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June 2003 Archives


Free Trade Optimism: Lessons From the Battle in Seattle
Dani Rodrik (Foreign Affairs) May/Jun 2003
A new memoir from Mike Moore, the former director-general of the World Trade Organization, sheds light on the institution and ponders globalization's challenges.

Iraq - Bank and Fund in no man's land
Bretton Woods Update 34 May/Jun 2003
Plus Bank private sector watchdog calls for stricter policing; Chad-Cameroon: oil and poverty reduction don't mix; Circling the wagons: World Bank-IMF-WTO coherence; Debate continues over services report; and 'Parliamentary Front' on IFIs.

Is Financial Globalization Harmful For Developing Countries?
IMF Forum Jun 2003

Financial globalization Adobe Acrobat Required
IMF Survey Jun 2, 2003
Plus fiscal deficits and inflation; performance budgeting; global food aid, measuring IMF resources; growth and poverty reduction; collective action clauses.

Sunanda K. Datta-Ray: A setback for democracy?
Sunanda K. Datta-Ray (IHT) Jun 2, 2003
The epidemic of severe acute respiratory syndrome, or SARS, has forced Asians to review their notions of democracy and crisis management. The danger is that countries only now emerging from authoritarianism might be tempted to set back the clock of political liberalization.

Poverty and the G8
Economist Jun 2, 2003
Leaders from the world’s poorer countries were invited to press their case for more aid, trade, investment and debt relief at the rich countries’ summit in Evian, France. But they have come away disappointed.

Bringing China In From the Cold
Nicholas Kristof (NYT) Jun 3, 2003
The Group of 8 is confronting 21st century challenges in the absence of the nation that may well dominate the century.

Globalization Will Bring Democracy Wall Street Journal Subscription Required
David Hale (WSJE) Jun 3, 2003
Ending economic isolation in the Muslim world will help encourage more tolerance of political freedom and democracy.

Banks sign up to emerging market finance accord
FT Jun 4, 2003
Nine banks from seven countries are to adopt guidelines for project finance in emerging markets, in the first industry-wide attempt to increase socially responsible lending.

G8 leaders vague on global economic prospects
FT Jun 4, 2003
The G8 group of major industrial nations wound up their summit in Evian with a lukewarm statement of confidence in a global economic recovery.

The Strong-Dollar Policy: Barking At the Moon
Clive Crook (Atlantic) Jun 4, 2003
This administration has no policy on the dollar, and is right to have no policy on the dollar.

It’s the bond market, stupid! Recommended!
Economist Jun 4, 2003
A look at the strange relationship between the bond market and the equity market.

S&D Review Back Underway
BRIDGES Weekly Trade News Digest - Vol. 7, Number 20 Jun 4, 2003
The review of special and differential treatment (S&D) provisions for developing countries recommenced on 21 and 23 May, as General Council (GC) Chair Perez del Castillo (Uruguay) held informal meetings with Heads of Delegations (HOD). Following the 21 May meeting, Members were able to agree on accepting two additional proposals (based on language that differed from the original proposals), bringing up the total of proposals 'accepted for agreement' to 14, out of 88. Prior to these meetings (on 20 May), Chair Perez del Castillo also circulated a letter to the various Chairs of other relevant WTO bodies, requesting that they consider 'as soon as possible' the proposals selected to be dealt with by subsidiary bodies (his category II of proposals). The circulation of this letter, indicated one trade source, marked the acquiescence of a number of developing countries who had opposed sending the S&D proposals to subsidiary bodies (and thus making them part of the broader round of negotiations).

