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Vinicius Rodrigues Vieira asserts that the definition of a country’s national interest is influenced by the institutional design of this country’s diplomatic and negotiating authority. In this review, I find his conclusion worth of supporting new research agendas. Yet, I also present what I believe to be limitations of the particular case chosen by Vieira to prove his point. Even if we accept the two ideal types used by the author (e.g., economic-centred versus “blended” trade negotiating authorities), it seems over-simplifying to say that between 2003 and 2008 Brazilian negotiators favoured WTO in lieu of regional or bilateral agreements for reasons linked to international prestige.
In Volume 2, Issue 2 of this ‘Rising Powers Quarterly’, Vinicius Rodrigues Vieira published “Blended Diplomacy: Institutional Design and Brazil’s National Interest in Trade” (2017, pp. 31-35). In this critical review, I intend to firstly present a summary of the points in which we both agree and the reasons why I find his article worth paying attention to. In the second and main session, I attempt to show the shortcomings of the particular case-study chosen by Vieira to prove his point, which, at least in my opinion, suffer from over-simplification. The third, final session brings suggestions for the future research agenda on the topic.
I start with one important caveat. In his article, Vieira recalls the Miles law (1978) according to which ‘where you stand depends on where you sit’. Thus, I should disclose where I am sitting. Vieira seeks to concentrate his analysis in the time span between 2003 and 2008 (p. 32). In 2005, I found myself at the Hong Kong Ministerial Meeting of the World Trade Organization (WTO) as a civil society representative advocating for the Brazilian Institute for Consumers Defence (IDEC). In 2007, I joined the Brazilian Foreign Service. I worked at the India, Brazil and South Africa (IBSA) Forum Division and at the Permanent Mission of Brazil to the UN Offices in Geneva. I was never an official trade negotiator myself, having dealt more with the International Labour Organization (ILO). I could hardly be one of the interviewees in Rodrigues Vieira notable list – a position which I find to be positive in order to write this article. Trade talks, however, were never far from my desk.
I should also clarify I am not writing this review on my official capacity. The views expressed here are my personal opinion and should not be taken neither as the position of Brazil nor of the Brazilian Ministry of Foreign Affairs (MRE) on the matter. In other words, I must recognize that my observation is certainly influenced by the institution that employs me, but this does not fully explain this article nor my opinions, which are offered in an individual capacity.
One more comment is important at this point: this is a review mainly based on lived observations. This is not the conclusion of a standalone research. Vieira’s arguments are built on the top an ample study conducted throughout the years. This text engages critically with his ideas but cannot pretend to scientifically challenge every and each of his affirmations.
Where We Agree: Institutional Design Does Matter
Vieira judiciously articulates the contemporary literature on institutional studies, being innovative while acknowledging contributions from a vast array of authors. He shows that the executive power is hardly never a unitary actor; that not all bureaucracies that function as access points for lobbying groups are equal in terms of power; and that the control of information plays a key role in power distribution.
Vieira also presents, and in my view correctly, two other important and related lessons: on the one hand, that institutional designs are usually inherited from past decisions; on the other, that institutional changes may open room for unintended consequences. I correspondingly hold to his remark that what is usually called ‘national interest’ can be in practice dissected, since ‘national interest’ is in itself a product of multiple interactions, shaped by pre-existing factors.
From this departure point, Vieira’s article calls attention to the influence of institutional design, a factor he believes has not been looked at with the desirable care in international political analysis. I respect his choice for trade negotiations as the initial case study for his examination. I note he construe domestic institutions as a standalone, independent variable (a definition he avoids, however, for reasons beyond my knowledge of contemporary epistemology).
Moving to the outcomes of Vieira’s study, I agree with the author, moreover, that the inclusion of the Brazilian Ministry of Agrarian Development (known as MDA) in the Council of Ministers of the Chamber of Foreign Trade is a reflection of the country’s political left’s close relationship with, in his words, “peasant organisations and landless movements” (p.42). Neither have I any criticism, ab initio, with Vieira’s proposition of two ideal-type categories for his study: the diplomatic bureaucracy that sees market-related concerns as part of international politics (which he calls ‘blended diplomacy’); and the economic-focused negotiating model, which he exemplifies with a reference to the United States Trade Representative (USTR) and, to some extent, to India.
