitch attempts to forge a new conceptual linkage between domestic and
international politics beyond the traditional focus on either: 1) using the international
system to explain domestic politics or 2) using domestic politics to explain the
international system. He argues instead that the international system is not only a
consequence of domestic politics but also a cause of them.
38
Ibid, 903.
39
Ibid, 907.
40
Frieden and Rogowski; Geoffrey Garrett and Peter Lange, “Internationalization,
Institutions, and Political Change” in Internationalization and Domestic Politics, ed.
Robert O. Keohane and Helen V. Milner (Cambridge: Cambridge University Press, 1996).
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
75
Trade Policy Preferences
The theoretical framework begins with the linkage between FTA
policy, and the potential effects of economic liberalisation, which are the
source of actors’ trade policy preferences. In the case of Thailand, as in
most developing economies, the economy is characterised by relative
abundance of labour and a relative scarcity of capital. According to the
Heckscher-Ohlin model/Stolper-Samuelson theorem, 41 free trade policy in
Thailand should enable labour to reap most benefits from expanding trade
opportunities and they should rally to support FTA policy while business
or capitalists will lobby against the policy. Alternatively, according to
Ricardo-Viner model,42 FTA policy should lead to politics characterised by
export-oriented sectors supporting FTA policy while the voice of
opposition will come from import-competing sectors.
Institutional Roles
Understanding social responses by concentrating on preferences alone
rests on the implicit assumption of economic pluralism where
constellations of economic preferences will be automatically reflected and
represented in the national political arena. 43 Trade policy preferences, like
other policy preferences, are not always automatically transformed into
political demands44 and not all groups that are potentially affected by
trade will lobby the government to advance their preferences. Because
“the ability of actors sharing common interests to overcome collective
action problem is critical to their effective political capacity, and
institutions can play important roles in facilitating collective action”, 45
institutional analysis is used here to examine how institutional settings can
mediate between preferences and political activities in response to FTAs.
Institutions act as a mediating factor because they can insert a structural
effect on the process of coalition formation and the pattern of political
cleavages by “rewarding or punishing specific groups, interests, visions and
persons”,46 and “affecting the extent to which political actors can impose
its views and the possibility of realising certain policies”.47
The incorporation of the role of institutions will extend mostly to
‘socio-economic institutions’ because they are more relevant to the study
of the role of interest groups which are the unit of analysis here, while
41
Frieden and Rogowski, 38.
Ibid.
43
Garrett and Lange, 49.
44
Oatley, 94.
45
Frieden and Rogowski quoted in Garrett and Lange, 53.
46
Gourevitch, 904.
47
Ibid.
42
76
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
formal political institutions (e.g. the electoral system) will be attended to
only when it can contribute answers.
While Garrett and Lange48 examine the extent to which institutions
mediate the preferences of actors and policy outco mes, due to the scope of
this study the theoretical framework adopted here will focus on the role of
institutions as structural factors that mediate between preferences of actors
and the formation of political coalitions. That is, how institutions can
help to explain the pattern of political coalitions surrounding the politics
of FTA policy and not the influence groups have on the final negotiation
of FTA.
5.
THAILAND ’S POLITICAL ECONOMY: A H ISTORICAL PERSPECTIVE
Economic Transformation
Thailand’s economic development is considered a success story by
international standards. The Thai economic structure has been
transformed from a traditional agrarian-based economy to an
internationally-oriented industrialised economy in the space of fifty
years.49 Thailand’s modern political economy and industrialisation went
through two broad phases; import substitution industrialisation (ISI) and
export-oriented industrialisation (EOI).
ISI in Thailand began in the 1950s. Before this, Thailand’s economy
and its relationship with the international economy revolved around
agricultural commodity exports such as rice. Under an authoritarian
political system and with support from the US and the World Bank, 50 the
military government attempted to legitimise its rule through economic
growth by means of economic development led by the private sector and
industrialisation. 51 Following this, the ISI regime, composed of investment
incentives to foreign and domestic investors and protective barriers,52 was
initiated. During this period, manufacturing’s contribution to GDP rose
significantly. 53
Although the ISI regime was successful in setting Thailand on the path
of industrialisation, its capacity to drive long-term growth became less
48
Garrett and Lange.
Thailand is the world’s 23rd largest exporter and exports and imports account for
about half of the country’s GDP. In 2003, Thailand’s exports hit US$80.23 billion
(Bt3.33 trillion).
50
Kewin Hewison, “Thailand’s Capitalism Before and After the Economic Crisis” in
Politics and Markets in the Wake of the Asia Crisis, ed. Richard Robinson, Mark Beeson,
Kanishka Jayasuriya and Hyuk-Rae Kim, 196 (London: Routledge, 2000).
51
Danny Unger, Building Social Capital in Thailand: Fibres, Finance, and
Infrastructure (Cambridge: Cambridge University Press, 1998), 61.
52
Hewison, “Thailand’s Capitalism Before and After the Economic Crisis”, 197.
53
Ibid.
49
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
77
certain by the 1970s.54 Factors such as a domestic economic slowdown,
deteriorating profitability, the exhaustion of domestic demand and
fluctuating prices of agricultural commodity exports pushed bankers,
businessmen and technocrats from the state’s planning and development
agencies to pressure the government to replace ISI with EOI. 55 However,
forces resisting liberalisation remained among protected industries and in
the Ministry of Finance, which feared a diminished ability to collect state
revenue. It was not until the 1980s that a major shift toward EOI was
made possible by series of external shocks due to high energy prices and
deteriorating prices for commodity exports. The subsequent global
recession exposed the country’s accumulated weaknesses further and
rendered the economy highly vulnerable to external shocks. Business
attempted to restore profitability by expanding export capacities56 and
kept pressing the government for more support for exports. 57 In parallel
with these developments, the devaluation of the Thai baht in 1984 and
appreciation of the Japanese yen in 1985 meant that Thai goods became
more competitive in the world market. These events triggered a major
reorientation of the Thai economy and by the mid 1980s the government
became fully committed to an EOI strategy in the pursuit of economic
reform. 58
The shift toward EOI paved way for the future boom years in the
period from 1985 until the 1997 crisis.59 Besides economic growth, there
are two real implications of the boom years. The first is the structural
transformation of the economy, which mainstreamed the manufacturing
and service sectors while the agricultural sector became marginalised60 .
The second is the deeper integration of the Thai economy in the
international economy. Moreover, a structural shift of the economy
resulted in a shift in the significance of exports in contributing to
economic growth and changing the pattern of export performance.
54
Hewison, “Thailand’s Capitalism Before and After the Economic Crisis”, 197;
Pasuk Phongpaichit and Chris Baker, Thailand: Economy and Politics (2n Ed.) (Kuala
Lumpur: Oxford University Press, 2002), 147-156.
55
Phongpaichit and Baker, “Thailand: Economy and Politics,” 147, 154.
56
Unger, 67.
57
Phongpaichit and Baker, “Thailand: Economy and Politics,” 154.
58
Ibid.
59
The rate of real GDP growth in Thailand surged to double-digits in 1988 and this
was maintained until 1990. In the period 1987-1995, the Thai economy never experienced
real GDP growth of less than eight percent. In 1997, Thailand was the first country affected
by the Asian Financial crisis to devalue its currency. The crisis led the country into a
distressing economic recession.
60
In 1960, agriculture accounted for around 40 percent of GDP as well as being the
major contributor to exports and employment. With rapid industrialisation, manufactured
exports grew from 1 percent of total exports in 1960 to 80 percent by the mid 1990s (see
Hewison, “Thailand’s Capitalist Development and the State,” 198).
78
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
Thailand’s comparative advantage in early industrialisation lay in
agricultural exports and labour-intensive industrial goods such as textiles
and garments. 61 As industrial development matures, Thailand has begun to
develop competitiveness in medium-high-technology goods such as
computer accessories, electronic parts and products, and motor vehicle
parts.62 In 2004, the share of manufacturing in export was 85.8 percent
while the share of agricultural exports was 10.7 percent. Thailand’s top
export products are electrical machinery, motor vehicles, food-processing
products and garments and textiles.
Foreign direct investment (FDI) was one of the engines of the boom
and one of the foundations of the structural transformation of the
economy as appreciation of the yen brought in massive flows of Japanese
FDI. 63 This was especially directed towards the auto, electronics and
electrical industries. FDI continues to be an important source of growth,
employment, technological transfer and economic upgrading.64 Japanese
investors are the largest investors in the Thai economy followed by the
United States with most of the investment concentrated in manufacturing
and service sectors. International trade, exports and FDI, therefore, are
the pillars that define the country’s international economic strategy.
Political and Social Transformation
Economic transformation also brought about a remarkable socioeconomic transformation. Thailand’s capitalist transformation gave rise
to a domestic capitalist class, which mostly had roots in the banking
sector, but continued to expand and diversify into other sectors.65 New
waves of the capitalist classes from the media, communications,
electronics, manufacturing, retailing, and finance and securities began to
emerge and gain more influence in the economy. 66 Although the Thai
economy is market-driven and highly internationalised, the distinctive
feature of it is still one of strong clientelistic links between business and
61
The Economist, “Country Briefings: Thailand,” www.economist.com (accessed
July, 2005).
62
Ibid.; Richard F. Doner and Ansil Ramsay, “The Challenges of Economic
Upgrading in Liberalizing Thailand” in States in the Global Economy: Bringing
Domestic Institutions Back In, ed. Linda Weiss, 127 (Cambridge: Cambridge University
Press, 2003). By 1995, the export value of medium-high-technology products was 40
percent greater than labour-intensive goods (Chalongphob, 7 in Doner and Ramsay, “The
Challenge of Economic Upgrading in Liberalising Thailand,” 127).
63
Pongpaichit and Baker, “Thailand: Economy and Politics,” 159.
64
At the end of 2003, the cumulative level of FDI in Thailand was around $31
billion.
65
Hewison, “Thailand’s Capitalism Before and After the Economic Crisis,” 199.
66
Ibid.
