Rising Powers in Complex Regimes: South African Norm Shopping in the Governance of Cross-Border Investment

ABSTRACT

This article offers a critical engagement with the literature on contemporary global power shifts and the phenomenon of ‘regime complexity’. It does so by focusing on South Africa's role in the governance of cross-border investment, and using this case to explore the strategies used by rising powers to pursue their strategic aims in institutionally complex and fragmented global governance regimes. This article situates an understanding of regime complexity within a critical constructivist literature that highlights the ambiguity of international norms and the relationship between power and strategic rhetorical action. It argues that complex regimes create space for agency and strategic action by states and highlights one specific strategy – norm shopping – that rising powers can use to legitimate their actions and challenge dominant norms in complex regimes.

KEYWORDS:

• Cross-border investment
• regime complexity
• rising powers
• South Africa
• constructivism

Acknowledgements

This research was funded by the Leverhulme Trust under a Leverhulme Early Career Fellowship, ‘Talking Power: South Africa and the Pursuit of Legitimacy in the Emerging Global Order’. Additional research cited in this article was also carried out under an Economic and Social Research Council doctoral studentship. I would like to thank three anonymous reviewers and Matthew Bishop, Jean Grugel, Tony Heron, Gabriel Siles-Brügge, Liam Clegg and Jappe Eckhardt for their helpful comments. Any remaining mistakes or omissions are my own.

Disclosure Statement

No potential conflict of interest was reported by the author.

Notes on Contributor

Peg Murray-Evans is a Research Associate and Leverhulme Early Career Fellow in the Department of Politics at the University of York, UK. Her work focuses on the role of power, ideas and institutions in the politics of international trade and development. Peg has carried out research as a visiting scholar at University of Cape Town, University of Witwatersrand and University of Botswana. Her recent book is titled Power in North–South Trade Negotiations: Making the European Union's Economic Partnership Agreements (Routledge, 2019). She has published in various journals, including European Journal of International Relations, Third World Quarterly and The Round Table.

Notes

1 The analysis draws on publicly available documents from the South African government, WTO, UNCTAD, the EU and others, as well as a series of interviews and background briefings conducted by the author in South Africa and Botswana in 2011–12 and in South Africa in 2017. The first set of interviews focused on negotiations for an Economic Partnership Agreement between Southern Africa and the EU and the second set on South Africa's decision to terminate BITs. The relevant interviews numbered 30 in total. The interviews were conducted with ethics approval from the University of Sheffield (first set of interviews) and University of York (second set of interviews). Interviewees were informed that the responses they gave would be used in published material and were offered anonymity in order to enable them to speak freely – most of the interviews are therefore cited anonymously.

2 On the contemporary rise of multipolarity and deadlock in the Doha Round, see Capling and Higgott (2009), Mattoo and Subramanian (2009), Aggarwal and Evenett (2013), Laïdi (2014), Gamble et al. (2015), Muzaka and Bishop (2015).

3 Like Krebs and Jackson (2007), I acknowledge that it is very difficult to determine empirically the ‘true’ motivations for actors’ behaviour and doing so is not necessary for the purposes of this article, which is more interested in strategy that intent. My assumption is that agents act strategically and on the basis of interests, but that these interests and strategies are infused with social norms (see Seabrooke 2006, Murray-Evans 2019).

4 For extended analyses of the international organisations and agreements that deal with cross-border investment, see UNCTAD (2004), Vandevelde (2005), Elkins et al. (2006), Reiter (2006), Woolcock (2011, 2015), Bonnitcha et al. (2017).

5 A number of insightful explorations of South Africa's foreign policy in this period are available (Hamill and Lee 2001, Bischoff 2003, Taylor and Williams 2006, Alden and Le Pere 2009, Serrão and Bischoff 2009).

6 Confidential interview with a South African government official, October 2017.

7 The investment provisions listed are those that were included in the Cariforum EPA – the only comprehensive EPA thus far concluded between the EU and an ACP region (see Heron 2011, Bishop et al. 2013). While the EPA did not include post-establishment protections, Gus Van Harten (2008, p. 2) argues that the MFN clause could be read expansively to incorporate post-establishment protections from other investment treaties.

8 The SADC Strategic Framework suggested that Least Developed Countries (LDCs) should not have to offer reciprocal tariff liberalisation because these countries could instead access the EU market via the EU's unilateral Everything but Arms (EBA) scheme (SADC 2006, p. 44–5).

9 Confidential interview with a South African government official, May 2017.

10 The countries involved were Austria, Belgium and Luxemburg, Denmark, Finland, France, Germany, Greece, Italy, the Netherlands, Spain and Switzerland.

11 Confidential interview with a South African government official, October 2017.

12 Confidential interview with a South African government official, October 2017.

13 For example, in a speech about ICSID in 2012, President Hugo Chavez justified Venezuela's turn against the investment treaty regime by saying, ‘[W]e are not going to bow down to imperialism and its tentacles!’ (quoted in Bonnitcha et al. 2017, p. 227).

14 Confidential interview with a South African government official, October 2017.

15 Confidential interview with a South African government official, October 2017.

16 Confidential interview with a South African researcher, May 2017.

17 Private correspondence with an expert on investment governance and confidential interview with a South African researcher, May 2017.

18 Draft versions of the Act also placed limits on the protections provided to foreign investors in various ways. For example, the drafts included an expansive definition of actions by the state that should be considered in the public interest and therefore exempt from restrictions on expropriation. However, at the time of writing the regulations that had been published in order to bring the Act into force covered only the section of the Act that dealt with dispute settlement (see Langalanga 2015, 2017).

19 Confidential interview with a South African government official, May 2017.

20 Interview with Falk Bömeke, May 2017; confidential interview with a European official, May 2017.

21 Confidential interview with a South African government official, October 2017.

22 Interview with Talitha Bertelsmann-Scott, August 2018.

23 Interview with Falk Bömeke, May 2017; confidential interview with a European official, May 2017.

24 Interview with Falk Bömeke, May 2017.

25 For a discussion of NGO opposition to ISDS in TTIP, see De Ville and Siles-Brügge 2015, p. 102-5.

26 Confidential interview with a South African government official, October 2017.

27 Confidential interview with a South African government official, October 2017.

28 Confidential interview with a South African government official, October 2017.

29 Confidential interviews with South African government officials, May and October 2017.

Additional information

Funding

This work was supported by a Leverhulme Trust Early Career Fellowship [Grant Number ECF-2016-384].