Furthermore, I do not pretend to deny that, in Brazil, following a pre-existing practice already in place when the WTO Doha Round began, the Ministry of Foreign Affairs (MRE) has been the final voice delivering Brazilian positions in most of the official international microphones. This has thus allowed MRE to revendicate, at least officially, a sort of ‘coordinating role’ between the technical areas growingly affected by and involved with international agreements. As Vieira explains, this alleged prominence of MRE was at least partially affected by the particular dynamics taken by Brazilian domestic politics during the ruling of President Dilma Rousseff (2011-2016), which sits after his main period of analysis.
Once my standing point has been disclosed, and having taken care of my considerable level of agreement with the author, let me now turn to my dissent with Vieira’s article in the next session.
Did MRE Defend Liberalizing Agriculture for Prestige?
According to Vieira’s main line of argument, had Brazilian negotiators not blended so much of their political consideration into the national trade positions, the country would have ended up being more attentive to defensive interests of its domestic industry in the WTO Doha Round. Brazil would have also balanced better between WTO negotiations and regional and bilateral alternatives. This comes under the assumption that MDIC is more open than MRE for listening domestic actors interested in trade negotiations (p. 32).
Consequently, the author sees the Ministry of Foreign Affairs as having espoused an excessive agriculture-led liberalism. In page 46, Vieira suggests that this may have been a choice made for the benefit of the country’s international prestige. This particular word ‘prestige’, borrowed from an interview (p. 44), epitomizes what would seem to reveal a misguided way of conducting business within trade negotiations.
Even though Vieira carefully avoids blatant side-taking (we should respect and praise the author for trying at most to distance himself from pre-conceived preferences), this understanding leads him to conclude that a better balance between opposing domestic interests could have been stroke had MDIC been at the driver seat of negotiations (p. 46).
Vieira’s article suggests that there were concrete reasons for Brazil to be more defensive in Non-Agricultural Market Access (NAMA) at the Doha Round, and that the deal almost stroke in the WTO would have damaged the national industry, against the wish of MDIC. I tend to believe that the exchange rate and the monetary policy have been much more decisive for the direction taken by Brazilian partial des-industrialization, but this matter is beyond the scope of our direct exam here.
Vieira also proposes that, differently from the WTO, regional or bilateral solutions could have helped to better balance the defensive interests of the national industry. One should consider, however, that negotiations based on consolidated NAMA tariffs (such as WTO’s) by definition have less direct impact than negotiation that start from applied tariffs (such as the one that were on the table, for example, in the context of the Free Trade Agreement of the Americas, FTAA).
Vieira’s main argument, nevertheless, is precisely that diplomats consider too much the international scene and overlook their own domestic state-of-play. I am concious that if I delve too much on considerations about the structure of the negotiations, I may end up confirming the very point I am trying to oppose. I should also note that Vieira interviewed an impressive number of important people. If the author did not pursue on this consideration, I can believe he had reasons not to do so.
So, let me turn this critical review into another direction. I hold as hypothesis that Vieira’s study ends up attributing more weight to the business organized lobby (partially averse to the risk of opening the economy, partially interested in better accessing other markets) than this (legitimate, albeit limited) interest group concretely holds in the formation of the national preferences. When assuming that an economic-centred institutional design would have balanced better between domestic interest groups, it seems that the author slightly overlapped the concept of “domestic interest group” with the concept of “market actor” (p. 32).
The first sign what seems to be an over-sensitiveness of the study to the industry federations is the affirmative that MRE had a liberalizing impetus at the Doha Round. The second sign is a tendency to assume that 21st Century international trade negotiations to be in essence a trade-off between opportunities of market access (a reality that may have existed, but before, in the 20th Century, under the General Agreement on Trade and Tariffs, through tariff reductions in non-agricultural sectors). The third sign is the limited consideration given to inputs received from domestic interest groups that are not necessary market actors, such as trade unions, environmentalist groups, representatives of federative units (states and cities) and, not to be taken lightly, other bureaucracies within the state.
