Hostname: page-component-78c5997874-dh8gc Total loading time: 0 Render date: 2024-11-14T09:32:09.489Z Has data issue: false hasContentIssue false
  • English
  • Français

The Decline of Global Economic Governance and the Role of the Transatlantic Powers

Published online by Cambridge University Press:  20 January 2017

Heribert Dieter
Heribert Dieter*
Affiliation:
German Institute for International and Security Affairs
Get access Rights & Permissions [Opens in a new window]

Abstract

Although the global economy has flourished in the current global economic governance regime, the foundations of this order are starting to crumble. Both in trade and in finance, the existing institutions are under severe stress. In trade, more and more countries undermine the WTO by implementing preferential trade agreements. In finance, the IMF has been weak for most of this decade, although it experienced a revival in the current crisis. First and foremost, this weakness of the institutions of global economic governance is the result of policies implemented by the transatlantic powers. Both the European Union and the United States are actively pursuing policies that weaken the existing institutions. In trade, there is a large gap between the official rhetoric, which highlights the importance of the multilateral regime, and the trade policy practice, which is weakening the WTO. In finance, the transatlantic powers have until very recently blocked any progress in the IMF with regard to lending policies. In addition, the EU continues to defend its unjustified overrepresentation in the IMF's governance structures. The article suggests that one of the key explanations for this development is the weak support for globalization in most OECD-countries. Confronted with no enthusiasm for globalization in their domestic constituencies, policy makers in Europe and the United States are increasingly opting for policies that will, over time, erode the existing regimes of global economic governance.

