Indonesia s two-level game at the WTO : a political economy approach to the international poultry trade

Name: Iberahim, Muhammad Maulana

keyword: Two-level game

; Business interest

; Self-sufficiency

; Economic nationalism

; World Trade Organization

Abstract: This thesis scrutinizes the trade dispute between Indonesia and Brazil over the importation of chicken-which was adjudicated by the WTO, favoring Brazil at the expense of Indonesia-through a political economy lens. The economic philosophy of self-sufficiency, which prioritizes domestic production at the expense of foreign interest, has colored the dynamics of protectionism and Indonesia’s political economy as manifested in various legal instruments, thereby accentuating regulatory protectionism. This thesis thus addresses a research question, which inquires the role and the extent of domestic actors in exerting influence on the Indonesian government’s decision-making process. While international trade dispute literature has an overemphasis on state-centric analysis, this thesis adopts the two-level game theory to analyze the nexus between international and domestic pressures. It problematizes the negotiation process as a win-set in which the government’s hand is tied with two-directional forces. Combining economic nationalism into the theoretical framework, this thesis argues that the domestic actors’ role at the grass-root level has integral structural ascendancy in dictating the state’s behavior in the global trade regime. Moreover, the framework of nationalism goes beyond neoliberal globalism and the Marxist tradition of class struggle. The significance of this thesis shows how the business interest associations (BIAs) and the trade unions (TUs) have had centrifugal and centripetal forces. The BIAs who represent vertically integrated poultry firms (integrators) have more political options, whereby their structural and instrumental powers have the more latent capacity to influence the decision-making process (e.g., intensive lobbying). On the other hand, the TUs have limited political options because their structural and instrumental powers have fewer resources, making the TUs appealed to nationalist populism. The latter’s strategy is more confrontational (e.g., demonstration instead of lobbying) than the former, who are the direct beneficiaries of legal-rational patrimonialism. Therefore, the asymmetric relations among the two also fuel the conflict of interests and domestic cleavage. At the international level, the WTO has the legal capacity to enforce its ruling. The fact that the implementation of the agreement on agriculture among the global South is contentious, Brazil as a global swing state and the largest agribusiness power, has utilized the corporate food regime to gain market access. Indonesia, however, is careful in formulating its negotiation strategy as non-compliance act would result in bad precedent due to available retaliation process that can be undertaken by Brazil. Therefore, this demonstrates Indonesia’s responses toward late capitalism and its ambivalence toward liberalization and protectionism. However, Indonesia will continue to defend its interest in the global trade regime and will likely perpetuate embedded liberalism under the cloak of nationalist motives

Thammasat University. Thammasat University Library

Address: BANGKOK

Email: preserv@tu.ac.th

Name: Chulanee Tantikulanan

Role: advisor

Created: 2020

Modified: 2023-02-09

Issued: 2023-02-09

วิทยานิพนธ์/Thesis

application/pdf

DOI: 10.14457/TU.the.2020.996

eng

DegreeName: Master of Arts

Level: Master's Degree

Descipline: Asia-Pacific Studies

Grantor: Thammasat University

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