Power: As a Relationship Within Global Trade
By: Jacob F. Alexander
Poli 344: International Political Economy
Dr. Sarah E. Sharma
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Trade was not formed through new-age technologies, unlike many of the aspects of the
lives of the people of the 21st Century. Trade is this pre-historic concept; archeologist suspect
trade was first practiced within the Mesopotamian Tribes in 6000 BC. Trade started as a gift
exchange economy, the growth of trade and trade networks correlating with civilizations'
development. The early models shifted trade away from the humble roots of a gift exchange
economy to focus on competition and profits. Early models rooted trade as state-centric, only to
move again in the 1980s to encompass neo-liberalism, reinforcing financial de-regulation. These
ever-changing tides of trade shift along the changes to the global political systems. But why is
trade so important? Trade affects everyday life; the global pandemic showed the average
Canadian how reliant we are on the global trade system. The freedom conveys' protest of supply
chains led many Canadians to understand that our trade systems could be easily crippled. Trade
has shaped generations; many, myself included, only know trade as being neo-liberal, rooting
itself into a generation that has become reliant on the ease of trade through their reliance on the
internet.
The private authority of the Global Trade Regime (GTR) has experienced a power shift
from the State to companies and corporations. Although the power shift has been produced by
the upward growth trends within private sectors: a by-product of the changes to markets and their
structures, reinforced by the alteration of internal goals within companies and corporations.
This paper will attempt to discuss how the power shift of the GTR is reinforced through
the changes in markets and market structures. As well as the reinforcement of power (not just the
shift) due to the internal changes within businesses and corporations. Finally, the Private
Authority is capable of creating power for themselves due to their increase in size.
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Framework
The complexity of this topic is not from the conceptualization of the argument; instead, it
is due to the complexity of International Political Economy (IPE) discourses. Thus, this section’s
purpose is to supply the framework of the approach(s) alongside definitions of ideas and
concepts to assist the conceptualization process.
I draw from both Critical IPE and Post-Structuralism within this paper. I have chosen to
use these two approaches as they present the most current reality of IPE. Critical IPE has been
selected for its structure. (Referred in week 3 Lecture as "Building Blocks of Critical IPE). This
four-block structure: Global, Capitalist, Class-Based, and Crisis and Conflict Ridden allows one
to view the form of the reality of IPE. It provides a framework for how capitalism exerts its
control at the global scale. One must understand that these blocks are requirements for the
success of capitalism within the GTR. Another key concept within the Critical IPE approach is
the Core-Periphery Model. Although this model was a lens that pre-dated trade liberalization,
this concept allows one to conceptualize the required forms of inequality within the capitalistic
system. While Critical IPE is used to understand the presented reality of the GTR, PostStructuralism is essential in understanding the non-reality aspect of IPE and, thus, the GTR.
Post-Structuralism is an approach rooted within a linguistic history, focusing heavily on
the importance of narratives within IPE. Unlike Critical IPE, understanding the reality, the PostStructuralism approach is used to assist in conceptualizing the discourse within IPE. This
'discourse' structures the changes within systems. In other words, discourse is the start of the
engine of change. The cold crank that produces the first form of combustion that eventually
drives change forward, escaping the minds of scholars and flowing outwards into reality.
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Post-Structuralism is a post-positivism approach; they reject scientific knowledge of the
social phenomenon, viewing truth and knowledge not as empirical evidence and fact but as
socially constructed subjective concepts (Week 4 Lecture). The concept and definition of power
are pretty different through a Post-Structuralist approach. Power is not a commodity, nor is it
State centric. It operates through various levels and is produced through the social and cultural
interactions of people within their Nations. This definition of power is essential for this paper
because it allows one to understand that power structures are formed through their narratives.
Power is only granted because people have chosen, inherently or not, that a person, State,
institution, or firm should be given it. Although a more extensive section discusses and
introduces Post-Structuralism, it is not the sole approach. It will be used alongside Critical IPE to
understand how the power relationship within the GTR has shifted.
Within this section, I have already defined a few concepts and ideas: Critical IPE, PostStructuralism, Discourses, Post-Positivism, and Power. There are three more yet to be defined:
Global Trade Regime (GRT), Trade Liberalization, and Private Authority.
The Global Trade Regime is the global economy. You may find yourself asking, why not
use the global economy instead? Oxford defines a regime as "a system or planned way of doing
things, especially one imposed from above." by using GTR, it shifts the focus away from being
purely economic. It is considered a regime because the GTR was introduced through the
Government's trade liberalization actions, imposing this trading system onto the global economy.
Trade liberalization is the act of de-regulating trade through the financial markets of the
GTR. It became popular with the introduction of Neo-liberalism policy and politics in the 1980s.
Trade liberalization, in essence, is one of the key reasons why there is a power shift. Without this
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deregulation of trade, our global economy would be less Free-Trade, and companies and
corporations would be regulated through the State and its State-led actors.
Private authority, within this paper, is a term used to describe the whole of the private
sector. It is not just the firms, businesses, and corporations. It is used to include NGOs, markets,
and any other private bodies that have the capabilities to affect the private sector.
Discussion
The Private Authority has been experiencing growth since trade liberalization during the
1980s. The growth of Private Authority correlates with the increase of power caused by the
powershift of the GTR. These forms of growth present themselves in various ways. There has
been a notable increase in cooperation within the international private sectors, seeing an increase
in transnational corporations creating growth in scale, scope, and intensity of the economic
integration (Cutler, 1999, p.5). These acts of increased cooperation throughout the Private
Authority have affected and reinforced the power shift for three main reasons: many firms
already have large amounts of resources at their disposal, with the allocation of resources
responding to competition and cooperation. The norms, practices, and rules established by these
firms affect the opportunities presented to the rest of society. And finally, the cooperation of
firms challenges how one perceives the character of Public Authority (Cutler, Haufler, and
Porter, 1999, 6). One can see how the increase of power presents itself through the
implementation of Trade-Related Aspects on Intellectual Property Rights (TRIPS) during the
Uruguay trade negotiation rounds. The chairmen of the Advisor Committee for Trade
Negotiations (ACTN) was the CEO of Pfizer Pharmaceutical; this not only allowed for an
"official channel for business people to provide private sector consultation to the president."