Keywords

tradefinanceWTOIMFglobalization
Type
Article
Information
Business and Politics , Volume 11 , Issue 3 , October 2009 , pp. 1 - 23
Copyright
Copyright © V.K. Aggarwal 2009 and published under exclusive license to Cambridge University Press 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Aggarwal, Vinod and Urata, Shujiro. eds. 2006. Bilateral Trade Agreements in the Asia Pacific. Origins, Evolution and Implications. London: Routledge.Google Scholar
Altmann, Roger C. 2009. “Globalization in Retreat. Further Geopolitical Consequences of the Financial Crisis.” Foreign Affairs 88 (4): 2–7.Google Scholar
Baldwin, Richard. 2006. Managing the Noodle Bowl: The fragility of East Asian Regionalism. January 2006. CEPR Discussion Paper No. 5561, London: Centre for Economic Policy Research.Google Scholar
BBC World Service. 2008. “Widespread Unease about Economy and Globalization”, February 2008. Available online at: http://www.world-publicopinion.org/pipa/pdf/feb08/BBCEcon_Feb08_rpt.pdf.Google Scholar
Bhagwati, Jagdish. 2005. “Reshaping the WTO.” Far Eastern Economic Review 168: 1–5.Google Scholar
Blinder, Alan S. 2007. How Many US Jobs Might Be Offshoreable?, CEPS Working Paper 142, Brussels: The Centre for European Policy Studies.Google Scholar
Dallek, Robert. 1979. Franklin D. Roosevelt and American Foreign. Policy, 1932–1945. New York: Oxford University Press.Google Scholar
Davis, Christina L. 2006. “Do WTO Rules Create a Level Playing Field? Lessons from the Experience of Peru and Vietnam.” In Developing Countries and the Trade Negotiation Process, edited by Odell, John. Cambridge: Cambridge University Press.Google Scholar
Dent, Christopher. 2003. “Networking the region? The emergence and impact of Asia-Pacific bilateral free trade agreement projects.” The Pacific Review, 16 (1): 1–28.Google Scholar
Dieter, Heribert, and Higgott, Richard. 2003. “Exploring alternative theories of economic regionalism: From trade to finance in Asian co-operation?” Review of International Political Economy 10 (3): 430–455.Google Scholar
Dieter, Heribert, and Higgott, Richard. 2007. “Linking Trade and Security in Asia: Has Washington's Policy Worked?” Aussenwirtschaft. Schweizerische Zeitschrift für internationale Wirtschaftsbeziehungen 62 (2): 151–174.Google Scholar
Dieter, Heribert. 2005. Die Zukunft der Globalisierung. Zwischen Krise und Neugestaltung. Baden-Baden: Nomos-Verlagsgesellschaft.Google Scholar
Dieter, Heribert. 2006. “Australia's Bilateral Trade Agreement with the United States: Significant Drawbacks, Few Gains?” Journal of Australian Political Economy, 57 (June 2006): 85–111.Google Scholar
Dieter, Heribert. 2009. “The Multilateral Trading System and Preferential Trade Agreements: Can Their Negative Effects be Minimised?” Global Governance. A Review of Multilateralism and International Organizations 15 (3): 393–408.Google Scholar
Elliott, Kimberly, and Hufbauer, Gary. 2002. „Ambivalent Multilateralism and the Emerging Backlash: The IMF and the WTO.” In Multilateralism and US Foreign Policy: Ambivalent Engagement, edited by Patrick, Stewart, and Forman, Shephard, Boulder, Colorado: Lynn Rienner.Google Scholar
Times/Harris, Financial. 2007. “Monthly Opinions of Adults from Five European Countries and the United States”, http://www.harrisinteractive.com/news/ftharrispoll/hi_financialtimes_harrispoll_july2007.pdf.Google Scholar
International, Gallup (2006), Voice of the People 2006. What the World thinks on Today's Global Issues, Zurich: Gallup International Association.Google Scholar
Garnaut, Ross, and Vines, David. 2006. Sorting out the Spaghetti. On Reducing the Damage from the Proliferation of Discriminatory Regional Free Trade Areas. Unpublished paper. New York: Initiative For Policy Dialogue (Columbia University).Google Scholar
Ikenberry, G. John. 2008. “The Rise of China and the Future of the West.” Foreign Affairs 87 (1): 23–37.Google Scholar
Irwin, Douglas. 2002. Free Trade under Fire. Princeton/Oxford: Princeton University Press.Google Scholar
Jakob, Thinam, and Fiebinger, Gernot. 2003. “Preferential Rules of Origin — A Conceptual Outline.” Intereconomics 38 (3): 138–146.Google Scholar
Kawai, Masahiro. 2007. “Dollar, Yen, or Renminbi Bloc?” In Toward an Asian Exchange Rate Regime, edited by Chung, Duck-Koo and Eichengreen, Barry. Washington, D.C.: Brookings Institution Press.Google Scholar
Lee, Jong-Wha, and Park, Innwon. 2005. “Free Trade Areas in East Asia: Discriminatory or Non-discriminatory?” The World Economy 28 (1): 21–48.Google Scholar
Lind, Michael 2009. “The Next Big Thing: America.” Foreign Policy, May/June 2009. Available online at http://www.foreignpolicy.com/story/cms.php?story_id=4848.Google Scholar
Maddison, Angus 2001. The World Economy. A Millenial Perspective. Paris: OECD.Google Scholar
Milner, Anthony 2003. “Asia-Pacific Perceptions of the Financial Crisis: Lessons and Affirmations.” Contemporary Southeast Asia 25 (2): 284–305.Google Scholar
Morrison, Rodney J. 1993. “The London Monetary and Economic Conference of 1933: A Public Goods Analysis.” The American Journal of Economics and Sociology 52 (3): 307–322.Google Scholar
O'Brien, Anthony. 2001. “Smoot-Hawley Tariff”. EH.Net Encyclopedia, Available online at: http://eh.net/encyclopedia/article/obrien.hawleysmoot.tariff.Google Scholar
Pauwelyn, Joost. 2003. “How to Win a World Trade Organization Dispute Based on Non-World Trade Organization Law?” Journal of World Trade 37 (6): 997–1030.Google Scholar
Pempel, T.J. 2006. “The Race to Connect East Asia: An Unending Steeplechase.” Asian Economic Policy Review 1: 239–254.Google Scholar
Polaski, Sandra. 2007. US Living Standards in an Era of Globalization, Carnegie Policy Brief, 53. Washington DC: Carnegie Endowment for International Peace.Google Scholar
Political Transcript Wire. 2007. Rep. Barney Frank holds a hearing on the economy, the labor market and monetary policy. February 16, 2007.Google Scholar
Ravenhill, John. 2003. “The new bilateralism in the Asia Pacific.” Third World Quarterly 24 (2): 299–317.CrossRefGoogle Scholar
Ruggie, John. 1982. “International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order.” International Organization 36 (2): 379–415.Google Scholar
Samuelson, Paul A. 2004. “Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization.” Journal of Economic Perspectives 18 (3): 135–146.Google Scholar
Scheve, Kenneth F., and Slaughter, Matthew J. 2007. “A New Deal for Globalization.” Foreign Affairs 86 (4): 34–47.Google Scholar
Commission, Warwick. 2007. The Multilateral Trading Regime: Which Way Forward? The Report of the First Warwick Commission. Warwick: University of Warwick.Google Scholar
Whalley, John. 2008. “Recent Regional Agreements: Why So Many, Why So Much Variance in Form, Why Coming So Fast, and Where Are They Headed?” The World Economy 30 (3): 517–532.Google Scholar
Williamson, John. 2009. Understanding Special Drawing Rights (SDRs). Policy Brief 09–11. Washington DC: Peterson Institute for International Economics.Google Scholar
World Trade Organization 2007. World Trade Report 2007. Geneva: World Trade Organization.Google Scholar
World Trade Organization. 2004. The Future of the WTO. Addressing Institutional Challenges in the New Millennium. Geneva: World Trade Organization.Google Scholar
Ziltener, Patrick. 2005. „Die Verhandlungen über bilaterale Wirtschaftsabkommen zwischen Japan und den ASEAN-Ländern, 2000–2005.” Aussenwirtschaft 60 (3): 279–304.Google Scholar
Zuckerman, Mortimer. 1999. “A Second American Century.” Foreign Affairs 73 (3): 18–31.Google Scholar