News & Commentary:

March 2003 Archives


The U.N. Can Serve the Greater Good, or Undermine It
Clive Crook (AtlantiC Monthly) Mar 2003
The U.N.'s response to the Iraq crisis has shown that it is not remotely up to the job of defeating terrorism and the states that support it

IMF Global Financial Stability Report
IMF Mar 2003
The Global Financial Stability Report provides semiannual assessments of global financial markets and addresses emerging market financing in a global context.

Why Mexico's Small Corn Farmers Go Hungry
Tina Rosenberg (NYT) Mar 3, 2003
Small farmers in Mexico and the rural poor worldwide cannot compete with Western products that are heavily subsidized.

Latin America at turning point Adobe Acrobat Required
IMF Survey Mar 3, 2003
G-7 meeting in Paris; Krugman on potential for economic breakdown; age and economic transition; Gelos & Wei on why transparency matters; CIS-7 reform priorities; and global economic linkages.

Come on, America, Play By the Rules! Wall Street Journal Subscription Required
Pascal Lamy (WSJ) Mar 3, 2003
The problems are starting to mount up on the U.S. for WTO violations.

Warren Buffett lashes out against derivatives
FT Mar 3, 2003
Warren Buffett, the influential investor, warned derivatives were “financial weapons of mass destruction” and that they were “potentially lethal” to the economic system.

Dollar falls after comments by US treasury chief
FT Mar 4, 2003
The dollar fell sharply after John Snow, US Treasury secretary, said he was "not particularly concerned" about its recent decline.

EU and Mercosur Accelerate Negotiations Toward Free Trade
EU DGT Mar 4, 2003
In the current negotiations for a Association Agreement between the EU and Mercosur, both parties exchanged today their offers for market opening, as foreseen in the work programme agreed at the EU-Mercosur ministerial meeting in Río de Janeiro on 23 July 2002. This move paves the way for the next negotiating round, which will take place in Brussels between 17-21 March 2003.

Agriculture: WTO Members Prepare For Extended Modalities Phase
BRIDGES Weekly Trade News Digest Vol. 7, Number 8 Mar 5, 2003
WTO Members met for a 24-28 special (negotiating) session of the Committee on Agriculture (CoA) to discuss the highly controversial first agricultural modalities draft circulated by Chair Stuart Harbinson on 12 February. Although Chair Harbinson had hoped to receive Members' clear instructions for the preparation of a forthcoming second draft, the talks during the five-day session provided him with "little if any guidance," as he stated at a 28 February formal wrap-up meeting. Against this backdrop -- and with trade negotiators starting to openly express their serious doubts that the end-March deadline for adopting modalities could be met -- Members are reportedly preparing for extended negotiations up until the September Cancun Ministerial. In this context, negotiators are also turning their attention to the next 'mini-Ministerial,' to be hosted by the Egyptian government in end-June.

TNC: Negotiations Reaching Gridlock
BRIDGES Weekly Trade News Digest Vol. 7, Number 8 Mar 5, 2003
The WTO Trade Negotiations Committee, meeting on 4 and 5 March to take stock of negotiations, saw no progress in the on-going talks. At its last meeting in early February, TNC Chair/WTO Director-General Supachai Panitchpakdi had already warned Members that progress had been uneven, and at the latest TNC he said negotiations were facing imminent gridlock. This sentiment was echoed in the statements of Members taking the floor. The meeting was held in both formal and informal mode, in order to allow for more frank discussion, but the statements made reiterated old positions, regardless of the mode of the meeting.

Why Gold?
Hans Sennholz (Mises Daily) Mar 6, 2003
It is difficult to argue with gold. To men everywhere, gold is a desirable economic object. It can be used for the manufacture of jewelry and ornaments. It is a corrosion-resistant element, the most malleable and ductile metal, ideal for plated coating on a wide variety of electrical and mechanical products. It is a good thermal and electrical conductor. It is durable and storable, can be easily hidden from partakers and predators, and readily shipped to other places. Gold is very marketable. In fact, gold may be the most marketable commodity around the globe.