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
79
politics.67 Macintyre 68 relates the clienteslistic feature of the Thai
political economy (as with other countries in Southeast Asia) to the fact
that the business community is made up of people of Chinese descent who,
due to indigenous resentment, seek to avoid high profile collective
political action and rely instead on a more covert form of political
representation provided by clientelism. The replacement of the
authoritarian regime by electoral politics also forged new alliances between
business and elected politicians.69 Nevertheless, political democratisation
has also created political space for a diverse range of social groups to take
more active roles in national politics. Organised groups among business
people were established to participate more actively in economic policymaking.70 Other social groups mobilising on issues such as community and
village livelihoods, rural movement, environmental protection, natural
resource management, alternative development, gender etc., have
increasingly penetrated and provided counterbalancing forces to
mainstream politics. These social movements represented the emergence
of civil society, which has become a significant social force in
contemporary politics in Thailand.71
6.
C HALLENGES OF TRADE/ECONOMIC LIBERALISATION: THAILAND ’S
FTA POLICY
In order to conceptualise the linkage between FTA policy and the
political responses from social groups, this section will discuss some key
features of Thailand’s FTA policy and its implications for economic and
trade liberalisation.
Since 2003, the government of Thailand under the leadership of
Prime Minister Thaksin Shinawatra, has adopted bilateral FTAs as one of
the centrepieces of Thai international economic policy and significant
progress has been made with five agreements signed and five more are
under negotiation (see table 2).
67
Andrew MacIntyre, “Business, Government and Development: Northeast and
Southeast Asian Comparisons” in Business and Government in Industrializing Asia, ed.
Andrew MacIntyre (New South Wales: Allen and Unwin, 1994); Pongpaichit and Baker,
“Thailand: Economy and Politics.”
68
Macintyre.
69
Hewison, “Thailand’s Capitalism Before and After the Economic Crisis,” 200.
70
Macintyre.
71
Phongpaichit and Baker, “Thailand: Economy and Politics,” 385-413; Unger.
80
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
Table 2. Thailand’s Free Trade Agreem ents
Thailand’s Free Trade Agreements as of June, 2005
Agreements Signed
China, India, Bahrain, Australia and New
Zealand
Agreements Under
US, Japan, Peru, BIMSTEC (Bangladesh, India,
Negotiations
Myanmar, Sri Lanka, Phutan, Nepal and
Thailand), and the EFTA (the European Free
Trade Association which includes Switzerland,
Norway, Iceland and Liechtenstein)
Source: Thai Ministry of Commerce
The Thai government’s FTA policy is often justified by three main
reasons:
• FTAs can accelerate the process of trade liberalisation, given the slow
progress of the WTO. Because FTAs are negotiated between two
partners, it can provide flexibility as well as advancing liberalisation in
the sector of strong interest for the country. 72
• FTA policy is vital in maintaining the competitiveness of Thai
exports in existing markets (US, Japan and ASEAN) and potential
markets (China, India and etc.).
• FTA policy is instrumental in attracting FDI and placing Thailand as a
regional trade and investment hub.73
While the government usually validates FTA policy on these grounds,
political motives behind FTAs are commonly recognised, especially in the
case of the Thailand-US FTA. This is of strategic significance for both
countries given that Thailand is a key military ally with the US74 and the
relationship with the US remains strategic in Thailand’s security
equation. 75
Traditional features of free trade agreements are the reduction and
elimination of tariff and non-tariff barriers between two negotiating
72
Thaksin Shinawatra (in Thai), “Free Trade Agreement: Opportunities for
Business,” Keynote Speech by Prime Minister Thaksin Shinawatra, February 19th, 2004 at
the Federation of Thai Industries’ Seminar on Free Trade Agreements, UNESCAP (2004);
Dent, 5.
73
Shinawatra; Fumio Nagai, “Thailand’s Trade Policy: WTO plus FTA?” IDE
APEC Study Centre, Working Paper Series 01/02-No.6, APEC Study Centre, Institute of
Developing Economies (2002), 12.
74
Thailand provided support on the US war on terrorism and also sent troops to Iraq.
75
Richard E. Feinberg, “The Political Economy of United States’ Free Trade
Agreements,” Graduate School of International Relations and Pacific Studies, University
of California, Sandiego (2003); USTR (United States Trade Representative), ‘Letter to
House of Representatives on Intent to Negotiate FTA with Thailand’, USTR (2004) at
www.ustr.gov and USTR (United States Trade Representative), “ Letter to Senate on Intent
to Negotiate FTA with Thailand,” USTR (2004) at www.ustr.gov.
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
81
partners and the major challenge it will bring to the domestic economy in
the freer flow of goods and changes in relative prices between domestic
and foreign goods. However, the current wave of ‘new age FTAs’ will take
the form of comprehensive agreements 76 expanding the scope of trade
agreements beyond trade in goods to include new trade issues such as
intellectual property rights, service liberalisation, investment,
environment and labour issues etc., and sometimes by committing
negotiating partners beyond the existing WTO regime (or being ‘WTOplus’). For comprehensive agreements, the implications of economic
liberalisation include possible changes in the domestic regulatory regime.
For example, if Thailand agrees to the US demand for more stringent
protection of intellectual property, Thailand will have to upgrade its
domestic intellectual property laws to the US standard. Overall, it can be
said that the challenge generated by FTA policy is the challenge of
wholesale economic liberalisation, change in domestic commercial
practices and deepening economic integration within the international
economy.
Although Thailand is pursuing many FTAs simultaneously, the FTAs
that would have major impacts on the country and have commanded
intense public interests are the Thailand-Japan FTA and the Thailand-US
FTA and they will be discussed briefly here.
The Thailand-Japan FTA is classified as a partnership agreement with
negotiations covering a wide range of issues from trade barrier reduction,
investment, and services as well as other areas of economic cooperation
including industrial development. 77 The main interest for Thailand is the
opening up of Japan’s highly protected agricultural sectors, e.g. rice,
chicken, sugar and fisheries,78 while Japan’s main aim is getting market
access to the Thai industrial sector, particularly the electrical, auto and
steel sectors. Thus, the major domestic impact from the Thailand-Japan
FTA is trade liberalisation in Thailand’s industrial sector.
The Thailand-US FTA is a comprehensive agreement meaning that
the agreement will specify timing and conditionalities, which are binding
for each party. 79 The main goals of the agreement identified by the United
States Trade Representatives (USTR) include open market access for US
76
J.R. Ponciano Intal, “Bilateral and Multilateral Trade Negotiations and Business,”
Paper prepared for ‘Business for Development’ Conference hosted by Department of Trade
and International Trade Center, 21-22 October, 2004, Philippine Trade Training Center,
Manila (2004).
77
Narongchai Akrasanee, “The FTA Architecture of Thailand,” Presentation at
Pacific Economic Cooperation Council (PECC) Trade Forum Meeting 22 nd-25 th May, 2005,
Jeju Island, Korea; Narongchai Akrasanee is the Chairman of the government’s FTA
Monitoring Committee.
78
Ibid.
79
Ibid.
82
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
agricultural producers, the protection of intellectual property rights and
upgrading Thai labour and environmental standards.80 Other issues
normally included by the United States in FTAs with other countries, such
as government procurement, competition policy, service, investment, and
custom procedures are likely to be negotiated as well. The Thailand-US
FTA is bound to be legalistic in nature as much of the US agenda, from
intellectual property rights to government procurement, would require
negotiating partners to make changes to domestic law.
Empirical Evidence: the Domestic Politics of Thailand’s FTA Policy
Examining the social and political responses to the challenge of
economic liberalisation presented by FTA policy in Thailand, there are
two main political coalitions that have emerged: an economic coalition
and a social/political coalition. Each will be discussed in turn.
7.
THE ECONOMIC COALITION
The main economic actors in Thailand’s economic policy-making are
the three main business associations consisting of the Thai Chamber of
Commerce (TCC), the Federation of Thai Industries (FTI) and the
Bankers’ Association. However because financial liberalisation is beyond
the scope of this study, the opinions of the Banker’s Association, which
mostly concern the financial sector, will not be presented here. Since the
government established and incorporated these three institutions into a
regular government-business consultative system in the 1980s, these
associations have remained the voice of the business community in
national policymaking whose demands and opinions are heard by the
government, and feature prominently in the press.81
Generally, business has shown support for the reasoning behind FTAs
in line with the government. This concentrates on the benefits to Thai
exports, complementing the slow WTO process and maintaining the
competitiveness of Thai products in the world market. In a speech, the
Chairman of the FTI clearly stated that “the private sector understands
and supports the government’s move (i.e. FTA policy) to maintain Thai
competitiveness and ensure advantage over competitors for Thai products
80
USTR, “Letter to the House of Representatives on Intent to Negotiate FTA with
Thailand” and USTR, “Letter to Senate on Intent to Negotiate FTA with Thailand.”
81
Anek Laothamatas, “From Clientelism to Partnership: Business-Government
Relations in Thailand” in Business and Government in Industrializing Asia, ed. Andrew
MacIntyre (New South Wales: Allen and Unwin, 1994); Medhi Krongkaew, “The
Economics of Institutional Change: Making Economic Policy in Thailand” in Institutions
and Economic Change in Southeast Asia: the Context of Development from the 1960s to
the 1990s, ed. Colin Barlow and Edward Elgar (UK: Cheltenham, 1999).
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
83
in key markets”.82 Moreover, he also pointed out the merits of
comprehensive FTAs, stating that “many FTAs that Thailand is
negotiating will be comprehensive and this will be a good starting point to
create and deepen mutually beneficial relationships between Thailand and
its trading partners”.83 The leading figure in the TCC showed similar
support commenting that “Dr. Somkid (Deputy Prime Minister in charge
of FTA policy) has assured us about positive results from the FTAs, so
we'll go ahead”.84 The economic coalition also includes support from other
leading economic and business figures outside formal business
representation, emphasising the benefits from the economic side of free
trade. One prominent economist in Thailand summed up that: “It’s hard
to argue against the economic benefits of FTA. But because of their social
and political impacts, FTAs will always be a controversial issue in any
country”. 85 Other economists also support the trade liberalisation policy
in principle, but still remain skeptical about the benefits from the pact in
reality, which depend on the government’s commitment and ability to
extract benefits from the negotiations.86
Although businesses tend to be supportive of the government’s overall
attempt to liberalise the economy, they also strongly opposed the FTA if
it directly threatens their interests. Strong business resistance from
import-competing sectors was evident with the Thailand-Japan FTA.
Political alignment opposing the deal was found among local steel
producers, local auto parts producers and non-Japanese carmakers.
