Ideas in international trade: the role of programmatic beliefs in the EU and China's approaches to the WTO DSM

Abstract

This research project investigates the role of domestic normative ideas in the approaches of the European Union (EU) and China in the World Trade Organisation (WTO) dispute settlement mechanism (DSM). Scholars have differentiated between normative beliefs as those ideas that help actors to distinguish just from unjust, and causal beliefs as those ideas that provide a framework on how to act. I categorise worldviews and programmatic beliefs as normative ideas, and policy actions as closer to causal ideas. This thesis answers the question: how and why do normative ideas affect the different approaches of the EU and China in the WTO DSM? The study examines the legalistic belief of the rule of law, and the economic belief of free trade of the Directorate-General (DG) for Trade of the European Commission; and the legalistic belief of peaceful coexistence and the economic belief of State-led economic growth of the Ministry of Commerce (MOFCOM) of China.

I argue that programmatic beliefs guide actors’ policy action in the WTO DSM, and that different sets of programmatic beliefs lead to different approaches to international trade dispute settlement. Normative ideas that are aligned with international institutions make states more eager to address concerns in international trade dispute settlement. At the same time, states whose programmatic beliefs are not aligned with international institutions are more reluctant to use international dispute settlement mechanisms.

Through document analysis and process tracing, the study maps the worldview and the main programmatic beliefs from the establishment of the EU to the Uruguay Round, and from the open-door policy of China to its accession to the WTO, analysing three different timeframes over twenty years (2001-2008, 2009-2017, 2018-2021). The study finds that change in actors’ approaches is due to their programmatic beliefs. The EU and China have changed their approaches in the WTO DSM either to align it to their pre-existing programmatic beliefs, or to internalise new external information. The study shows how the EU relied on its liberal worldview and programmatic beliefs to navigate the different crises encountered during the three timeframes analysed. The EU changed its approach to the WTO DSM to follow its domestic programmatic beliefs. European programmatic beliefs were reinforced by the EU’s activity in the WTO DSM, as they were in line with the normative framework on which the WTO was built. The study finds that change in the Chinese approach to the WTO DSM was connected to the internalisation of new information on the Western concept of the rule of law in the Chinese normative belief of the rule by law. Internalisation has been understood as the process that allows programmatic beliefs to acquire external information, leading to a change in policy action in international institutions. Ultimately, the study shows how new information is internalised through pre-existing sets of beliefs, demonstrating how and why programmatic beliefs matter in international trade dispute settlement.