WTO Members Miss DSU Negotiating Deadline
BRIDGES Weekly Trade News Digest - Vol. 7, Number 20 Jun 4, 2003
The WTO special session of the Dispute Settlement Body (BSD) missed its end-May deadline for reforming the Dispute Settlement Understanding (DSU). Members instead agreed on 28 May to continue negotiations, based on a new draft prepared by Chair Péter Balás (Hungary). However, they did not agree on a new schedule for negotiations, nor on their scope, or on whether a new negotiating mandate was required. Delegates have been reviewing the DSU, following a mandate from the Doha Ministerial meeting in 2001, and Chair Balás convened a number of informal meetings over the last few weeks in addition to the formal negotiating session on 20, 21, 23 and 28 May. Some Members had hoped that the group could have agreed on at least a limited number of provisions, providing an early harvest for the fifth WTO Ministerial in Cancun in September.

Scrap the G8 Financial Times Subscription Required
Gerard Baker (FT) Jun 5, 2003
For years I have braved four-star hotels, lavish buffets and late-night tipples to bring the reader essential information on the proceedings of world economic summits.

Currency traders rake in the money
FT Jun 6, 2003
Currency traders have been minting it this year, helping offset parts of Wall Street banks that are in a slump, such as investment banking.

Britain Should Join the Eurozone . . . Wall Street Journal Subscription Required
Christopher Huhne (WSJE) Jun 6, 2003
The euro will boost investment, productivity and growth.

. . . No, That Would Hurt Everyone Wall Street Journal Subscription Required
John Redwood (WSJE) Jun 6, 2003
Germany, and others, should hope the U.K. stays out.

IMF Managing Director Underscores Importance of Strengthening Economic Cooperation in the Middle East
IMF Jun 6, 2003
Mr. Horst Köhler, Managing Director of the International Monetary Fund (IMF), issued the following statement today after a meeting on June 5, 2003 in Doha, Qatar, with the finance ministers and central bank governors of the Gulf Cooperation Council (GCC).

Britain and the euro: A Fading Prospect?
Economist Jun 6, 2003
The British government will announce on Monday its latest judgment on whether the conditions are right for Britain to join the euro. Political divisions over the issue are as sharp as ever

Britain may vote on euro next year
IHT Jun 10, 2003
Gordon Brown, chancellor of the Exchequer, on Monday said for the first time that Britons might vote next year on joining the European single currency.

Farm trade
Economist Jun 10, 2003
Europe’s agriculture ministers are meeting for yet another attempt to agree on reform of the common agricultural policy. How far they succeed will affect the broader Doha round of world trade talks.

World on the Move
Economist Jun 10, 2003
A new report shows a sharp rise in the numbers of migrants worldwide. In many cases, it makes economic sense for richer countries to accept workers from poorer ones. But even countries that traditionally welcome immigrants are having doubts.

Short Memories, Deep Pockets
Economist Jun 10, 2003
Investors desperate for high yields are piling into high-risk bonds. Here we go again.

Are the bulls ready to run the markets?
IHT Jun 12, 2003
The bear that held global investors under its sway for three years has loosened its grip.

TNC Hears Statement By Burkina Faso President, Considers Submission On Road To Cancun
BRIDGES Weekly Trade News Digest - Vol. 7, Number 21 Jun 12, 2003
The WTO Trade Negotiations Committee (TNC) met on 10 June to consider reports on progress in ongoing negotiations, and heard a statement by the president of Burkina Faso regarding a submission by West and Central African countries on cotton subsidies.

Busy TRIPs Council Session Focuses On Health, Biodiversity, GIs And S&D
BRIDGES Weekly Trade News Digest - Vol. 7, Number 21 Jun 12, 2003
Meeting on 4-5 June and again briefly on 6 June, the regular session of the Council for Trade-related Aspects of Intellectual Property Rights (TRIPs) received a number of proposals related to health and biodiversity. While momentum for progress on the relationship between the TRIPs Agreement and the Convention on Biological Diversity (CBD) appears to be growing, progress on TRIPs & health remains elusive. On 6 June, the TRIPs Council met for a special (negotiating) session on the multilateral register for geographical indications for wines and spirits, where countries largely repeated their traditional positions.

