Third-Market Competition and the Politics of Strategic Delay in WTO Enlargement

Abstract

A common explanation for sources of conflict and delay in the WTO accession procedure is the candidate's reluctance to trade-policy reforms coupled with member governments' sensitivity to protectionist demands of domestic import-competing sectors. This paper argues that multilateral trade liberalization accompanied by the accession of new members to the WTO additionally fosters 'third-market competition', which contests the profits of old members' exporters. Governments of economies affected by third-market competition hence strategically delay WTO accession negotiations to prolong tariff and quota rents not only for domestic import-competing industries but also for exporters on target markets abroad. The explorative case study of The People's Republic of China's accession to the WTO reveals that the developing and newly industrialized economies affected most by Chinese export competition have indeed been problematic negotiators in the 15 years lasting bargaining process.