Negotiating Membership in the WTO and EU

Jamie Scalera, Jamie E. Scalera

• Publisher: Routledge
• Year: 2017
• Print ISBN: 9781472488572
• eBook ISBN: 9781351856737
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

With the accession of Afghanistan in 2016, the World Trade Organization (WTO) numbered 164 members with nineteen other states in line to join. The WTO is certainly not alone in its growth though; the Organization for Economic Cooperation and Development (OECD), the North Atlantic Treaty Organization (NATO), and the European Union (EU) are all expanding with dozens of states continuing to negotiate their potential membership. What impact does membership in international organizations really have? Why do some states have a seemingly easy path to joining international organizations while others find the process nearly impossible? What implications do these difficult accession processes have on the domestic and international politics of the acceding states? The author presents the two-level theory of accession, which highlights factors at the domestic level and international organization level, to explain how accession processes in the WTO and EU vary from state to state and the impact of these variations. In so doing, this book provides a unique perspective on the topic of membership in international organizations.

1
Why accession matters

On July 29, 2016, the World Trade Organization (WTO) welcomed Afghanistan as its one-hundred-and-sixty-fourth member. With 19 other states in line to join the organization, the WTO is currently one of the fastest growing international organizations (IOs) (WTO, 2016). The WTO, however, is certainly not alone in its growth. In 2016, Latvia joined the Organization for Economic Cooperation and Development (OECD), and four more countries—Colombia, Costa Rica, Lithuania, and Russia—were in line to begin the process (OECD, 2016).¹ Four countries—Bosnia and Herzegovina, Georgia, Montenegro, and the former Yugoslav Republic of Macedonia (FYRM)—were also negotiating membership in the North Atlantic Treaty Organization (NATO, 2015). In the European Union (EU), Croatia became the newest member in 2013, five states—Albania, FYRM, Macedonia, Montenegro, Serbia, and Turkey—were considered official candidate countries, and two others—Bosnia and Herzegovina and Kosovo—were in line as potential candidate countries (EU Commission, 2016). In all, dozens of states all across the world continue to follow the trend of joining IOs that has grown exponentially in the last 70 years.

While a multitude of states have joined and continue to join IOs at an ever-increasing rate, important questions remain unanswered regarding the role of IOs in world politics. One of the central guiding questions in International Relations (IR) has been whether and how IOs matter in world politics. Many scholars continue to be divided on this question for both ontological and epistemological reasons. Realists, for instance, contend that international institutions are epiphenomenal and inconsequential to international politics based largely on theoretical assumptions regarding the primacy of states (e.g. Krasner, 1976; Mearsheimer, 1994/1995). Neoliberal institutionalists, in contrast, argue that international institutions have a significant influence on world politics in general and states’ policies in particular (e.g. Keohane, 1984; Keohane and Martin, 1995; Koremenos, Lipson and Snidal, 2001). Recent empirical scholarship continues to fuel this debate by producing contradictory findings regarding the influence of IOs in world politics (e.g. Rose, 2004; Pevehouse, 2005; Goldstein, Rivers and Tomz, 2007; Gray, 2009).

In this project, I step into this debate by turning the focus on one of the most important ways IO matter—through the process of accession. By using accession as a lens for examining this question, I highlight a new approach to studying the relationship between states and IOs, and I uncover surprising answers to some of the key questions in IR.

Accession, or the process by which states join IOs, has been largely overlooked in the debate over whether IOs matter in international politics. The dominant approach has been to view membership in IOs as a simple dichotomous characteristic—either a state is a member of a given organization or it is not (e.g. Rose, 2004; Milner and Kubota, 2005; Ehrlich, 2007). This conceptualization, while widely used in the literature, is based on a flawed understanding of the real process of accession by which states become members of an IO. In some IOs, such as the International Monetary Fund (IMF), states must only sign on to a charter to become a member, meaning there is no process of membership and the terminology of accession is not applicable to these cases (e.g. Simmons, 2000; von Stein, 2005; Simmons and Hopkins, 2005).

However, in many of the most important IOs in world politics, states seeking membership in the organization are required to participate in a more formal process of accession, where states must meet specific criteria for membership and negotiate those criteria with representatives of the IO (Kydd, 2001; Jacoby, 2004). The process of accession in these cases is far from simple, and many states can find themselves somewhere between non-member and member status for many years. Turkey, for instance, is a remarkable example as it has been in the process of joining the EU for over 50 years. Thus, the dichotomous conceptualization of membership completely overlooks these processes of joining and thus completely misses the extensive variation in accession requirements across applicant states in many IOs.