China's market revolution
IHT Mar 7, 2003
As a growing number of urban dwellers with refrigerators and microwaves flock to giant supermarkets, many see the beginnings of what could be a food revolution in China.

The world’s fresh water
Economist Mar 7, 2003
A United Nations report says the world’s fresh water is being used up fast. But much can be done to ensure that nobody goes thirsty in future.

The Role of the IMF in a Globalizing World Economy
Horst Köhler (IMF) Mar 9, 2003
Remarks by the Managing Director of the IMF.

IDC Research: Worldwide Net traffic to rise
Nua Mar 10, 2003
IDC predicts that the volume of Internet traffic generated by end users worldwide will nearly double annually over the next five years.

Global markets
Economist Mar 10, 2003
With war in Iraq looking increasingly likely, the dollar continues to fall and oil prices rise. Market nerves will not be easily soothed.

Europe is too powerful to be ignored Financial Times Subscription Required
FT Mar 11, 2003
American unilateralists have a myopic view of power that focuses too heavily on the military dimension, writes Joseph Nye, dean of Harvard's Kennedy School of Government.

China can learn from Japan's mistakes Financial Times Subscription Required
FT Mar 11, 2003
Beijing would be unwise to allow the renminbi to strengthen against the dollar, writes Ronald McKinnon, professor of economics at Stanford University.

Derivative Thinking Wall Street Journal Subscription Required
WSJ Mar 11, 2003
Why Warren Buffet really hates derivatives.

Sustaining Global Growth and the Way Forward for Latin America
Horst Köhler (IMF) Mar 12, 2003
The world is facing great uncertainty at present. Spain, as a member of the European Union with historically strong ties overseas, is especially aware of this uncertainty. Consumers and investors remain cautious and the recovery in the world economy is weaker than earlier anticipated. But barring a protracted war in the Middle East, which is unlikely, I expect the tentative recovery to continue: the economic policies of the larger advanced economies remain broadly supportive, and there is some further scope for monetary easing should that prove necessary. For 2003, I expect global economic growth to slightly exceed last year's level of 3 percent.

Keeping trade and war separate
Patricia O'Connell (CheckBiotech) Mar 12, 2003
European Trade Commissioner Pascal Lamy says political tensions over Iraq may hurt U.S.-EU commerce, but his job is to "limit the damage".

Hard Choices to be Made
(IMF) Mar 13, 2003
Commentary by the Deputy Division Chief, Western Hemisphere Department, IMF.

Services Council Approves Modalities For Autonomous Liberalisation
BRIDGES Weekly Trade News Digest - Vol. 7, Number 9 Mar 13, 2002
After more than two years of discussions, the special session of the Council for Trade in Services (CTS) approved modalities for the treatment of autonomous liberalisation on 6 March. The new agreement on modalities for autonomous liberalisation entails a sign of momentum at a time when WTO negotiations in most areas are stalling. One observer noted that the services negotiations function as the engine of the Doha Round, and WTO Secretary-General Supachai Panitchpakdi stated that "this agreement should inject new dynamism not only in the services negotiations but also in other areas of the Doha agenda". As reported last week, countries had reached near-agreement already on the subject, but needed to iron out some concerns expressed by Bulgaria, Jordan, the Kyrgyz Republic and Oman regarding newly acceded Members.

The world economy
Economist Mar 13, 2003
Heightened fears of a war in Iraq hit stockmarkets around the world. Japan's Nikkei 225 fell to a 20-year low; Britain's FTSE 100 hit its lowest point since mid-1995. The Dow Jones Industrial Average was relatively buoyant, at only a five-month low.

Small states are sometimes best Financial Times Subscription Required
Samuel Brittan (FT) Mar 14, 2003
The west has neither the right nor the knowledge to tell other people how to govern their affairs, or what their boundaries should be.