Domestic steel producers protested that opening the domestic market to
Japanese producers would be unfair considering the fact that the Japanese
steel industry had been developed far longer than the Thai industry, with
heavy subsidies from the Japanese government 87 and demanded a longer
adjustment period than Japan had requested. The TCC and the FTI joined
forces to organise a joint press conference to criticise the government for
considering ending tariffs on Japanese hot-rolled steel imports and insisted
that protection was needed in order to avoid the Thai industry being
controlled by Japan and the whole country suffering from an increased
trade deficit caused by a flood of Japanese imports. 88
82
Speech delivered by the Chairman of the Federation of Thai Industries at the ‘Free
Trade Agreements: Opportunities for Business’ seminar at Bangkok, February, 2004.
Author’s translation.
83
Ibid.
84
Ibid.
85
Pichaya Changsorn and Usanee Mongkolporn, “No Running Away from FTAs,”
The Nation, April 2, 2004.
86
Jeerawat Na Thalang, “Advice From Economists: Focus FTAs on Major Markets,”
The Nation, September 25, 2004.
87
Busrin Treerapongpichit, “Local Manufacturers Cry Foul over Change in Stance on
Steel,” Bangkok Post, April 4, 2005.
88
The Nation, “Furore over Steel ‘Cave-in’”, April 5, 2005.
84
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
The prospect of cutting tariffs on completely built-up (CBU)
automobiles and car components under the Thailand-Japan FTA also
raised strong concerns among domestic car component manufacturers.
The Thai Auto Parts Manufacturers Association has petitioned the Prime
Minister and related ministers to exclude autos and parts from the FTA
framework, fearing that removing import tariffs on CBU cars and parts
would result in lower demand for locally made products and customers
shifting to consume imported instead of locally assembled cars. This will
also reduce incentives for Japanese automakers to expand local production
facilities, which would have hurt the overall development of the industry.
Domestic auto parts producers also saw their interest in protecting the
domestic auto industry aligned with the interests of American and
European automakers. This was because opening up the car market to
Japan would give significant price competitiveness to imported Japanese
cars and, in effect, discriminate against European and American cars. One
representative from Europe quickly aligned their interests with the
domestic auto parts producers warning that, “Any action that could
minimise the significance of the auto-parts production industry, through
the import of ready-built cars needs to be very carefully considered. The
decision relates to such an important issue that it should not be rushed
into”. 89
Besides potential losers in import-competing sectors, dissatisfaction
also increased even from potential winners in the export sector when it
became likely that the negotiation would not grant benefits to possible
Thai products as much as had been hoped for. For instance, business
showed great disappointment with the Japanese market access offered to
Thai farm products, when the government caved in to
Japanese insistence on excluding rice from the talks.
8.
THE SOCIAL/POLITICAL COALITION
FTAs have become a hotly debated issue in Thailand since 2004 when
negative impacts from concluded agreements were deeply felt among
farmers. The consequences caused concern when significant progress had
been made in FTAs with the United States and Japan. Outside the business
circle, the government’s FTA policy has generated strong negative
responses from diverse social groups. Opposition to FTA policy comes
from NGOs/activists dealing with issues ranging from rural development,
AIDS and access to drugs, consumer protection, intellectual property and
sustainable farming, as well as from academics, senators, opposition
politicians and parts of the private sector. The most formal and
89
Comment made by BMW Group (Thailand). See The Nation, “Thai-Japan FTA
Talks: Warning from Carmakers,” April 8, 2005.
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
85
systematic coalition to rally against FTA was initially formed by NGOs
under the name ‘FTA Watch’ and came to find increasing support from
such groups as academia, senators 90 and members of congress. This
coalition’s focus has been to pressure the government on issues relating to
the Thailand-US FTA in particular as well as issues of legitimacy and
accountability in the conduct of the government’s overall FTA policy.
The dissenting camp has opposed FTAs on many grounds. Because the
concluded FTAs bypassed any process of public scrutiny by parliament or
the senate, the first issue of contention has been the lack of good
governance and transparency in the government’s conduct of FTA
negotiations. Senators and members of parliament in the opposition party
accused the government of hiding information from the public and
expressed fear that the government might illegally bypass constitutional
processes to conclude the FTA. 91 With the government holding a majority
in parliament, one critic described the political climate as
“parliamentarian dictatorship by capitalists" 92 which facilitates FTAs
being negotiated in a way that would bring benefits mainly to associates of
the government. 93 Conflicts of interest embedded in FTA policy were
brought to the attention of the public with the Thailand-Australia FTA.
Some NGOs suspected that this deal benefited the personal business
interests of groups related to the government in the telecoms and auto
sectors at the expense of local dairy farmers.94
Opposing voices also raised concerns about the potential adverse
impact economic liberalisation could have on small farmers and
entrepreneurs, which make up a large proportion of the population. 95
Activists working on the small-scale sustainable agriculture movement
90
Senators in five key upper house committees – on foreign affairs, agriculture, finance
and banking, economics, commerce and industry, social development, and human security
showed opposition to the government’s FTA policy.
91
Achara Asgatagacgat and Chatrudee Theparat, “Free Trade Has Its Many Costs,”
Bangkok Post, February 16, 2004. In the article, Kalaya Sophonpanich, a member of the
opposition Democrat party referred to articles 3 and 224 of the constitution that any
international obligation that might affect Thailand's sovereignty must have the
endorsement of the parliament, thus, ‘… the parliament is entitled to a special committee to
study the pros and cons before binding ourselves to any country, especially the US’. The
chairman of the Senate Foreign Affairs Committee also shared similar concerns (Nophakhun
Limsamarnphun, “Bilateral Free Trade is A Game of High Stakes,” The Nation, February
23, 2004).
92
Rungrawee Pinyorat, “Activists Want New Law to Control FTAs Process,” The
Nation, March 20, 2004. The phrase was from a law academic.
93
Achara Asgatagacgat and Chatrudee Theparat, Bangkok Post, “ Free Trade Has Its
Many Costs,” February 16, 2004. This concern was expressed by a leading academic in
Thailand.
94
Bangkok Post, “Explanation of FTA Is Lacking Woefully,” July 6, 2004.
95
FTA Watch (in Thai), Free Trade Agreement: Impacts on Thailand (Bangkok
:FTA Watch, 2004).
86
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
insisted that small-scale farmers’ earnings and ways of life were likely to
be severely affected due to their limited ability to adjust to new kind of
crops and without sufficient adjustment assistance programs from the
government. 96
Opposition is strongest to the Thailand-US FTA and to intellectual
property rights protection. It is expected that the US will demand
Thailand tighten beyond the current TRIPS agreement. This is singled out
as the issue of deepest threat, and various groups have shared concerns.
The Thai Network of People Living with HIV/AIDS feared that yielding
to Washington’s request would result in limited access to drugs by AIDS
patients. 97 Other consumer organisations also feared that more stringent
protection of drug patents would result in higher drug prices. Those
working on local biodiversity argued that if Thailand accepted the US
demand, it would result in a monopoly on seeds by the US which would
hurt Thai farmers, and lead to long-term exploitation of local biodiversity
by US MNCs.98 FTA Watch and its allies later formally demanded the
withdrawal of intellectual property issues from the Thailand-US FTA.
Opposition groups also demonstrated a certain amount of nationalism.
For example, concern over the loss of Thai sovereignty occupies quite a
significant space in their arguments. In fact, FTA Watch named their
campaign against Thailand-US FTA “Sovereignty Not for Sale”99 and
declared in their official statement that the Thailand-US FTA would lead
to the country being colonised by the US and the Thai state will lose
economic and legal sovereignty to the US.100
These groups have resorted to various measures in order to pressure
the government into adhering to their demands: from street protests,
signature gathering and sending letters to the governments of the
negotiating countries warning them of undemocratic processes in FTA
negotiations. In June 2005, FTA Watch’s political strategies took a
further step by submitting a letter to the UN Human Rights Committee
pledging that the Thai government’s FTA policy involved violations of
96
Bangkok Post, “Free Trade or One-way Street,” December 2, 2004.
Rungrawee C Pinyorat, “Trade Negotiations: FTA Opponents Plan Rally,” The
Nation, June 30, 2004.
98
FTA Watch (in Thai), Thailand-US Free Trade Agreement: Impacts on Thailand
(Bangkok :FTA Watch, 2004), 53-55; Vasana Chinvarakorn, “Free or Even Fair?”
Bangkok Post, July 11, 2005.
99
FTA Watch, “Thailand-US Free Trade Agreement: Impacts on Thailand” and FTA
Watch, “Free Trade Agreement: Impacts on Thailand.”
100
FTA Watch, “Free Trade Agreement: Impacts on Thailand,” XII. Author’s
translation
97
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
87
human rights, especially the people’s right to health 101 in relation to the
intellectual property issue under the Thailand-US FTA.
Analysis: Political Cleavages and Coalitions
Using the empirical evidence, the politics of FTAs will be explained
using the theoretical framework set out above. First, the response of the
economic coalition will be explained. Second, the response from social and
political coalitions will be discussed. Finally, the overall pattern of
political cleavage and coalitions will be discussed and summarised.
9.
EXPLAINING THE ECONOMIC C OALITION
The Sectoral Model and the Economic Coalition
The economic approach is useful in explaining business responses in
which the economic effects of trade liberalisation trigger economic actors
to reformulate their preferences. Businesses were receptive to the
government’s initiative as opening markets for exports directly enhances
the potential income of exporters. Moreover, liberalisation through
preferential trade agreements such as FTA allows even more explicit gains
to the export sector than unilateral or multilateral liberalisation. With
bilateral liberalisation, exports benefit indirectly from lower prices of
imported raw materials and, hence, lower costs of production. Under the
GATT/W TO, the principle of multilateralism means that trade rules will
be extended without discrimination to all members of the GAT T/WTO. 102
Therefore, even if exports can enjoy lower barriers in trade regimes
around the world, multilateral liberalisation does not give them a
competitive edge over competitors in the way that preferential
arrangements from FTAs can.
Ravenhill103 emphasises the point that, because preferential
agreements create exclusivity of market access between member countries,
exporters in non-member countries will invest in political activity to push
their government to establish preferential agreements with trading
partners in order to avoid the discriminatory effect of being excluded in
the first place. Therefore, in addition to general preferences toward free
trade or protectionism, the nature of how market opening is pursued and
through which policy instrument, can intensify the preferences of actors.
