Trade Governance ofthe WTO and Developmental Dilemmas of Developing Countriesin the case of Indonesia’s Nickel Ban.

Abstract

This paper explores the dynamic interaction between developing and developed countries and the WTO as an international trade regime. More specifically, It discusses the structural rigidity and strategic choices faced by developing countries within the body of the WTO. It will show the role of the WTO as an economic liberal organization interacting with Indonesia as a developing country pursuing resource nationalism by looking at the case of Indonesia’s nickel
export ban policy. Using World-System Theory and Regime Theory, the paper argues that while the WTO institutionalizes a global trade regime that favors developed (core) countries and limits policy space for industrialization and resource nationalism in the Global South, developing countries like Indonesia continue to participate. This is motivated by perceived benefits such as reduction of transaction cost, predictability, and access to a multilateral dispute forum. In case of Indonesia nickel export ban, apart from the Regime Theory explanations, Indonesia’s continuous participation is driven by its ability to bear the cost of rule violations. Indonesia strategically accepts short-term legal and economic costs because the long-term developmental gains of the ban outweigh the threat of retaliation legally protected by the WTO. This suggests that even within an asymmetrical system, developing countries can exercise agency, navigate structural disadvantages, and manage the WTO's power while pursuing national development goals