Upon a more careful examination of the accession process across IOs, we find unexpected variation on a number of dimensions, which raises some interesting puzzles to consider. First, there is considerable variation in the duration of the accession process among even very similar states seeking to join the same organization. Take, for instance, the accession of several central and eastern European states to the General Agreement on Tariffs and Trade (GATT) and the EU beginning in the mid-1990s. At the end of the Cold War, nearly all of these states became eligible to join both the GATT/WTO and the EU. Current conceptualizations of membership would have anticipated similar processes for all of these states, since these states all applied to the GATT/WTO and EU under very similar domestic and international conditions. However, in reality, the duration of the process from application to full membership varied significantly.

In the case of the GATT/WTO, for example, Estonia, Lithuania, and the Former Yugoslav Republic of Macedonia applied for membership in the organization in 1994, prior to the transition to the WTO. However, Estonia was granted membership in only 5 years, whereas it took 7 years for Lithuania to become a member and 9 years for Macedonia to become a member of the WTO (WTO, 2016). In the case of the EU, the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovakia, and Slovenia completed their accession processes in 2004, and Romania and Bulgaria joined later in 2007. Croatia completed the process of accession in 2013, and Macedonia has yet to begin its accession negotiations (EU Commission, 2016). In all of these cases, delays in joining the organizations also mean delays in receiving the benefits of membership, such as increased levels of trade, foreign direct investment, or security (Gowa and Kim, 2005; Kim, 2010; Allee and Scalera, 2012). Therefore, the time it takes to complete the process of accession is critical. What explains this variation in the duration of the process of accession to IOs?

Beyond the variation in the duration of accession, the accession process can vary in terms of the difficulty of the negotiations themselves. In both the GATT/ WTO and the EU, applicant states and representatives of the IO negotiate over the terms of membership. In some cases, these negotiations prove to be quite difficult. In the GATT/WTO, for instance, both Cambodia and Vietnam started their accession negotiations in the mid-1990s. While both of these states had similar economies and negotiated their accessions during the same years, the content of these negotiations varied in unexpected ways. As part of its negotiation process, Vietnam was required to sit for 17 different rounds of questioning and answered over 34,000 questions on its domestic trade policy, which is currently a record in the WTO (WTO document WT/ACC/VNM/47, 2006). Cambodia, in contrast, only had to sit for 12 rounds of questioning and answered only 461 questions (WTO document WT/ACC/KHM/21, 2003). Those questions directly affect the extent to which Vietnam and Cambodia were required to make changes to domestic law and therefore have significant, observable consequences. The differences between Vietnam and Cambodia are only one example of the many meaningful differences in the content of the accession negotiations among applicant states to the same IO that the extant literature cannot currently explain.

Finally, there is unexpected variation in the extent to which domestic changes are required as part of the accession process. In the case of both the EU and the WTO, applicant states are required to satisfy a number of criteria for membership. In the case of the EU, these changes often consist of the adoption of the ever-evolving acquis communautaire by domestic legislative bodies and the establishment of domestic bureaucratic agencies to implement these policy changes (Jacoby, 2004). In the case of the GATT/WTO, domestic changes often include legislating changes in tariff rates and establishing new bureaucratic agencies to monitor sanitary standards (Michalopoulos, 1998). Thus, while some scholars continue to doubt the impact of membership on domestic politics, a closer examination of the accession process reveals that domestic political changes are an important requirement of the steps toward membership.

Still, there is surprising variation in the extent to which states make domestic changes. In the GATT/WTO for example, both Bolivia and Costa Rica negoti ated their accessions from 1987–1990. While both of these states had similar economies, these two countries were required to reduce their tariff rates by unexpectedly different percentages. Bolivia committed to a goal tariff rate of 10 percent during its accession whereas Costa Rica was allowed to maintain a tariff rate of 40 percent (GATT document L/6542, 1989; GATT document L/6589, 1989). In addition to these variations, some applicant countries are also granted extra time to phase-in requirements at the domestic level, which often extends well beyond the official membership date (Michalopoulos, 1998). For example, the WTO granted Ecuador three additional years beyond its membership date to implement its final tariff reductions (GATT document L/6794, 1990). However, the same leniency was not granted to Croatia as its accession to the WTO was delayed for over a year to allow for full implementation of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement (WTO document WT/ACC/HRV/38, 1998). These variations are important, because they speak to the influence IOs have on states and the lasting impacts of accession on member ship behavior.