FTAs can alleviate discriminatory effects in the current trend towards
101
FTA Watch, “Thailand’s Free Trade Agreements and Human Rights Obligations:
Letter for Submission to the 84 th Session of the UN Human Rights Committee” (2005) at
www.ftawatch.org.
102
Gilpin, 218.
103
Ravenhill, 313.
88
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
competitive regionalism while simultaneously creating a competitive edge
for Thai products in important markets. Traditionally, the preferences of
protectionists have been more intense because free trade generates diffuse
benefits but concentrated costs for protected industries.104 Free trade
policy via FTAs, however, has the opposite effect by generating
concentrated benefits to exporters while costs to importers are more
diffuse given that it can provide for gradual liberalisation and an
adjustment period for sensitive products. 105 With concentrated benefits to
exporters giving exporters a higher preference and intensity toward free
trade, FTAs can easily secure support from exporters for liberalisation.
Because the economic impact of FTAs is estimated in terms of
competitiveness, interests among business were aligned along the importexport cleavage as predicted by the Ricardo-Viner model. Export interests
were identified as the main beneficiaries from the policy by the business
associations and they were explicit in expressing their support for the
policy. The FTI consistently pointed out that FTAs would lead to the
expansion of producers with already high export volume such as the
textile and electronics industries.106 The automobile club of the FTI
emphasised that the local vehicle industry would gain greatly from the
Thailand-Australia FTA and Thailand-US FTAs.107
Politics unfolding around the Thailand-Japan FTA also testified to the
pattern of political alignment along the lines of import-export interests.
As discussed earlier, opposing interests’ political alignment consisted of
domestic steel producers, auto parts manufacturers and non-Japanese car
companies, which are import-competing sectors vis-à-vis Japan, while
exporters, especially the food industry, supported the Thailand-Japan FTA
initially but their support plummeted when the negotiation did not seem to
advance their interests. Such a pattern is consistent with both trade data
and estimates from a TDRI (Thailand Development Research Institute)
study about the potential impact of the Thailand-Japan FTA. 108 The
TDRI consistently estimates that industries that will be able to expand
exports to Japan are agricultural products and food-processing products
104
Goldstein and Martin, 608.
Grossman and Helpman, 669.
106
Speech delivered by the Chairman of the Federation of Thai Industries at the “Free
Trade Agreements: Opportunities for Business” seminar at Bangkok, February, 2004.
Comment made by the chairman of international economic committee of the Federation of
Thai Industries in Benjaprut Akkarasriprapai and Achara Pongvutitham, “FTAs to Boost
GDP by 26%, Official Says,” The Nation, 11 October 2004.
107
The Nation, “Push for FTAs with US, Australia and Japan by Year’s End,” 20
February 2004.
108
TDRI (in Thai), “Sub-topic Study Number 2: Preliminary Analysis on the Impact
from Thailand-Japan Free Trade Agreement,” Thailand Development Research Institute
(2005) at www.ftadigest.com.
105
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
89
while industries that will be hardest hit from increasing Japanese imports
are auto parts, chemical and metal products (see table 3).
Table 3. Estimates of the Impact of the Thailand-Japan Free Trade
Agree m ent on Change in Productions by Sector
Sector
Agriculture
Food-processing
Textiles
Leather-related
Paper
Petroleum
Chemical
Mining
Metal
Vehicles and Parts
Transportation Equipments
Electronics
Engine
Average
Source: adapted from TDRI (2005)
Cha ng e in
percentag e)
9.02
12.15
-0.12
-0.83
-0.18
0.25
-3.85
-0.90
-3.03
-15.12
1.02
0.15
-0.44
1.16
Production
(by
Institutional factors add explanations to the pattern of political alignment
based on industry. Within the business associations, the organisation of
members along industry lines facilitates industry in overcoming collective
action problems in their political mobilisation. It also explains the relative
silence of import-competing industries vis-à-vis other countries beside
Japan. Export sectors are the most prominent and powerful in the
economy and within the business associations. Major export industries
such as food, textiles and garments, auto, electronic and electrical
industries have firm control in business associations and they are active
participants in FTA policy forums. Thus, it is possible that the weaker
industries which are mostly import-competing industries may oppose the
liberalisation policy but their preferences will not be fully transmitted
through their representative organisations.
Limitations of the Factoral Model
Another theoretical puzzle is why business responses correspond more
to the sectoral than the factoral model. In a capitalist economy like
Thailand, where owners of factors can be divided along class line of
90
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
capitalists and labour,109 why are interests not aligned along the line of
class? To answer this, it will be shown that the Heckscher-Ohlin
model/Stolper-Samuelson theorem is insufficient in predicting the
preferences of economic actors, and institutional factors also prevent the
political mobilisation of some groups.
The first part of puzzle is preference formation. As set out in section
3.2, according to the model, it is predicted that the owners of capital will
oppose while labour will favour free trade policy in Thailand. However,
empirical evidence indicates that the opposite is true. Capital owners in
business associations showed support for free trade while positive
responses from labour representatives were not to be found. Why is this
the case?
The first critical point of the Heckscher-Ohlin model is that it
predicts a country’s comparative advantage on the level of the abundance
and scarcity of resources. As a developing country, factor proportionality
in Thailand is one of low capital-labour ratio. 110 However, as Thai
industrialists have embarked upon industrialisation in the international
setting, the rapid transnationalisation of modern sectors and the scale of
output tend to favour capital/technology-intensive techniques that
discourage the use of labour.111 Consequently, the country’s competitive
advantage has diverged away from its factor endowment. As the abundant
factor is not sufficiently utilised in domestic production, owners of the
abundant factor may not benefit from the prospect of free trade. And
since capital-intensive industries are mostly concentrated in the exportoriented sector, it is the case, as observed, that capital owners’ preference
is toward free trade in Thailand. In addition, as Bowie and Unger112 state:
“to understand the political impact of relative factor scarcities, we need to
know something about who controls them.” The capitalist pattern in
which dominant capitalists in Thailand have diversified their investments
109
Kewin Hewison, “Emerging Social Forces in Thailand: New Political and
Economic Roles” in The New Rich in Asia: Mobile Phones, McDonald’s and MiddleClass Revolution ed. Richard Robinson and David S.G Goodman, 139-142 (London and
New York: Routledge, 1996).
110
Juanjai Ajanant, “Trade and Industrialization of Thailand in 2020” in
Restructuring Asian Economics for the New Millennium, Research in Asian Studies vol.
9B, ed. J.R. Behrman, M. Dutta, S.L. Husted, P. Sumalee, C. Suthipand and
Wiboonchutikula, 748 (Amsterdam: Elsevier Science B.V., 2001).
111
Ajanant, 748; Vali Jamal, “NIKKEI Interviews: Employment in Asia” in
Liberalisation and Labour ed. Rajah Rasian and Norbert von Hofmann, 31 (Singapore:
Friedrich Ebert Stiftung, 1996). As Ajanant argues, this is partly because the availability
of technology that is most suitable to the market size and financial capacity of a firm may
not be the one that corresponds with the country’s factor proportion. For example, labourintensive production technologies may not lead to cost optimisation on a long-term basis.
Since labour-intensive techniques that can match market demand are not always available,
business has to utilise available technologies whether it is capital-intensive or not.
112
Bowie and Unger, 20.
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
91
and spread their business interests across various sectors with different
relative factor intensities makes it problematic to predict trade policy
preferences based on factor endowment. 113
The capacity of groups to overcome collective action problems and
institutional factors also explain the limited application of the factoral
model regarding the response from labour. Thai labour organisation is
relatively weak 114 and worker or class organisations are not
institutionalised enough to build political strength. 115 Goldstein and
Martin 116 note that the role of information regarding distributional
implications from trade agreements is important in providing incentives
for groups to mobilise. As FTAs are carried out in the realm of
international economic policy where public debate takes place in the
narrow circle among the urban class and political and business elites, labour
groups lack knowledge about the potential impacts of FTAs. This has
hindered them from effectively formulating their preferences toward
policy and diminished their ability to mobilise.117 Thai labour experts
further point out that lack of leadership and unity among many labour
unions as well as clear political targets are factors that explain the absence
of labour in the contemporary Thai political scene. 118 Nevertheless, labour
mobilisation in response to FTAs may come long after the policy
announcement or even its implementation. As the Thai Labour
Campaign 119 speculates: “when the worst comes to the worst (the situation
of labour), and adverse consequences from FTAs actually happen in the
future, many factories may have to close down and workers will be laid off.
Only then will it be known whether or not any labour movement will
occur. Only in a time of crisis can the real power of labour be seen.”
Therefore, institutional weakness may lead to a lag in response by some
groups toward trade policy but circumstances may help groups to
113
Ibid., 21, 134.
Unger, 59; Bowie and Unger, 20; Phongpaichit and Baker, “Thailand: Economy
and Politics,” 187-221; Shigeru Itoga, “Labor Issues and APEC Liberalisation: Case of
Thailand and Malaysia,” IDE APEC Study Centre Working Paper Series No.1 Fiscal Year
1996/1997, Institute of Developing Economies, Japan External Trade Organisation
(1997) at www.ide.go.jp.
115
Thailand has had one of the lowest rates of formal union membership among
democratic countries; See Phongpaichit and Baker, “Thailand: Economy and Politics,”
215, 221.
116
Goldstein and Martin.
117 This point is made by the Thai Labour Campaign; see Bangkokbiz News, “Keep
Watch: FTAs Might Give Rise to Thai Labor Mobilisation,” May 2, 2005 (in Thai).
118
Interview with the Director of Thai Labour Campaign (a Thai NGO working on
labour rights with association to Chulalongkorn University) and Chairman of the Senate
Committee on Labour and Social Welfare in Bangkokbiz News, May 2, 2005.
119
Ibid.
114
92
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
overcome collective action problems and pursue their preferences in a
more confrontational manner, such as by massive protests or strikes.
Partial Economic Pluralism: the Thai Political Economy
Even in the sectoral model, political coalitions and mobilisation
among economic interest groups are not very clear and systematic,
especially if compared to their Western counterparts,120 nor are there
acute political cleavages among businesses themselves. Business could more
or less maintain a coherent voice in supporting or criticising the FTA
policy. Rogowski 121 notes that one possible reason political cleavage
might not arise as the result of greater exposure to trade is when
government can reallocate gains from winners to compensate losers so
that their income remains unchanged.122 As Rogowski also observes, this is
unlikely and rather, “the natural tendency is for gainers to husband their
winnings and to stop the ears to the cries of the afflicted.”123 Likewise in
the Thai case, there are no governmental trade adjustment assistance
programs in place that can change the preferences of the losers.