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(Sell, 2010, 771), but also allowed for the CEO's of IBM and Pfizer to lobby for intellectual
property rights to be added to the agenda of the Uruguay rounds (Sell, 2010, 771). Although this
was not the first case study that would show the powershift in action, this case study allows us to
see a direct example of how increased cooperation among firms have reinforced power and
consequently affect the GTR.
Economic markets have always been fluid; for a business to succeed without Government
regulation, being fluid and adaptive to the changing futures is detrimental to their success. We
can dissect how market changes enhance the power shift through analysis of Fair-Trade Products
(FTP) markets. First, you must understand that "the relationship between fair trade consumers
and producers is a purely market-based relationship" (Archer & Finch, 2010, p. 111). If this is
true, which Archer and Finch believe, this market-based relationship defines the prices and
productions of FTPs. Secondly, is understanding that firms within the FTP markets have created
niche markets (Archer & Fritsch, 2010). Since the Private Authority carries the capacity to create
niche markets through their trade networks, they can exert market control through the creation of
these niche markets, resulting in higher-priced goods due to 'niche markets' lowering supply.
Because the consumer-producer relationship is market-based, it only reinforces the higher prices
of FTP created through the niche markets. This incentive for market control can also be seen
through the shifting role of companies working within the Global South markets. Companies are
expanding their role, shifting to act more as development agents (Blowfield & Dolan, 2014).
This shift into development agents rather than development tools allows companies to engage in
new narratives that seek to control markets, and thus, maintain the power of the Private
Authority.
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This shift of internal goals within companies that previously acted as development tools
into development agents is essential in understanding how the Private Authority can maintain its
power—constructing new narratives that morph ideas that firms now act on ethics and morals.
This can also be seen with NGOs in FTP markets, as they "increase transparency and dialogue in
international trade relations by reincorporating moral and ethical aspects and stressing the social
aspects of trade and consumption" (Archer & Fritsch, 2010, p. 110). This creation of new
narratives where the Private Authority is attempting to be viewed as ethical through the eyes of
the public. It is an attempt to gain and maintain power through the social and cultural sectors of
life, because if they are not considered villains, then those over whom they exert their control
over would be more lenient with their actions that produce inequality. We can also see how
narratives affect the discourse regarding the GTR through Rorden Wilkson's Talking Trade.
Where Wilkson sees the issues regarding the metaphors and narratives of trade negotiations. The
construction of narratives in trade negotiations shapes the political actors, this is seen with
'infant' when describing developing countries. It shapes the perception of these countries as if
they needed the assistance and guidance of a parent, which would be a Global North country.
Narratives shape the reality of the GTR through the creation discourse within the IPE, and by
altering the public perception. This results in a power shift through the social and cultural sectors
of the GTR.
Conclusion
This power shift of the GTR is not new. It has been slowly happening over the last four
decades, starting in the early 1980s while only becoming more prominent in the 2000s. The
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power of the GTR has shifted, moving away from the State and into the Private Authority. This
results from the increased growth of the Private Authority. The growth has created an
environment for the power shift to be successful, it is through the cooperation between firms and
private sector actors that the Private Authority could fully begin to grow. Allowing firms to have
greater market control. We can also see the pivotal role narratives have; the act of reconstructing
and creation of narratives reinforces the power of the Private Authority, it is integral to their
success
We can analyze this power shift through the Critical IPE and Post-Structuralism
approach. Companies have used narratives to change how they are perceived, resulting in this
facade of higher morals and ethics, hoping to expand their profits by acting as development
agents. Instead, they still enforce inequality. The need for the four-building blocks has become
foundational to the Private Authority, the changes to markets and structures allow one to see the
reliance on the Global 'block'; markets produce power, thus having control over global markets
creates the capability to produce, and maintain, forms of power. At the same time, the exertion of
power shows 'blocks' four: Crisis and Conflict Ridden. This need for crisis stems from the idea
that crisis creates discourse, and discourse creates change. By exerting their power, discourse
shall be started, yet since the Private Authority already contains power, they can shape the
discourse to be in their favour. This is how TRIPS was formed, a type of regulation that protects
businesses—cementing this idea that because power is shifting to the Private Authority, they can
only give it up.
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Bibliography
Sell, K, S. (2010) The rise and rule of a trade-based strategy: Historical institutionalism and the
international regulation of intellectual property. Review of International Political
Economy, 17(4), 762-790. https://doi.org/10.1080/09692291003723722
Cutler, C., Haulfer, V., & Porter, T. (1999). Private Authority and International Affairs. 3–28.
Wilkinson, R. (2015). "Talking Trade: Common sense Knowledge in the Multilateral Trade
Regime" in Expert Knowledge in Global Trade 21-40.
Archer C., & Fritsch S. (2010). Global Fair Trade: Humanizing Globalization and Reintroducing
the Normative to International Political Economy. Review of International Political
Economy, 17(1), 103-128. https://doi.org/10.1080/09692290902725002
Blowfield, M., & Dolan, S. (2014). Business as a Development Agent: Evidence of Possibility
and Improbability. Third World Quarterly, 35(1), 22–42.
https://doi.org/10.1080/01436597.2013.868982