Starting with point number three, business federations could not be seen as a summary of industry positions, let alone of the actors in domestic politics with legitimate motivation to follow trade negotiations. In the interviews quoted in the article, Vieira enlists the National Industry Confederation (CNI) and the Federation of Industries of Sao Paulo (FIESP). I believe the author himself would accept that these two also do not always share the same views and, therefore, even if we limit the analysis to their inputs, room would be left for any state bureaucracy (be it MRE or MDIC) to ponder their demands in light of other inputs and considerations.
Running the risk, myself, of oversimplification, I would also like to recall that a relevant number of business associations outside Sao Paulo, while being members of CNI (but not of FIESP), are known to be very much linked to food manufacture. As Vieira himself suggests, there is a grey zone in which it becomes hard to differentiate agribusiness from industry, and this can be where this grey zone is to be of concern. In terms of access point for the food transformation lobby in the government, Vieira sees both the Ministry of Agriculture (MAPA) and MDIC relating to representatives of this sector. Therefore, inasmuch as not all state bureaucracies are the same, not all interest groups are designed in the same manner; not all have the same core views; neither can a perfect line be drawn between Brazilian industry and Brazilian agriculture.
I believe the article shows that the author would agree with my comments until here, even if considering that a certain level of ideal-type approach becomes indispensable for apprehending the matter under study. Vieira does not ignore that agroindustry sectors in Brazil have been trying to lobby not only on behalf of “defensive”, but also of some “liberalizing” positions, although with limited impact, since the Uruguay Round (for this, it is also worth looking at Veiga and Iglesias, 2002, p. 56; Zancan Bonomo, 2006, p. 74). A black-and-white separation between “agro” and “industry”, Vieira recognizes, involves a certain level of simplification, for the sake of the study.
In any case, the interviewees cited show that Vieira’s study have been particularly attentive to “non-agro” industry inputs, where he finds legitimate defensive considerations. Secondarily, the author also devotes space to considerations emanating from the big agribusiness sector and from small farmers.
I believe that additional account at least for the position of industrial labour unions could be worth considering. In the chosen time span (2003 to 2008), a closer look at the positions held by the Brazilian Network for People’s Integration (REBRIP), in which a variety of civil society organizations, including unions, participate, could be of particular help to inject some fresh hypothesis into the discussion. Given the high capacity of articulation showed by Vieira in his article, I am convinced that the author would have no issues with the additional complexity this would entail.
REBRIP proposals can be framed as yet much less liberal than the ones of FIESP or CNI. REBRIP has been a relevant and legitimate coalition that also dedicated part of its work to advocacy (or lobbying, as Vieira perhaps would prefer to define this), and part of its domestic concerns seem to have been heard by Brazilian negotiators on specific occasions. REBRIP and others in the civil society also showed a high capacity of finding common ground with institutions in other countries, thereby working with the so-called “variable geometry” in favour of the consideration of their inputs in the negotiation table.
Having suggested some of the non-state actors with positions at stake, I still have to show why other bureaucracies within the state also had interests in the Doha Round. Before examining to that, however, let me turn to the second sign I identified above of over-sensitiveness of Vieira’s study to market actors: the difference between 20th century and 21st century trade negotiations.
We should see that Vieira himself dedicates an attentive look for inheritance from past decisions. WTO, as we can agree, was not created in the vacuum. “Unfinished businesses” were recognized at the end of the Uruguay Round. A simple look at tariffs can show that trade distortions were (and still are) much more prevalent in agriculture than in Non-Agricultural Market Access (NAMA).
Throughout the second half of the 20th century, at every succeeding GATT round, with less to be traded-off in terms of tariffs in NAMA, and while still being cautious about their domestic agricultural practices and sensitiveness, developed countries growingly turned their negotiation appetite to topics once seen as mere accessories to GATT: services, intellectual propriety, public procurement, investments and (the least controversial of them) trade facilitation.
In the Uruguay Round, the last round before the creation of the WTO (the WTO being, in itself, a negotiated result of the Uruguay Round), all these topics were recognized as being on the table, one way or another. The TRIPS and the TRIMS agreements came to be part of the WTO scope, partially in exchange for the creation of a mechanism for settling controversies.