This provides a critical point for both theoretical models. The theory
of the domestic politics of trade policy that emerged mostly in Western
democratic societies can satisfactorily predict the preference formation of
economic actors. However, the institutional factors, especially in a
political context that does not fit perfectly with a model of democratic
economic pluralism, plays an important mediating role in determining the
actual formation of domestic political coalitions and the role of interest
groups in the politics of the liberalisation process. In the Thai context, it
is not that the preferences of actors, both importers and exporters, have
not been affected. Although exporters are more politically visible, business
groups often also express concerns about potential losers. The pattern and
institutional nature of Thai public policymaking can explain the relatively
weak and less visible interest representation of Thai interest groups even
when preferences are formed.
One important institutional feature is the business-government
relationship. Patterns of private sector representation under peak
associations (the TCC and the FTI) mean that the private sector usually
presents quite a coherent voice in their support or opposition toward
policy. Moreover, the cooperative nature of government-business
120
For example, US business formed a formal and systematic coalition in support of
the Thailand-US FTA: the US-Thailand Free Trade Agreement Business Coalition.
121
Ronald Rogowski, “Commerce and Coalitions: How Trade Affects Domestic
Political Alignments” in International Political Economy: Perspective on Global Power
and Wealth (4 th ed.), ed. Jeffry A. Frieden and David A. Lake (Boston: Routledge, 2000).
122
Ibid., 325.
123
Ibid.,325.
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
93
relationships explains overall business support for FTA policy even when
losers can be identified. Laothamatas124 summarises that “business
associations have generally employed non-confrontational tactics in
seeking to induce policy cooperation from the government. Occasionally
though, they have resorted to more aggressive means to advance their
policy preferences.” In the policy process of FTA negotiations, business
associations can secure an insider status and have influence over the
government’s position during negotiations.125 They can advance their
preferences in the policy-making process without forming explicit
coalitions or taking public stances to pressurise the government. An
‘occasional case’ of confrontation is exemplified by the Thailand-Japan
FTA case. This case stimulated business to publicly announce their
positions because the negotiation became highly politicised with the
Japanese side trying to lobby cabinet members and the prime minister,
while the Thai business sector felt threatened that their opinions would be
overruled. Such direct criticism against the government’s behaviour, rather
than trade liberalisation per se, seems to be needed to ensure that
industry’s interests are protected.
Outside the formal channels of business political influence, it is widely
accepted that part of economic policy in Thailand is still being formulated
through ad hoc clientelistic channels rather than formal, inclusive
associations with legitimate consultative mechanisms. 126 Laothamatas 127
argues that although a growing influence of organised business interest has
been present, “with electoral politics…corrupt dealings between
government and business again picked up,”128 however, “clientelistic
networking and corruption have not thus far obstructed the search for
efficient economic strategies.”129 Another academic contends that, “the
significant liberalisation in Southeast Asia has not been driven by new
domestic coalitions of pro-market business or middle-class interest
groups.”130 In the case of Thailand, the adapted although existing patterns
124
Laothamatas, “From Clienelism to Partnership: Business-Government Relations
in Thailand,” 204.
125
Wynn Grant, Pressure Groups and British Politics (London: Macmillian Press,
2000), 19 distinguishes between insider and outsider groups. Insider groups are
“regarded as legitimate by government and consulted on a regular basis.” In contrast,
outsider groups “either do not wish to become enmeshed in a consultative relationship
with officials, or are unable to gain recognition.”
126
Unger, 72; Laothamatas, “From Clienelism to Partnership: Business-Government
Relations in Thailand”, 209.
127
Laothamatas, “From Clienelism to Partnership: Business-Government Relations
in Thailand.”
128
Ibid., 209.
129
Ibid.
130
Greg Felker, “Globalization and Southeast Asia” (Draft Paper), Stanford
94
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
of state-business relationships between family-oligarchic business structures
and business-backed parliamentarism has remained the defining feature in
the politics of liberalisation. 131 Such factors are not the whole story, given
the active participation by business associations in the FTA policy
process. However, one conclusion that can be confirmed is that the semidemocratic capitalist system of Thailand makes it tricky for all relevant
economic actors to fully form political coalitions, align their interests and
be fully represented according to their policy preferences.
10. EXPLAINING THE SOCIAL/POLITICAL C OALITION
While the economic approach has explanatory power in relation to
the economic coalition, it can only provide limited insights about the
change in non-economic interests and the motivation for non-economic
actors to attempt to influence trade policy. Oatley 132 elaborates that:
The society-centred approach tells us nothing about why groups that
focus on the environment or human rights spend resources attempting to
influence trade policy. Nor does it provide any basis with which to make
sense of such groups’ trade policy preferences. In the past, such a
weakness could perhaps be neglected because non-economic groups
played only a small role in trade politics. The contemporary backlash
against globalisation suggests, however, that these groups must
increasingly be incorporated into society-centred models of trade
politics.
Developments in the international economic and political order,
whether in the broader context or specific to the trading regime, lead to
new factors and forces that have to be included in the trade politics
equation. Understanding the politics of trade today is intricately linked
with the politics of globalisation. Committing a country to a certain
liberalisation regime often entails changes in commercial laws in order to
make them compatible with the rules in those regimes. More than ensuring
that trade will be freer, trade liberalisation in this context seeks to ensure
that international trade relations will be governed. Consequentially,
liberalisation will affect and constrain commercial practices and
production and consumption patterns, both through changes in price and
changes in regulations. Changes in economic activities have a more
fundamental impact on peoples’ ways of life and societal values. In this
chain of reactions, trade policy extends its realm of influence beyond the
economic space of actors’ interests.
Institute for International Studies, 17 (2004) http://iisdb.stanford.edu/evnts/3878/Felker_SEAF_paper.pdf.
131
Ibid.
132
Oatley, 108.
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
95
Previously, political coalitions necessary to open up the country in
Thailand were composed only of the state (such as military leaders or
bureaucrats) and business elites while the rest of the country was dragged
along with them. 133 Today, the empirical evidence shows that participants
from civil society sectors have become the new main actors in trade
politics and their support will be an important variable in maintaining
enough political backing for the liberalisation agenda.
In the analytical framework of preferences and institutions, sources of
preferences, which bring social actors into trade politics, are traced and
institutional backgrounds facilitating the forceful rise of this new coalition
are discussed. This will be employed in the hope that a certain level of
systematic analysis can be satisfied. However, the exploratory nature of
the analysis in this unfamiliar area of trade politics should be equally
productive. Since the social/political coalition actively opposes FTAs
specifically in the case of the Thailand-US FTA, this FTA will be focused
on as a case representative of new trends in the domestic politics of trade.
Sources of Preferences
In the trade arena, national policy is closely linked with processes at
the international level, which set the framework for a country to pursue
its policy preferences. The global trading regime and international trade
policy landscape provide a particular context and condition for
liberalisation. The context in which bilateral FTAs are being pursued is
partly characterised by the proliferation of comprehensive agreements,
which is part of the United States’ grand strategy of using FTAs to
stimulate competitive liberalisation in a manner consistent with US
interests. The US expects to use US-modelled comprehensive bilateral
FTAs to establish precedents for wider agreements at the multilateral
level.134 To pursue a bilateral FTA strategy with a more powerful strategic
partner like the US, it is inevitable for Thailand to accept the terms and
conditions imposed by the US. As discussed above, that comprehensive
agreement involves deep economic liberalisation and results in farreaching impacts on the domestic economy and society. Policies of
liberalisation in the form of comprehensive FTAs have strong social
implications, are thus the first source of preferences for non-economic
actors.
133
Bowie and Unger.
Richard E. Feinberg, “The Political Economy of United States’ Free Trade
Agreements,” Graduate School of International Relations and Pacific Studies, University
of California, Sandiego (2003), 2.
134
96
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
Richardson 135 discusses the importance of incorporating knowledge
about experiences elsewhere in public policy making and notes that policy
transfers from one country to another is an increasingly important
component of the policy learning process. In a similar vein, Bowie and
Unger 136 note that in a complex global environment, predicting future
impacts and estimating one’s own utilities toward a policy can be difficult
and often, actors’ interests are not clearly articulated even to themselves.
Thus, when the external model of those that experience similar events is
available, actors are prone to draw parallels from experiences elsewhere in
estimating their expected gains and losses and mobilising political pressure
based on their interests, estimated through use of such analogies, which
they term the “demonstration effect.” 137
Most of the arguments by opponents to FTAs from NGOs and civil
society show that their preferences are drawn from events in the
international arena both as a global political space and from other
countries. Using the legitimacy and participation issues related to the
W TO, they opposed Thai government on similar grounds. Resistance and
resentment against free trade pacts, especially in relation to US-involved
North-South agreements in other regions also provided the demonstration
effect for NGOs, who predicted that similar consequences were likely in
the Thai case. FTA Watch often support their case by pointing to
disastrous consequences of the North American Free Trade Agreement
(NAFTA) 138 and how the US can force less powerful negotiating partners
to accept terms unfavourable to them but to the benefit of the US, using
the example of the US-Chile FTA. 139 And as Latin American NGOs have
actively engaged in political mobilisation and established themselves as
significant actors in the trade politics140 of NAFTA and the Free Trade
Agreement of the Americas (FTAA), political mobilisation by FTA
Watch can be seen as being partly influenced by their counterparts. 141
135
Jeremy Richardson, ‘Government, Interest Groups and Policy Change’ Political
Studies vol. 48 (2000): 1006-1025.
136
Bowie and Unger.
137
Ibid., 23.
138
NAFTA is often used as a sample case to show ill consequences of trade
agreements between developing countries and the US. Critics of NAFTA often point out
that the flood of cheaper agricultural goods from the US have hurt Mexican farmers, US FDI
has damaged the environment, industrialization headed by US MNCs forced indigenous
people to relocate from their land and change their livelihoods etc.
139
FTA Watch, “Thailand-US Free Trade Agreement: Impacts on Thailand” and FTA
Watch, “Free Trade Agreement: Impacts on Thailand.”
140
Karen Brock and Rosemary McGee, “Mapping Trade Policy: Understanding the
Challenges of Civil Society Participation,” Institute of Development Studies Working
Paper 225, Institute of Development Studies, England, 2004, 13.