Globalization, the Transition Economies, and the IMF
Thomas C. Dawson (IMF) Mar 14, 2003
With the spread of democracy among the IMF's member countries, interactions with parliamentarians—of which this seminar is one of the oldest and best examples—are becoming an increasingly important part of our outreach.

End the Squabble Wall Street Journal Subscription Required
Haiko Alfeld & Paul Hofheinz (WSJE) Mar 14, 2003
Getting cheap drugs for poor countries is going to take new global trading rules.

Liberal Trade Regime Credited for Canada's Strong Performance Despite Global SLowdown
WTO Mar 14, 2003
WTO members, at the conclusion of their review of Canada's trade policies on 14 March 2003, said that a liberal trade regime and sound economic policies have allowed Canada to improve its living standards continuously, even in the face of a global economic slowdown. However, significant policy-induced distortions still affect a few domestic activities, not only imposing costs on Canadians at large but also undermining Canada's otherwise firm efforts to eliminate inefficiencies in global markets.

Decline of poverty, income inequality
IMF Survey Mar 17, 2003
Odling-Smee on Russia's recovery; Köhler on Latin America's prospects; Central American tax regimes; IMF-World Council of Churches meet; decline of poverty, income inequality; Ravallion on poverty measures; Austria's aging population; Aninat to leave IMF.

Asia--Economic Outlook and Policy Challenges
David Burton (IMF) Mar 17, 2003
Remarks by the Director, Asia and Pacific Department, IMF.

Will There Be New World Order After Iraq? Wall Street Journal Subscription Required
George Melloan (WSJ) Mar 18, 2003
Will the war break the U.N., NATO and the EU?

Agriculture: Only Minor Modifications In Harbinson's Revised
BRIDGES Weekly Trade News Digest - Vol. 7, Number 10 Mar 20, 2003
On 18 March, Stuart Harbinson, Chair of the special (negotiating) session of the WTO Committee on Agriculture (CoA), issued a revision of his first draft modalities for the ongoing agriculture negotiations. The modalities, scheduled to be agreed by 31 March, are to set out the scope of the negotiations, the methodology to be followed during the actual process, and the end-results expected in the agriculture negotiations. Harbinson, who had been tasked with preparing an "improved second modalities" draft following the first draft from 17 February, found himself unable to do so due to "insufficient collective guidance" received from Members. He was only able to present "an initial, limited revision of certain elements of the first draft of modalities," he stated in the 18 March document. While the main features of the original draft remained largely unchanged, some pro-developing country modifications have been made, for example with respect to market access, a new special safeguard mechanism, and trade preferences. The US, and Cairns Group leader Australia, have rejected the revised draft as not being ambitious enough. Japan, a 'Friend of Multifunctionality,' criticised the revised paper as being too similar to the original. The EU and Switzerland underscored that it remains unbalanced, and EU Trade Commissioner Pascal Lamy said that the draft is not comprehensive as it does not include non-trade concerns nor a peace clause.

New Economy Not Resting in Peace
Christopher Mayer (Mises Daily) Mar 21, 2003
It may still be too early to pen the postmortem on the New Economy. The final chapters on that episode are still being written. Nonetheless, Leon Levy's discursive memoir, The Mind of Wall Street, is a first cut, perhaps inadvertently so, at disentangling some of the threads that helped create the great bull market of recent vintage.

International Relations
Economist Mar 21, 2003
It is already clear that whatever the outcome of the war in Iraq, relations between the world's most powerful countries have shifted significantly. How far-reaching will the post-war changes in international relations be?

World water forum ends in failure
FT Mar 23, 2003
The world's biggest international water conference failed to achieve its stated goal of delivering concrete plans to tackle water-related problems.

G7 reaffirms faith in economic recovery
FT Mar 26, 2003
Representatives of the Group of Seven reaffirmed their faith in economic recovery in the next year, in spite of war in Iraq.

US steel tariffs illegal, rules WTO
FT Mar 27, 2003
The World Trade Organisation has ruled that the US violated international trading rules when it imposed tariffs of up to 30 per cent on steel imports last year.

