This chapter examines India’s emergence as a key player in the World Trade Organization (WTO) within the context of its foreign policy. It considers plausible mainstream explanations for India’s apparent rise to power, including growing market size, changing ideology, and the role of domestic interest groups in influencing foreign economic policy. It suggests that India’s emergence as a major player in the WTO can be explained by its negotiation behaviour. More specifically, it shows that India’s rise in the WTO is a product of decades of learning to negotiate within the specific multilateral rules of the organization (as well as its predecessor, the General Agreement on Tariffs and Trade (GATT)). The chapter also considers some of the problems that India’s WTO diplomacy raises within the trade context as well as its broader foreign policy goals.
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Michael Mastanduno
This chapter explores the link between economic instruments of statecraft and the broader foreign policy goals and strategies of states. Economic sanctions are used in conjunction with diplomatic and military measures in response to foreign policy problems and opportunities. However, they are not always effective. The chapter begins with a discussion of the instruments and objectives of economic statecraft, including trade restrictions, financial sanctions, investment restrictions, and monetary sanctions. It then explores the potential of economic incentives as a tool of statecraft and the question of whether economic interdependence leads to harmony, as liberals believe, or conflict among states, as realists predict. It shows that economic interdependence can either lead to peace or conflict depending on the future expectations of policy makers, the nature of the military balance, and the form that economic interdependence takes.
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Silke Trommer
This chapter details the history, politics, and recent trends and challenges of the multilateral trade system. The twentieth century witnessed a remarkable emergence of international institutions, and nowhere was their impact greater than in international trade. Following decades of depression and war, a global trading regime was initiated with the creation of the General Agreement on Tariffs and Trade (GATT) in 1947, which expanded steadily in both scope and membership through the twentieth century and culminated in the establishment of the World Trade Organization (WTO) in 1995. Underpinned by the philosophy that open markets and non-discriminatory trade policies promote the prosperity of all countries, and issued with a powerful dispute settlement mechanism, the WTO has been hailed as the most prominent example of cooperation between countries. At the same time, however, the WTO has been subject to internal and external criticism and now faces a number of difficulties.
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Leslie Elliott Armijo
This chapter examines Brazil’s emergence as a global power, with a particular focus on how the country has striven to play a bigger role on the international scene. It first provides a brief historical background on Brazil before discussing contemporary Brazilian foreign policy — especially its leaders’ vision of the country as a consequential global player in an increasingly multipolar world. This is seen through the active campaigning for continental integration in which Brazil has played an important role by means of several initiatives. The chapter explores Brazilian foreign policy initiatives in four global issue arenas: trade, climate, financial governance, and nuclear proliferation. It concludes with the suggestion that in terms of material power resources and influence, Brazil was not a global power in the twentieth century, even as it notes the country’s aspiration to become a major international player in the early twenty-first century.
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Anatol Lieven
This chapter considers future prospects for US foreign policy on the basis of long-established patterns and other factors such as the interests and ideology of elites, the structures of political life, the country’s real or perceived national interests, and the increasingly troubled domestic scene. It first examines the ideological roots of US foreign policy before discussing some of the major contemporary challenges for US foreign policy, including relations with China, US military power, and the US political order. It then describes the basic contours of US foreign policy over the next generation with respect to the Middle East, the Far East, Russia, Europe and the transatlantic relationship, climate change, and international trade. It also presents catastrophic scenarios for American foreign policy and argues that there will no fundamental change in US global strategy whichever of the two dominant political parties is in power.
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John Dumbrell
This chapter examines U.S. foreign policy debates and policy management under the direction of George H. W. Bush and Bill Clinton. It first provides an overview of post-Cold War American internationalism before discussing the so-called ‘Kennan sweepstakes’: a conscious effort to find a post-Soviet statement of purpose to rival George Kennan’s early Cold War concept of ‘containment’ of communism. It then considers U.S. foreign policy making in the new order and in the post-Cold War era. Both the Bush and Clinton administrations wrestled with the problem of deciding on a clear, publicly defensible, strategy for U.S. foreign policy in the new era. Clinton’s first term was dominated by free trade agendas and by efforts to operationalize the policy of ‘selective engagement’, while his second term involved a noticeable turn towards unilateralism and remilitarization. The New World Order was Bush’s main contribution to thinking beyond the Cold War.
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Deborah Bräutigam and Yunnan Chen
This chapter examines China’s South–South relations and how it has been shaped by the nature of the Chinese state: a highly capable, developmental state that uses an array of instruments to promote its interests. In particular, it considers how, by means of foreign aid, economic cooperation, soft power, and trade, China aspires to be seen as a responsible global power. The chapter first looks at the history behind China’s engagement with countries of the Global South and the instruments that it has employed in this regard such as foreign investment, commercial loans, and soft power tools. It shows that Chinese ties with the developing world are shaped by long-standing foreign policy principles, including non-interference in the internal affairs of others, equality, and mutual benefit, along with its embrace of globalization and the growth of its multinational corporations. The chapter concludes with an assessment of concerns regarding China’s international engagement.
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Matthew Watson
This chapter focuses on the historical origins and the subsequent intellectual lineage of the three core theoretical positions within contemporary global political economy (GPE): realism, liberalism, and Marxism. ‘Textbook GPE’ privileges nineteenth-century understandings of political economy when discussing the pre-history of its own field. This helps explains GPE's treatment of feminist scholarship within the textbooks; feminism remains largely marginalized from textbook GPE, presented as something of a postscript to avoid accusations of it having been omitted altogether rather than being placed centre stage in the discussion. The chapter then looks at how the nineteenth-century overlay operates in textbook GPE. To do so, it makes sense to concentrate in the first instance on the issue that did most to divide nineteenth-century economists: namely, the free trade policies resulting from the general ascendancy of laissez-faire ideology. The most celebrated of the critics, Friedrich List, is treated much more as a dependable authority figure in GPE than he is in the history of economic thought. Indeed, in textbook GPE, the disputes between realist and liberal positions is very often presented initially through an account of List's work, despite the pre-history of liberalism being much the longer of the two.