We jump to 2001 and a quick look at the Doha Ministerial Declaration that inaugurated the so-called “Development Round” can show that two things – the understanding that agriculture had fell behind other tariff reductions and that any new trade-offs might need to involve some of the “new” non-tariff and regulatory sectors – were clearly transported into and accepted as the basis for the negotiation (WTO, 2001).
A higher concentration of liberalizing attention in agriculture, in this case, can be seen not necessarily as the result of the manner by which MRE shaped the definition of the national interest, but as an expected result of the mandate created for the Doha Round itself, lately reflected in the country’s negotiating position, having regards to costs and opportunities. The mandate favoured an approach by which meaningful results in agriculture were expected.
But Vieira could certainly call a foul here, arguing that, once again, I am turning myself too much into systemic considerations, against a look at the Brazilian domestic actors. In order to avoid that, let us look at the examples, in the literature, about domestic impacts generated by economic agreements (I am calling them economic and not trade agreements, since trade and tariffs became just a part of them). In Ha-Joon Chang, we can find one among other examples of why investor-against-state clauses in investment chapters, international public procurement measures, intellectual propriety additional restrictions and service liberalization agendas could limit the space for national states to regulate economic activity. At the end of the day, to quote Chang, these new topics had even more potential to “kick away” the ladder of development than industry liberalization.
All of these “non-trade” issues – or, as we could perhaps call them, regulatory trade-offs – were (and still are) equally present in the negotiation of regional and bilateral preferential trade agreements and free trade areas. In most of them, if not all of those that involve developed countries, proposals for commitments in these areas were (and still are) much more stringent than what was at the table in WTO when the Doha Round mandate was still alive and kicking. I am not saying they are necessarily to be avoided; the point is that they are high in the consideration of any trade-off mix.
“The game” in the Doha Round was never just about balancing between liberalizing and protectionists segments in tariff trade reductions. The examination of options taken by participants cannot ignore how both NAMA and Agriculture topics were interacting, both in Doha and at the regional/bilateral level, with the so-called Singapore issues cited above.
In Brazil, for example, service liberalization positive lists under the Free Trade Agreement of the Americas (FTAA) would have an impact in the interests of the Health Ministry and of the movements in favour of the implementation of the health policy embedded in the Brazilian constitution. One can argue if a positive or negative impact, but it is hard to deny it would tilt the balances stroke in the regulation of private health plans. The same can be said of additional commitments in services and the current regulation applied to the provision of water through consortiums at the metropolitan level. Or yet of agreements with ‘TRIPS+’ commitments and their impact to universities, local clusters of economy based on culture, as well as to the pharmaceutical industry. Changes to public procurement and investor-state clauses, in turn, would oppose interests of the Judiciary, of the Ministry of Budget and Planning (MPOG) and of federations representing city mayors.
Truth be told, the entry points of these other interest groups in trade talks was much more subtle are hard to capture – but not necessarily less important. In view of this, contrary to what the author affirms, when we go back to 2003 and try to wear the negotiator shoes, we can see that a preference for Doha as opposed to a preference for bilateral and regional PTAs can hardly be taken a preference for the most liberalized impetus. Just the contrary: a look at PTAs and FTAs will show that most, if not all of them, would go much beyond the WTO, in terms of liberalization agenda, in sensitive areas within Brazil.
Let us take a look, for example, at the bargain stroke by the participants of the Trans Pacific Partnership (TPP), of which Brazil was not a part. On the one hand, it incorporated the “TRIPS plus” and investment commitments that were not possible in WTO. On the other hand, it excluded pork, beef and sugar, to quote only three products, of almost any liberalizing commitment.
All this considered, there are at least another important element to be taken into account: as a member of MERCOSUR, the opportunities for PTAs and FTAs for Brazil between 2003 and 2008 cannot be looked at without some reference to the spaces and constrains created by its regional partners. Furthermore, no regional or bilateral trade-off would include commitments in the so-called systemic trade distorting issues: export subsidies and excessive domestic support.