141
Although this cannot be said for certain, there are strong linkages and networking
among Thai NGOs and their international counterparts, especially those from South
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
97
Therefore, when existing examples from other countries can be drawn
with a high level of compatibility, knowledge from other countries is
important as a source for social actors to formulate their policy
preferences.
Although actors from the social/political coalition come from a
diverse range of sectors, their interests are well-aligned in their opposition
to FTA policy and in particular the issue of excluding intellectual property
rights from the Thailand-US FTA. Their political alignment, as reflected
in FTA Watch’s statements, suggests that the role of ideas is important in
uniting social actors in contrast to how interests unite economic actors.
The coalition’s aims are clearly stated: “(FTA Watch’s) aim is to provide
the public with in-depth information and analyses of the FTAs,
particularly on their potentially adverse effects on the more vulnerable
sectors of Thai society, i.e., small businesses, people living with HIV/AIDS
and the poor in general.” The fundamental ideological element detected
here is the issue of the legitimacy of the government in representing the
people. Most of the organisations involved with FTA Watch definitely see
themselves as representatives of the marginalised groups. The idea of
justice and fair representation (or lack of it) is, thus, the common ground
uniting them.
However, if this coalition is placed in the larger context of Thailand’s
political climate, this pattern of interest constellation is quite predictable.
Moreover, the diversity of actors who see their political interests aligned
implies that there is a larger trend and broader trajectory to which this
opposition is related or which it is trying to address.
As Thailand finds itself immersed in the globalisation process as well
as trying to come to terms with the 1997 economic crash, a political
divide that has characterised the country has been termed by Thai
academics and the press as a global-local divide.142 This global-local
tension is rooted in the dualistic structure of Thai economic development,
where export-oriented industrialisation and financial liberalisation gave
rise to an urban-based, internationally-oriented, capital-intensive and
technology-driven modern economy that is detached from the agrarianbased economy in the rural area which still inhibits the majority of the
America. For example, FTA Watch organised a conference and invited speakers from
activist from Mexican Action Network on Free Trade and Global Trade Watch.
142
Pasuk Phongpaichit and Chris Baker, “Democracy, Capitalism and Crisis:
Examining Recent Political Transitions in Thailand,” Chulalongkorn University,
Bangkok (2001); Natasha Hamilton-Hart, “Thailand and Globalisation” in East Asia and
Globalisation, ed. Samuel S. Kim (Maryland: Rowman and Littlefield, 2000); Kewin
Hewison, “Resisting Globalization: A Study of Localism in Thailand,” The Pacific
Review, vol. 13, no. 2 (2000): 279-296. Alternatively, this could be read as a globalizercommunitarian divide (Hamilton-Hart, 191).
98
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
population. 143 The modern economy is populated by ‘globalisers’ (see
table 4), consisting of commercial interests that promote corporate
capitalism and advocate the advantages of liberalisation and the operation
of the market. 144
At the other extreme, deeper globalisation often has negative
consequences on the less flexible and less powerful local portion of
society. Rodrik 145 observes that globalisation accentuates asymmetries
between those who have the skills and mobility to flourish in global
markets and those who either don’t have these advantages or perceive
that the expansion of the market is inimical to social stability and deeply
held norms. These consequences have been reinforced throughout the
modern period as social implications have been consistently neglected by
governments and people feel that the welfare of the masses has been
subordinated the benefit of the wealthy few. Localists, with NGOs and
social movements as significant participants 146 emerged in reaction to
these consequences. They opposed globalisation, called for “justice in the
international system and within individual nation-state,” 147 sought to
break away from the domination of the neo-liberal model of economic
growth and are suspicious of liberalisation and market economies.148
143
Phongpaichit, “Democracy, Capitalism and Crisis: Examining Recent Political
Transitions in Thailand,” 11.
144
Hewison, ‘Resisting Globalization: A Study of Localism in Thailand’, 279
145
Rodrik, ‘Has Globalization Gone Too Far?” 2-3.
146
Hewison, “Resisting Globalization: A Study of Localism in Thailand,” 282.
147
Ibid., 282.
148
Ibid., 285-286.
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
99
Table 4. Sum mary of Globalists vs. Localists tension in the
Politics of Globalisation in Thailand
Globalists
Issues
•
•
•
Actors
•
Market orientation
Deepening globalisation
and economic
integration with the
international economy
Promote corporate
capitalism and
advantages of
globalisation
Localists/Opponents of
Globalisation
• Opposition to economic
growth, urban and
industrialism
• Advocates of local
community/rural culture
• Conservative nationalists
aiming to protect Thai
culture
• Economic self-reliance,
alternative developmental
path such as selfsufficient economics or
sustainable development
• Critical of materialism
and consumerism
• NGOs and social
movements
• Farmers
• Environmentallyconcerned groups
• Buddhist monks
Newly emergent and
long-established
Bangkok-based business
families
• Well-established urban
capitalism
• Foreign capital
• Technocrats in
economic bureaucracies
Source: Hart; and Hewison. Tabulation created by author.
In this broader and deeper setting, it can be seen that the global-local
divide spilled over into the politics of trade policy and influenced the
preference formation of social actors. Opponents of FTAs argue that they
are undertaken for the benefit of narrow commercial interests at the
expense of the rest of the population. They argue that the poor and
socially disadvantaged groups like small farmers and small and medium
enterprises (SMEs) will find it hardest to adjust, as the Thai government
rushes the country into yet another trap set by the US to advance their
neo-liberal agenda. The Thailand-US FTA undermines Thai sovereignty
while Thai culture and heritage will be further destroyed by greater
penetration of society by capitalistic forces and exploitation by foreign
investors.
100
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
Institutional Factors: NGO Movements
Given that NGO and civil society are new actors in the arena of trade
policy, the institutional factor is especially important in facilitating their
entrance to the area. An emerging institutional background that facilitates
social actors and NGOs actively engaging in trade politics as well as
assisting diverse actors to form a fairly cohesive and unified coalition
against an FTA, lies at the heart of the establishment of new social forces
and their immersion in the public policy making process. In Thailand, as
social movements have developed into a loose, but identifiable set of
interlocking networks, activists have begun to debate how to deliver their
politics into the formal arena of parliamentary democracy. Political
mobilisation and networking activities among NGOs, as well as their
participation in the national political arena, have become more
institutionalised.149 Such institutional structures have paved the way for
their active role in trade politics, in an environment where trade policy
has become strongly related to traditional areas of concerns for Thai civil
society, such as the rural community, development, and poverty.
11. POLITICAL CLEAVAGE : THE ECONOMIC AND SOCIAL DIVIDE
To summarise, the two coalitions that have emerged in response to
the government’s FTA policy can be explicitly distinguished by their
different foci and how their preferences have changed due to the potential
impact of trade liberalisation. However, the two coalitions cannot be
definitely determined by the political stances of proponents and
opponents. Even if the economic coalition is characterised largely as
supporting the policy, they voice opposition once elements of the policy
deviate from their interests. Nevertheless, it can still be said that the
government can secure support for FTA policy from business while it has
to deal with outright resistance from the social/political coalition. The
pattern of coalitions that has emerged reflects a more fundamental divide
between groups in response to the challenge of free trade. The main
factors characterising the two coalitions are their preferences and the
arguments supporting their cases. While the first group argues mainly
about the economic benefits and costs of the policy, the second group’s
preferences and arguments are grounded in the social impacts.
This political divide of the economic vs. the social coalition is
structural both in terms of the national political economy and the
international setting. The formation of preferences toward the FTA is
149
Phongpaichit and Baker, “Thailand: Economy and Politics”; Pasuk Phongpaichit,
“Civilizing the State: State, Civil Society and Politics in Thailand,” The Wertheim
Lecture 1999, Centre for Asian Studies Amsterdam (1999).
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
101
structurally rooted in the pattern of liberalisation in a context of
globalisation and the landscape of international trade. Deeper globalisation
as a result of FTAs promised benefits for market-oriented actors, but it has
raised concerns among social actors about the social implications of free
trade policy. The dualistic pattern of economic development in Thailand
resulting in an economic and social asymmetry in the country further
reinforces social concerns about free trade policy at the same time as
export interests are advanced through the neo-liberal agenda and marketled economic development policies.
Table 5. Political Cleavages in Response to FTA Policy in Thailand
Source of
Preferences
Main Actors
Political
Argument/
Rationale
Supporting their
political stances
Political
Strategies/Position
Economic
Coalition
Economic Interests
Social/Political Coalition
Business Associations
Some Economists
Leading Business
figures
International
Competitiveness
Fair Competition
(when opposing
liberalisation e.g.
steel industry in
Thai-Japan FTA)
Social movements, local
NGOs, international NGOs,
politicians, academics
Insider Status –
regular consultative
system with
government agencies
during negotiation
Outsider Status – excluded
from formal and regular
consultative system with
government agencies, street
protests, sending letters to
The Role of Ideas
Concerns for fairness and
justice
Unfair trade deal on
international stage
Adverse social effects on the
disadvantaged from
globalisation and deeper
economic integration
Unfairness for the
disadvantaged groups
Lack of representativeness
of the government in
negotiating FTAs
Loss of Sovereignty
Capitalism profits at the
expense of grassroots
sufferings
102
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
Economic
Coalition
process.
FTA of Co ncern
Issue of Concern
Political Dema nds
for FTA
negotiation
Social/Political Coalition
foreign governments
(negotiating partners) and
international organisations
(the UN)
FTA Thai-Japan,
FTA Thai-China
FTAs with major
economic
implications
Tariff Reduction
Unfair trade practices
after liberalisation
FTA Thai-US
FTAs with major social and
political implications
Longer Adjustment
Periods for sensitive
sectors
Government
assistance programs
to upgrade industries
by increasing
production efficiency
and upgrading product
quality and
competitiveness
Suspend the negotiation
Withdrawal of certain issues
Deep economic integration
involving change in
regulatory and institutional
arrangements such as:
Intellectual property rights
Investment regime
12. C ONCLUSION
This paper has attempted to look at interest configuration and the
subsequent political activities of domestic socioeconomic actors in
response to the Thai government’s liberalisation agenda and bilateral FTA
policy. Using the theoretical framework of domestic politics and
internationalisation, the theoretical underpinning of the paper is that the
exposure of the country to international markets will change domestic
actors’ preferences which will cause them to respond in such a way that
their preferences can be fulfilled. Institutional factors will then act as a
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
103
mediating factor between actors’ preferences and their ability to organise
or form coalitions.
