The Rise of Middle-Income Countries in the International Trading System

Abstract

This paper addresses the implications of the rise of China and other middle-income countries (MICs) for the international trading system. The paper assesses how MICs have engaged with the international trading system over time, what strategies they advance, and what are the implications for going forward, focusing on the negotiation and enforcement of the rules of the World Trade Organization (WTO). Part I assesses the extent to which analysis of trade and trade policy can and should meaningfully treat MICs as a distinct category. It sets forth and analyzes a theory of MIC trading interests that calls for greater policy space for economic development. Part II provides a descriptive background of changes in the economic power and trading patterns of MICs that have implications for future trade negotiations and dispute settlement. Parts III, IV, and V respectively examine the experiences of MICs in multilateral trade negotiations, regional and bilateral trade agreements, and multilateral dispute settlement. Part VI concludes regarding MIC trading strategies and their global implications.

Keywords: middle income countries, international trading system, global economy