How to Solve the Water Conflict Wall Street Journal Subscription Required
Richard Tren & Kendra Okonski (AWSJ) Mar 27, 2003
The next war might be over a more precious liquid.

War imperils global recovery, IMF warns
IHT Mar 28, 2003
Financial uncertainties related to the U.S. war with Iraq threaten to stymie a nascent global economic recovery, the International Monetary Fund said in a semiannual report released Thursday.

Agriculture Modalities: Final Countdown
BRIDGES Weekly Trade News Digest - Vol. 7, Number 11 Mar 26, 2003
Members are meeting in a last special (negotiating) session of the WTO Committee on Agriculture (CoA) from 25 - 31 March, but little in the way of progress is being reported. The Doha work programme requires Members to establish modalities for the ongoing agriculture negotiations by 31 March 2003. These modalities are to set out the scope of the negotiations, the methodology to be followed during the actual process, and the end-results expected. Confirming the predictions recently expressed by various actors and observers of the negotiation process, the 25 March informal plenary session revealed that trading partners are still too far apart in their positions to agree on a framework accord by the end-March deadline. Members are instead trying to identify issues on which further 'technical discussions' can be held, keeping the process alive. They are also seeking to agree on a process outcome to manage the time up until the fifth WTO Ministerial meeting in Cancun in September, where they hope modalities can be hammered out at the Ministerial level.

Rules: Members Consider Options For Addressing Fisheries Subsidies
BRIDGES Weekly Trade News Digest - Vol. 7, Number 11 Mar 26, 2003
Meeting from 19-20 March, the WTO Negotiating Group on Rules considered a new US paper on fisheries subsidies, and discussed several new submissions on anti-dumping. The US -- part of the "Friends of Fish" group that also includes Argentina, Chile, Iceland, New Zealand, Norway and Peru -- circulated a paper on fisheries subsidies prior to the meeting, and engaged in informal discussions with a number of Members, as well as with NGOs (TN/RL/W/77). The submission was intended as a move from simply reviewing the problem of fisheries subsidies to considering possible solutions, and followed a submission on a negotiating platform by the "Friends" group at the last Rules Negotiating Group meeting. The US paper presents several ideas for initial discussion, including expanding the category of prohibited "red light" subsidies under the Agreement on Subsidies and Countervailing Measures (SCM) to include fisheries subsidies that "directly promote overcapacity and over-fishing, or have other direct trade-distorting effects". It further suggests creating a "dark amber" category of fisheries subsidies that would be presumed to be harmful, unless the subsidising government could demonstrate that the subsidy did not lead to overcapacity or over-fishing, nor other adverse trade effects. The paper also proposes improved notifications of fisheries subsidy programmes under WTO rules.

World Trade
Economist Mar 28, 2003
It now looks as if a key deadline in the Doha round of world trade negotiations will be missed. As ever, agriculture is the sticking point, but now it threatens to wreck the talks altogether.

A new global power structure
Thomas L. Friedman (IHT) Mar 31, 2003
In this time of war, I find it helpful to step back a little. So I went last week to NATO headquarters in Brussels, and, I must say, the view from there was illuminating. What I think I saw were some huge tectonic plates of history moving. Here’s how I would describe it: Sept. 11 was the start of World War III, à la Pearl Harbor; the U.S. invasion of Afghanistan was the initial response, à la the North Africa campaign; the invasion of Iraq was akin to D-Day (I hope it ends as well); and now we are present at the creation of some kind of new global power structure.

Enlightened co-operation has turned into indecision Financial Times Subscription Required
FT Mar 31, 2003
The Doha round is on the brink of collapse. Its biggest problem is still the failure to reform farm trade in a way that is acceptable to rich countries and fair to poor ones.

Spring meetings preview Adobe Acrobat Required
IMF Survey Mar 31, 2003
Global Financial Stability Report; Latin American update; IMF external relations strategy; responding to asset price booms; Köhler and parliamentarians; social spending & better conditions; Ahmad on recentralization in China.

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