Investigating the case of FTA policy in Thailand, this paper concludes
that the established theory of the domestic politics of trade based on
economic models can provide insights into the way preferences of
economic actors are formed, but it has less to say in terms of the
emergence of a new non-economic coalition whose preferences are
affected by free trade agreements in non-economic terms.
Moreover, attention to preferences alone is not sufficient.
Institutions are a significant intervening factor which helps to explain the
actual formation of political coalitions which might deviate from actors’
preferences, the pattern of representation and the roles of interest groups
in the politics of trade policy. In the case of Thailand, partial economic
pluralism explains the lower degree of interest representation and political
coalition by business compared to what can be observed in Western
countries, especially the US. On the other hand, increasing
democratisation, the institutionalisation of social forces and the
emergence of civil society explain the entrance of NGOs and other social
actors into this area of trade politics.
The paper also argues that the political cleavages characterising the
domestic politics of Thai FTA policy is the divide between the economic
and social/political coalitions. Actors in each coalition have different
sources of preferences. While actors in the first coalition base their
preferences solely in terms of economic interests, those in the second
draw their preferences from ideas and values and oppose the policy based
on the social implications of free trade.
The distinction between economic and political coalitions implies that
under globalisation and in order to embark upon liberalisation,
governments have to garner political support by managing the social and
political implications of liberalisation policy. The emergence of the
cleavage between the business coalition, which emphasises an economic
justification of liberalisation, and those who are anxious about the social
and political effects will change the whole political equation of the
liberalisation process. Attention to the issue of legitimacy, and the
assurance for the general population that the government will not trade
narrow economic benefits for the suffering of the masses, has become a
major requirement for successful liberalisation efforts.
Using a society-centred approach to domestic politics, the limitation
of this paper lies in its scope: by not giving due attention to the state that
the state-centred approach would afford. The state-centred approach
should be used to complement the society-centred approach in order to
arrive at a more complete analysis of the domestic politics of trade,
especially by looking at the patterns of influence that each interest group
104
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
has on policy outcomes. Given that the state may not respond with equal
enthusiasm to different social groups’ demands, further research should
aim to understand why the demands of certain groups are attended to while
the influence of other groups is limited even when their preferences are
represented in a democratic society.
As for Thai NGOs, although they have established themselves as
significant actors in the politics of FTAs, it is as yet inconclusive whether
their participation in this area will become institutionalised. They also
face the challenge of how to ensure that their political mobilisation will be
influential enough so that the capitalist-oriented government will realise
its obligation to achieve a better balance between the economic and social
impacts of economic liberalisation policy.
REFERENCES
Ahearn, Raymond J. and Wayne M. Morrison. “U.S. - Thailand Free
Trade Agreement Negotiations.” the United States Congressional
Research
Service
(2004).
http://us-asean.org/us-thaifta/RL32314.pdf.
Ajanant, Juanjai. “ Trade and Industrialization of Thailand in 2020” in
Restructuring Asian Econo mics for the New Millennium, Research
in Asian Studies vol. 9B, edited by J.R. Behrman, M. Dutta, S.L.
Husted, P. Sumalee, C. Suthipand and Wiboonchutikula, 743-772.
Amsterdam: Elsevier Science B.V., 2001.
Akkarasriprapai, Benjaprut and Achara Pongvutitham, “FTAs to Boost
GDP by 26%, Official Says.” The Nation, October 11, 2004 via
FTA Watch, http://www.ftawatch.org/cgi-bin/content/newse/list.pl.
Akrasanee, Narongchai. ‘The FTA Architecture of Thailand’,
Presentation at Pacific Economic Cooperation Council (PECC)
Trade Forum Meeting 22 nd -25 th May, 2005, Jeju Island, Korea,
2005.
Alt, James E. and Michael Gilligan. “The Political Economy of Trading
States: Factor Specificity, Collective Action Problems, and
Domestic Political Institutions” in International Political
Economy: Perspective on Global Power and Wealth (4 th ed),
edited by Jeffry A. Frieden and David A. Lake. Boston: Routledge,
2000.
Asgatagacgat, Achara and Chatrudee Theparat. “Free Trade Has Its Many
Costs.” Bangkok Post, February 16, 2004 via FTA Watch,
http://www.ftawatch.org/cgi-bin/content/newse/list.pl.
Baldwin, Robert E. “The Political Economy of Trade Policy.” Journal of
Economic Perspectives vol. 3, no. 4 (1989): 119-135.
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
105
Bangkokbiz News. “Keep Watch: FTAs Might Give Rise to Thai Labor
Mobilization,” Bangkokbiz News, May 2, 2005 (in Thai) via FTA
Watch, http://www.ftawatch.org/cgi-bin/content/newse/list.pl.
Bangkok Post. “Explanation of FTA Is Lacking Woefully,” July 6, 2004
via FTA Watch, http://www.ftawatch.org/cgi-bin/content/newse/list.pl.
———. ‘Free Trade or One-way Street’, December 2, 2004 via FTA
Watch, http://www.ftawatch.org/cgi-bin/content/newse/list.pl.
Bowie, Alasdair and Danny Unger. The Politics of Open Economies:
Indonesia, Malaysia, the Philippines and Thailand. Cambridge:
Cambridge University Press, 1997.
Brock, Karen and Rosemary McGee. “Mapping Trade Policy:
Understanding the Challenges of Civil Society Participation.”
Institute of Development Studies Working Paper 225, Institute of
Development Studies, England, (2004).
Changsorn, Pichaya and Usanee Mongkolporn. “No Running Away from
FTAs,” The Nation, April 2, 2004 via FTA Watch,
http://www.ftawatch.org/cgi-bin/content/newse/list.pl.
Charlton, Andrew H. and Joseph Stiglitz. “Common Values for the
Development
Round”
(2004),
http://www1.gsb.columbia.edu/faculty/jstiglitz/download/website/Co
mmon_Values_for_the_Development_Round.htm.
Chinvarakorn, Vasana. “Free or Even Fair?” Bangkok Post, July 11, 2005.
Choudry, Aziz. “The Elephant, the Rabbit, the Cobra and the Gold:
Fighting the US-Thailand Free Trade Agreement,” Scoop
Independent
News,
March
29,
2004,
http://www.scoop.nz/stories/HL0403/S00306.htm?mode=print.
Coughlin, Cletus C., Alec K. Chrystal and Geoffrey E. Wood.
“Protectionist Trade Policies: A Survey of Theory, Evidence and
Rationale” in International Political Econo my: Perspective on
Global Power and Wealth (4 th ed.) edited by Jeffry A. Frieden and
David A. Lake. Boston: Routledge, 2000.
Cox, Ronald W. “Explaining Business Support for Regional Trade
Agreements” in International Political Econo my: Perspective on
Global Power and Wealth (4 th ed), edited by Jeffry A. Frieden, and
David A. Lake. Boston: Routledge, 2000.
Dent, Christopher M. “ The New Economic Bilateralism and Southeast
Asia: Region-Convergent or Region-Divergent?” Institute of
Political and Economic Governance (IPEG) Papers in Global
Political Economy, No. 7 (April 2004).
Department of Trade Negotiations, the Ministry of Commerce, “FTA:
Free Trade Agreement,” www.thaifta.com.
Doner, Richard F. and Ansil Ramsay. “Postimperialism and Development
in Thailand.” World Development vol 21, no. 5 (1993): 691-704.
106
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
———. ‘The Challenges of Economic Upgrading in Liberalizing Thailand’
in States in the Global Economy: Bringing Domestic Institutions
Back In, edited by Linda Weiss. Cambridge: Cambridge University
Press, 2003
Dornbusch, Rudiger. “ The Case for Trade Liberalization in Developing
Countries.” Journal of Economic Perspectives vol. 6, no. 1 (1992):
pp 69-85
Dunleavy, P. and Brendan O’Leary. Theories of the State. London:
Macmillan, 1987.
Dunleavy, P. Democracy, Bureaucracy and Public Choice, Hemel
Hempsted, Harvester (1991).
Esty, Daniel C. “The World Trade Organization’s Legitimacy Crisis.”
World Trade Review vol. 1, no. 1 (2002): 7-22.
Feinberg, Richard E. “ The Political Economy of United States’ Free Trade
Agreements.” Graduate School of International Relations and Pacific
Studies, University of California, San Diego (2003).
Felker, Greg. “Globalization and Southeast Asia” (Draft Paper), Stanford
Institute for International Studies (2004) at
http://iis-db.stanford.edu/evnts/3878/Felker_SEAF_paper.pdf.
Frieden, Jeffrey A. and Ronald Rogowski. “The Impact of International
Economy on National Policies: An Analytical Overview” in
Internationalization and Domestic Politics, edited by Robert O.
Keohane and Helen V. Milner. Cambridge: Cambridge University
Press, 1996.
FTA Monitoring Committee, the Fiscal Policy Research Institute, “FTA
Monitoring”, www.ftamonitoring.com.
FTA Watch coalition, “FTA Watch”, www.ftawatch.org.
FTA Watch (in Thai). Thailand-US Free Trade Agreement: Impacts on
Thailand. Bangkok :FTA Watch, 2004.
———. Free Trade Agreement: Impacts on Thailand. Bangkok: FTA
Watch, 2004.
FTA Watch. “ Thailand’s Free Trade Agreements and Human Rights
Obligations: Letter for Submission to the 84 th Session of the UN
Human Rights Committee” (2005) at www.ftawatch.org.
Garrett, Geoffrey and Peter Lange. “Internationalization, Institutions, and
Political Change” in Internationalization and Domestic Politics,
edited by Robert O. Keohane, and Helen V. Milner. Cambridge:
Cambridge University Press, 1996.
Gilpin, Robert. Global Political Economy: Understanding International
Economic Order, Princeton: Princeton University Press, 2001.
Goldstein, Judith and Lisa L. Martin. “Legalization, Trade Liberalization,
and Domestic Politics: A Cautionary Note.” International
Organization vol. 54, no. 3 (2000): 603-632.
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
107
Gourevitch, Peter. “ The Second Image Reversed: The International
Sources of Domestic Politics.” International Organization vol. 32,
no. 4 (1978): 881-912.
