A few groans and sarcastic laughter emerged from the crowd. While comforted by the fact that it wasn't just me who didn't understand the rules for trade into China, I was struck by the palpable anxiety surrounding these rules among representatives of powerful transnational merchant firms, a handful of who controlled about 50 percent of the transnational cotton trade. As they debriefed the Chinese presentation, I saw that it had also put them on edge. They wanted the Chinese government to adopt their cotton quality standards, they explained to me, and they would be heading to China to address this issue.
Contestation over who makes the rules for the global economy—and who can enforce the rules—would not be easily resolved. Conflicts in the cotton trade make this much clear: we are in an era of uncertainty over the rules that govern global economic integration. Historically, Western firms and states have largely set the rules for global trade. But today they face new challenges with the shift to an Asia-centered economy. The WTO is at a stalemate as a rising group of firms and states are questioning the legitimacy of trade rules that privilege the West. At the same time, the Chinese state is raising the ire of powerful transnational corporations who can no longer simply impose the rules of the game.
Long Run Trends and Fluctuations In Cotton Prices - Munich Personal RePEc Archive
These are not struggles unique to the cotton trade. These new axes of conflict are rippling across the economy. In the controversial case of censorship and cyber attacks between China and the global corporate giant Google, a representative from the Chinese Foreign Ministry warned that Google must adhere to China's laws and regulations if it wanted to access the growing Chinese market Wong et al. Trade disputes between China and the United States over exports of tires, chickens, steel, and autos have multiplied Cha Put simply, this is a period of hegemonic rivalry.
The United States and China are competing on a multitude of fronts over which states and firms will claim the dominance and legitimacy necessary to set the rules governing the global capitalist system. Nowhere are these tensions more evident than in the simmering standards wars between China and the West. These are struggles not over whether global economic integration should advance, but over what kind of integration is desired and on whose terms in a period of hegemonic struggle.
Despite deep conflicts, we also see new forms of engagement. Private, state, and civil society actors are rapidly constructing new transnational governance institutions to tackle a wide range of issues, from the harmonization of quality standards to the enforceability of contracts across borders. This transnational cooperation amid a crisis of Western legitimacy raises critical questions. Who makes the rules? How do powerful Western actors construct governance institutions that are enforceable? Under what conditions are the emerging non-Western corporate elite and their state allies, as well as more marginalized firms and states, able to recast the rules to better serve their interests?
This book represents an effort to explore these questions through a study of negotiations over transnational quality standards in the contemporary cotton trade. In this book, I chart a new course for understanding how the rules of the game are made and remade in the global arena. Many attempts to map change in governance institutions emphasize the high degree of uncertainty and hybridity that characterizes institutional transformations in the current era.
A rigid world of interstate treaties has been replaced by fluid interactions within more amorphous and diverse "transnational communities" or "webs of influence" Djelic and Quack ; Braithwaite and Drahos New forms of "experimentalist" governance are emerging as actors try to respond flexibly to a shifting terrain Sabel and Zeitlin It seems that the foundations of economic governance are "disaggregating" beneath our feet see Slaughter These are not shock-like transformations in institutions but rather incremental changes that are nonetheless transforming the rules of the game.
These accounts provide valuable descriptions of how institutional arrangements are changing. What they lack is a robust explanation of why institutions change.
Standards Wars and the Transnational Cotton Trade
We are instructed to expect incremental movements toward "something entirely new, unexpected, unanticipated and emergent" Djelic and Quack a However, we are not given the tools to understand why such incremental yet transformational changes should be expected or why certain emergent outcomes might be more likely than others.
The future trajectory of institutional change is indeed uncertain and the stakes are high. As diverse actors—from firms and government agencies to lawyers, scientists, and agricultural producers—struggle over what rules will prevail, profits are made and lost, jobs move from one country to another, and economic superpowers are born or wither away. It is thus imperative that we garner the theoretical tools to make sense of this uncertainty and chart the range of future possibilities.
The crux of my argument is this: hegemonic rivalries shape strategies to change institutions. As coalitions of powerful firms and states create institutions to expand the scale and scope of the global economy, they unleash new competitive dynamics that both give rise to new rivals that seek to take control of these institutions and generate marginalized actors that seek to challenge their destructive effects.
Periods of uncertainty over whose rules will prevail in the global economy are thus the result of the patterns of conflict generated by projects of market liberalization. Log out of ReadCube.
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