Given these examples, there are important questions about the process of accession that remain unanswered, and I focus on accession to answer the question of whether and how IOs matter in world politics. Specifically, this book will answer two central questions. First, why do some states have a seemingly easy process of joining IOs while other states find the process nearly impossible? Second, how does accession change the internal laws and governing institutions of applicant states? I argue that the outcomes of accession can be explained by the intersection of domestic and international factors, and I propose an original theory that I call the two-level theory of accession. Applicant states with a high level of domestic administrative capacity and domestic public support for accession will have an easy accession process unless they face a high number of IO gatekeepers. Additionally, applicant states will make more domestic policy and institutional changes when they face more scrutiny from IO gatekeepers during accession negotiations.

Ultimately, explaining the variations in accession and the implications that the process of accession has on domestic politics will help to fill in a significant gap in the literature on IOs as well as contribute to a number of broader debates on the impact of international institutions in global politics. First, explaining variation in accession to IOs reveals another way that IOs have leverage over states. Second, this project answers questions about how states can establish domestic political and economic reforms under the cover of accession to IOs. Finally, this project opens the door to future questions about how accession conditions state involvement in IOs once membership is conferred.

In addition to contributing to a number of debates in the current literatures on IOs, I also offer an original theory and empirical study that makes a contribution to these literatures. The theory presented here links domestic politics with international politics showing the influence that these two political arenas have on each other. Additionally, the theory offers a general view of accession that is not specifically tied to one international institution. Finally, I test my theory in multiple empirical contexts using original data that has yet to be considered in other research projects. In these ways, this project makes a number of important contributions in bringing to light an otherwise unexplored—but significant—process in IR.

Organization of the project

In the following chapter, Chapter 2, I develop the two-level theory of accession, an original theoretical approach to understanding the process and implications of accession to IOs. To do this, I first discuss why states join IOs. Then, I develop the two-level theory of accession, highlighting in particular the GATT/WTO and the EU. This theory posits that applicant states with a high degree of administrative capacity and public support for accession will have an easy accession process unless they face a high number of hostile IO gatekeepers. Additionally, applicant states will make more domestic policy and institutional changes when they face more scrutiny from IO gatekeepers during accession negotiations.

In the next five chapters, I use original data to test the empirical implications of the two-level theory of accession in multiple contexts using a multi-method approach. In Chapter 3, I focus on the accession process in the GATT/WTO context and use statistical and case-study analysis to test the two-level theory of accession as it applies to the GATT/WTO context. I introduce an original dataset on all accessions to the GATT/WTO from 1950–2014 that includes unique measures taken from original accession documents. I then conduct a statistical analysis using these data, which I follow up with a case-study analysis on China’s accession to the WTO. Finally, I conclude with a discussion of the implications of these findings for the ongoing accessions to the WTO.

In Chapter 4, I extend my empirical focus on the WTO to examine the implications of the two-level theory of accession for the domestic political and economic environments of applicant states. I identify three categories of domestic changes that states make when joining the WTO: changes to trade policy, changes to the organization of their domestic trade or political system, and changes in domestic governance practices. I argue that states make domestic policy and insti tutional changes as a direct result of the level of scrutiny they face from IO gatekeepers during the accession negotiations. I test this argument with original data on the WTO accession process from 1995–2014. I complement this analysis with two comparative case studies of (1) Albania and Ukraine and (2) Cambodia and Vietnam. Finally, I conclude with a discussion of the implications of these findings for the future of the WTO.

In Chapter 5, I focus on the international implications of accession to the WTO by examining how scrutiny in the accession process determines trade gains. Here, I argue that greater scrutiny during the accession negotiations results in greater levels of trade liberalization, which in turn results in greater trade gains for member states of the WTO. I test this argument using original data on the GATT/WTO presented in Chapter 3. These results demonstrate that states that experience more difficult accession negotiations will have greater trade gains from membership in the WTO.

Chapter 6 focuses...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• Contents
• List of maps and tables
• Preface
• List of abbreviations
• 1 Why accession matters
• 2 The two-level theory of accession to international organizations
• 3 Navigating the rigors of accession in the World Trade Organization
• 4 Domestic political transformation after accession to the WTO
• 5 Trade gains and the rigors of WTO Accession
• 6 Negotiating membership in the European Union
• 7 Scrutiny and domestic policy change during accession to the European Union
• 8 The future of accession to international organizations
• Index