Grossman, Gene M. and Elhanan Helpman. “ The Politics of Free Trade
Agreements.” The American Economic Review vol. 85, no. 4
(1995): 667-690.
Grant, Wynn. Pressure Groups and British Politics. London: Macmillian
Press, 2000.
Hamilton-Hart, Natasha. “Thailand and Globalization” in East Asia and
Globalization, edited by Samuel S Kim. Maryland: Rowman and
Littlefield, 2000.
Henderson, David. “W TO 2002: Imaginary Crisis, Real Problems.” World
Trade Review vol. 1, no. 3 (2002): 277-296.
Hewison, Kewin. “Emerging Social Forces in Thailand: New Political and
Economic Roles” in The New Rich in Asia: Mobile Phones,
McDonald’s and Middle-Class Revolution edited by Richard
Robinson and David S.G Goodman. London and New York:
Routledge, 1996.
Hewison, Kewin. “Thailand: Capitalist Development and the State’ in The
Political Economy of South-East Asia: An Introduction, edited by
Garry Rodan, Kewin Hewinson and Richard Robinson. Melbourne:
Oxford University Press, 1998.
———. “Resisting Globalization: A Study of Localism in Thailand.” The
Pacific Review vol. 13, no. 2 (2000): 279-296.
———. “Thailand’s Capitalism Before and After the Economic Crisis” in
Politics and Markets in the Wake of the Asia Crisis, edited by
Richard Robinson, Mark Beeson, Kanishka Jayasuriya and HyukRae Kim. London: Routledge, 2000.
———. “The Politics of Neo-Liberalism: Class and Capitalism in
Contemporary Thailand.” Working Paper Series: No. 45, Hong
Kong Southeast Asia Research Centre, The City University of
Hong
Kong
(2003)
at
http://www.cityu.edu.hk/searc/WP45_03_Hewison.pl.
Hocking, Brian. “ Trade Politics: Environments, Agendas and Processes”
in Trade Politics: International, Domestic and Regional
Perspectives, edited by Brian Hocking and Steven McGuire.
London: Routledge, 1999.
Hoekman, Bernard and Michel Kostecki. The Political Economy of the
World Trading System: WTO and Beyond (2 nd ed.) Oxford: Oxford
University Press, 2001.
Intal J.R., Ponciano. “Bilateral and Multilateral Trade Negotiations and
Business.” Paper prepared for ‘Business for Development’
Conference hosted by Department of Trade and International
108
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
Trade Center, 21-22 October, 2004, Philippine Trade Training
Center, Manila.
Itoga, Shigeru. “Labor Issues and APEC Liberalization: Case of Thailand
and Malaysia.” IDE APEC Study Center Working Paper Series
No.1 Fiscal Year 1996/1997, Institute of Developing Economies,
Japan External Trade Organization (1997) at www.ide.go.jp.
Jamal, Vali. “NIKKEI Interviews: Employment in Asia” in Liberalization
and Labor, edited by Rajah Rasian and Norbert von Hofmann.
Singapore: Friedrich Ebert Stiftung, 1996.
Japan-Thailand Economic Partnership (JTEP) Office. “Japan-Thailand
Economic Partnership Agreement.” www.mfa.go.th/jtepa.
Jayasuriya, Kanishka. “Embedded Mercantilism and Open Regionalism: the
Crisis of Regional Political Project.” Third World Quarterly vol.
24, no. 2 (2003): 339-355.
Keohane, Robert O. and Helen V. Milner. “Internationalization and
Domestic Politics: An Introduction” in Internationalization and
Domestic Politics, edited by Robert O. Keohane and Helen V.
Milner. Cambridge: Cambridge University Press, 1996.
Krongkaew, Medhi. “ The Economics of Institutional Change: Making
Economic Policy in Thailand” in Institutions and Econo mic
Change in Southeast Asia: the Context of Development from the
1960s to the 1990s, edited by Colin Barlow and Edward Elgar. UK:
Cheltenham, 1999.
Laothamatas, Anek. “From Clientelism to Partnership: BusinessGovernment Relations in Thailand” in Business and Government
in Industrializing Asia, edited by Andrew MacIntyre. New South
Wales: Allen and Unwin, 1994.
Laothamatas, Anek. Business Associations and the New Political Econo my
of Thailand, Boulder, CO: Westview Press, 1992.
Limsamarnphun, Nophakhun. “Bilateral Free Trade is A Game of High
Stakes,” The Nation’, February 23, 2004 via FTA Watch,
http://www.ftawatch.org/cgi-bin/content/newse/list.pl.
Lloyd, P.J. “New Regionalism and New Bilateralism in the Asia-Pacific.”
Visiting Researchers Series No. 3, Institute of Southeast Asian
Studies (2002).
Low, Linda. “ The Political Economy of Trade Liberalization.” AsiaPacific Develop ment Journal, vol. 11, no. 1 (2004): 1-23.
MacIntyre, Andrew. “Business, Government and Development: Northeast
and Southeast Asian Comparisons” in Business and Government in
Industrializing Asia, edited by Andrew MacIntyre. New South
Wales: Allen and Unwin, 1994.
Ministry of Commerce (in Thai). FTA Fact Book. Bangkok: Department
of Trade Negotiations, Ministry of Commerce, 2004.
VOL. 2 ,
NO.
1 —MAY 2 0 0 6
109
Nagai, Fumio. “ Thailand’s Trade Policy: WTO plus FTA?” IDE APEC
Study Centre, Working Paper Series 01/02-No.6, APEC Study
Centre, Institute of Developing Economies (2002).
Na Thalang, Jeerawat. “Advice From Economists: Focus FTAs on Major
Markets,” The Nation, September 25, 2004 via FTA Watch,
http://www.ftawatch.org/cgi-bin/content/newse/list.pl.
Oatley, Thomas. International Political Economy: Interests and
Institutions in the Global Econo my. New York: PearsonLongman, 2004.
Phongpaichit, Pasuk. “Civilizing the State: State, Civil Society and
Politics in Thailand.” The Wertheim Lecture 1999, Centre for
Asian Studies Amsterdam (1999).
Phongpaichit, Pasuk and Chris Baker. Thailand: Economy and Politics
(2n Ed.) Kuala Lumpur: Oxford University Press, 2002.
———. “Democracy, Capitalism and Crisis: Examining Recent Political
Transitions in Thailand.” Bangkok: Chulalongkorn University,
2001.
Pinyorat, Rungrawee C. ‘Activists Want New Law to Control FTAs
Process’, The Nation, March 20, 2004 via FTA Watch,
http://www.ftawatch.org/cgi-bin/content/newse/list.pl.
———. “Trade Negotiations: FTA Opponents Plan Rally, The Nation,”
June
30,
2004
via
FTA
Watch,
http://www.ftawatch.org/cgibin/content/newse/list.pl.
Ravenhill, John. “ The New Bilateralism in the Asia Pacific.” Third World
Quarterly vol. 24, no. 2 (2003): 299-317.
Richardson, Jeremy. “Government, Interest Groups and Policy Change.”
Political Studies vol. 48 (2000): 1006-1025.
Rodan, G. The Political Economy of South-East Asia: Conflicts, Crises and
Change, Melbourne: Oxford University Press, 2003.
Rodrik, Dani. Has Globalization Gone Too Far? Washington D.C.:
Institute of International Economics, 1997.
———. “Feasible Globalizations.” John F. Kennedy School of
Government, Harvard University (2002) at,
http://ksghome.harvard.edu/~drodrik/Feasglob.pdf.
Rogowski, Ronald. Commerce and Coalitions: How Trade Affects
Do mestic Political Align ments. Princeton: Princeton University
Press, 1989.
———. “Commerce and Coalitions: How Trade Affects Domestic
Political Alignments” in International Political Economy:
Perspective on Global Power and Wealth (4 th ed.), edited by Jeffry
A. Frieden and David A. Lake. Boston: Routledge, 2000.
Shinawatra, Thaksin (in Thai). “Free Trade Agreement: Opportunities for
Business.” Keynote Speech by Prime Minister Thaksin Shinawatra,
110
IN TE RN A T I O N AL P U BL I C P O L I CY R E VIE W
February 19 th , 2004 at the Federation of Thai Industries’ Seminar
on Free Trade Agreements, UNESCAP (2004).
Solingen, Etel. ‘ASEAN, Quo Vadis? Domestic Coalitions and Regional
Cooperation’ Contemporary Southeast Asia vol. 21, no. 1 (1999):
pp30-53.
TDRI (in Thai). “Report of the Study on Impacts from Thailand-United
States Free Trade Agreement.” Thailand Development Research
Institute, Bangkok, Thailand (2003).
———. “Sub-topic Study Number 2: Preliminary Analysis on the Impact
from Thailand-Japan Free Trade Agreement.” Thailand
Development Research Institute (2005) at www.ftadigest.com.
TDRI, “FTA Digest”, www.ftadigest.com.
The
Economist,
“Country
Briefings:
Thailand,”
2004.
www.economist.com.
The Nation, “Furore over Steel ‘Cave-in,’” April 5, 2005 via FTA Watch,
http://www.ftawatch.org/cgi-bin/content/newse/list.pl.
———. “Push for FTAs with US, Australia and Japan by Year’s End,”
February 20. 2004 via FTA Watch, http://www.ftawatch.org/cgibin/content/newse/list.pl.
———. “Thai-Japan FTA Talks: Warning from Carmakers,” April 8,
2005
via
FTA
Watch,
http://www.ftawatch.org/cgibin/content/newse/list.pl.
Treerapongpichit, Busrin, “Local Manufacturers Cry Foul Over Change in
Stance on Steel,” Bangkok Post, April 4, 2005 via FTA Watch,
http://www.ftawatch.org/cgi-bin/content/newse/list.pl.
Unger, Danny. Building Social Capital in Thailand: Fibres, Finance, and
Infrastructure. Cambridge: Cambridge University Press, 1998.
USTR (United States Trade Representative). “Letter to House of
Representatives on Intent to Negotiate FTA with Thailand.”
USTR (2004) at www.ustr.gov.
———. “Letter to Senate on Intent to Negotiate FTA with Thailand.”
USTR (2004) at www.ustr.gov.
US-Thailand FTA Business Coalition. “US-Thailand FTA Business
Coalition.” http://www.us-asean.org/us-thai-fta/
World Bank. “Thailand Economic Monitor.” World Bank Thailand Office
(2005) www.worldbank.org.