Export subsidies, domestic support and other vexing trade-distorting practices, by definition, no actor would be willing to compromise in negotiations with only a part of its potential markets (Amorim, 2011, p. 126-131; 154-155; 164-167; 362-363; 510-511). Comparison between opportunities presented by multilateral versus regional trade negotiations during the last decade should consider that these systemic issues could only be tackled when all or most actors (EU, US, developing countries, “emerging economies” for those that like this definition) were on the table at the same time. The nature of the trade-off is therefore different in multilateral negotiations. A choice between Doha and regional/bilateral alternatives could not be seen as equivalently uniform.
Compared to regional and bilateral trade negotiations that were possible between 2003 and 2008, which is the period examined by Vieira, the WTO brought a clear advantage for Brazil: it presented itself as the only place where these systemic issues, and export subsidies in particular, could be discussed. No country will negotiate systemic issues in a bilateral agreement with a partner. And if we look at what are the conditions of the economic situation of Brazil vis-a-vis the world, we can see Brazil is one of the countries that tends to gain the most from the resolution of systemic issues.
This could explain, albeit only partially, the choice for multilateralism as opposed to non-systemic negotiations. To quote someone keen and close to some of the positions exposed by Vieira, Bonomo (2006) sees the liberalization of agriculture as only the third reason for the Brazilian government bet on the WTO and on the Doha round. According to Bonomo, the very construction of a multilateral system was the first priority for Brazil.
Without forgetting, once again, that Vieira suggests that a politically-motivated institution tends to tilt the balance in the direction of international considerations, and that I am part an institution with such deficiency, it is important to note that the country chosen for his case-study – Brazil – is often considered a “middle-power” in global trade, with economic relations distributed across diverse regions and continents. A multilateral, consensus-based decision-taking arena was, according to Bonomo, a priority in itself for Brazil. It would allow for bargaining space acting under what has been described as a variable geometry.
Coming back to the domestic considerations, I shall note that Vieira sees the existence of a left-leaning lobby within the state and the then-ruling Workers’ Party (PT). The MRE choice of betting in the WTO, in what it looked like to Vieira as a liberalizing agriculture impetus, is seemed in his article as a possible contradiction to PT. From here the author develops an explanation for this apparent contradiction, precisely recurring to the particular institutional design of our negotiating diplomacy.
However, as it stems from the other considerations proposed above (systemic versus non-systemic opportunities; the departure point in NAMA; the non-tariff nature of other topics under discussion, which affect other domestic actors; influence of non-market interest groups), the choice for prioritizing the WTO in lieu of regional and bilateral arrangements, in the period examined by Vieira, can be seen from a different angle: the WTO was perhaps the arena where the naturally occurring “liberalizing pressures” of part the Brazilian society could be discharged, with less harm to the more defensive standing of many.
The effort to create the G20 for WTO negotiations, seen from this perspective, cannot be considered a mere investment in prestige. It can be seen as a legitimate investment in bargaining power. In theory, as in any coalition-building, the need to construct a common view may create limits to autonomous voicing of individual concerns. But, in this case, it is possible to argue, as interviews conducted by Vieira suggest, that the G20 coalition contradictions and diversities were also found and reproduced within Brazil. The limitations of G20 partially coincided with the domestic constrains for the country’s positions.
If it seems correct to say that Brazil started to look again with more attention to bilateral alternatives to the systemic WTO negotiations since the early 2010’s, the causal relationship between this fact and the growingly MDIC prominence under President Dilma Rousseff does not seem to be as direct as Vieira proposes. Even without the change in the relative positions of MRE and MDIC under Rousseff, which have been noted by the author, more attention to bilateral and bi-regional FTAs could have been inevitable. The reason being that the “systemic promise”, in which Brazil concentrated its bet up to 2008, started to prove itself insufficient and disappointing. But this is known now – after –not before the events took place.
My final comment, henceforth, has to do with the importance of a look into the development literature and the impact that the so-called Singapore issues could have had on Brazil. I am convinced this could help explain some of the choices made by Brazilian negotiators in the name of the national interest in the period of interest for Vieira. To defend myself from Vieira argument against excessive systemic considerations, I should signal that not all development studies are internationally-focused. Domestic considerations for policy choices are also available.
Suggestions for the Future Research Agenda
Having shown the reasons where I find the case-study oversimplified, I come back to be in agreement with Vieira that other cases looking at how institutional designs influence diplomatic decision-making would be most welcomed.
In any negotiation, it is not easy to combine technical knowledge and power considerations. In any given issue-area, a lot of inter-ministerial coordination is required for that to happen. It is not within the scope of this article to single out which model works best, and in which case it does. For the time being, I consider lacking data and knowledge to risk definitive answers in this regard.
Having said that, and without arriving at final conclusions, it can be suggested that the following often happens in such situations: firstly, technical bureaucracies that are equally present in different countries agree among themselves. Secondly, they see value in getting more attention at the national level to their internationally-reached consensus. Thirdly, for that, they seek to better bind their consensus through internationally assumed commitments or agreements. This leads to elevating the invited political heads of delegations to the international meetings in the particular issue-area (‘summitization’).
For the disappointment of the technical bureaucracies that were originally in agreement, however, summitization often leads to the blending of political considerations, and of considerations of other bureaucracies, into their issue-area.
Before summitization happens, when discussions are kept at the technical level, the correlation of forces prevailing on the particular issue-area are usually taken as a given. This often happens because, for technical people, technical information is a definitive asset. At the political level, however, there is a tendency for actors to show more agency to put to test the correlations of force, employing negotiating tactics that challenge the fact that uneven access to information is a constant constraint to decision-making.
In this sense, I suggest three possibilities as particularly worth for future study: the interaction between technical and political bureaucracies in negotiations under the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal; the complex interaction between the knowledge of accountants and of political diplomats in the UN Budgetary Process; and the negotiations of the concept of “green jobs” at the International Labour Organization, involving a unexpected melting of environmentalist, unionists and businessmen preoccupations.
Vieira himself presents, at the conclusion of his article, some other possibilities. I find at least one of them tricky and uncertain for the future study of the influence of institutional design: the relationship between Brazil, OECD and development aid.
Firstly, because the Brazilian official position in this matter seems to be evolving fast. Secondly, because according to Vieira, the “problem” of Brazil with the OECD used to be that the Organization demanded more transparency than what Brazil was willing to practice. The matter here, however, as I would like to suggest, was not one of transparency, but of forms of measurement.
Furthermore, keeping ourselves at the technical bay, traditionally the main reason given for Brazil not to accede to the OECD was understood to be the commitments on investments, not on aid. From the systemic point of view, the question has had to do with the effects of the OECD accession in the participation of Brazil at the global-south decision-making coalitions, such as the G-77. But, as said before, the context changed once the current government is favourable to accession, and this discussion should be conducted with more care than this conclusion would allow.
In order to comment yet another issue tackled by Vieira in his article, it is also worth noting that the US does not seem to be the best possible comparison on executive-legislative interaction on international negotiations. Washington seems to be more an exception than a rule in this field. I would suggest a rather broader look at the formation of interests in other countries, opening up the scope of the issue rather than limiting it to a dual approach Brazil-US. I find comfort in knowing that Vieira himself could bring to the discussions his experiences with Indian foreign trade policy.
In the case of trade, specifically, further comparative studies looking at a broad range of countries’ participation in the WTO from the division between the two ideal-types of diplomacy proposed (the ‘blended’/general and the economic-centred) would also be most welcomed. One should recognize that this discussion has already become a common cocktail soft-talk in Geneva circles (“are you from the Chancery or from the Trade Department?”). But studies as Vieira’s, going way beyond the stereotype, could certainly help better understanding how this really affects decision-making.
The views expressed in this article are offered by the author in an individual capacity. This article was written during non-working hours (nights and weekends). I counted on no particular funding for preparing this review. I was moved by the interest of engaging back in this discussion, aware of its positive potential for developments still unfolding in Brazil and in a number of countries facing similar trade-negotiating dilemmas. I thank Ivan Paganotti Geraldo Zahran and, above all, Fernanda Scalia Pereira for reading and commenting preliminary versions of the text.
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