Detecting and Preventing Financial Crises-Recent IMF Approaches
Anne O. Krueger (IMF) Jun 12, 2003
These are uncertain times for the global economy and, therefore, for many of the emerging market economies that rely on the Fund for help in developing sustainable economic policies. At the same time, we live in an age of great and rapid change. The problems that confront the international financial system are, in many respects, radically different from those just a decade or so ago.

Chirac the Trade Killer Wall Street Journal Subscription Required
WSJE Jun 13, 2003
The French are trying to scuttle reform of EU subsidies to farmers.

Strengthening Global Cooperation
Shigemitsu Sugisaki (IMF) Jun 13, 2003
The leaders of the major industrial countries will have an opportunity to demonstrate strong leadership and cooperation when they meet for the G-8 summit in Evian, France, during the first days of June. Even though the welcome end to war in Iraq and the sharp fall in world oil prices have been positive developments for the world economy, significant challenges and uncertainties remain. Assuring a sustained global recovery will surely be high on the agenda in Evian.

Stronger currency may ease inflationary pressures
LatinFocus Jun 13, 2003
Amid the favourable trend of increased capital flows to emerging markets, the real has strengthened notably in recent months, brining the currency to levels observed just prior to the politically-induced deterioration last year. The currency appreciation could ease mounting inflationary pressures throughout the year, enabling the Central Bank to loosen monetary reins and help bring the economy back on track.

Deflation worries Adobe Acrobat Required
IMF Survey Jun 16, 2003
Plus: Indonesia sets course for future; Closing weak banks; Disinflation in Turkey; CIS conferences stress trade, Financial sector development; Restoring confidence in the global economy; Insider trading

FTA Would Benefit Taiwan and U.S. Wall Street Journal Subscription Required
Jim Ramstad (AWSJ) Jun 17, 2003
One of the most effective ways for the U.S. to promote democracy and human rights is to negotiate free trade with Taiwan.

Europe's trade hypocrisy: The West pays to keep the rest poor
Philip Bowring (IHT) Jun 17, 2003
The Doha round of trade negotiations is rapidly approaching a crisis. The behavior of some European countries is proving so selfish and shortsighted that key developing countries may soon come to the conclusion that it would be better to walk away from the table than carry on with wrangling over secondary issues while progress on the crucial one of agriculture is sabotaged.

Challenges Ahead on the Road to Cancún
WTO Jun 17, 2003
Director-General Supachai Panitchpakdi, in his opening remarks at the WTO public symposium “Challenges Ahead on the Road to Cancún” on 16 June 2003, said that it has become increasingly evident to political and business leaders the world over that the weak global economy urgently needs the stimulus of a significant trade liberalization.

Are the bears in retreat? Financial Times Subscription Required
FT Jun 18, 2003
An improving corporate outlook and the readiness of central banks to cut rates have spurred a global rally in equities. Yet the fundamentals are not all encouraging.

Dimes in front of a freight train
Economist Jun 18, 2003
JAPAN has rewritten economic history in recent years and its inhabitants must wish it hadn’t. That it has the lowest government-bond yields in recorded history, thanks to apparently never-ending deflation, is well known. Less well known is that its companies are now also able to borrow in the corporate-bond market at what must be the lowest margins over government bonds ever recorded—which probably makes them the most expensive corporate bonds in history. Given the parlous state of Japan’s financial system, its high bankruptcy rate, high corporate debts and the debilitating effects of deflation on companies’ profits, to point out only a few of the country’s ills, this is peculiar.

Agreement On EU CAP Reform Expected By End-June
BRIDGES Weekly Trade News Digest - Vol. 7, Number 22 Jun 18, 2003
On 17 June, EU farm ministers resumed talks to hammer out a final compromise deal on the future of the European Common Agricultural Policy (CAP). The talks followed the collapse of negotiations a week earlier due to France and Germany taking a joint stance against plans EU Agriculture Commissioner Franz Fischler's plans to fully cut the link between -- or de-couple -- EU farm subsidies from agricultural production. Nevertheless, sources reported some optimism with regard to the possibility of reaching a final agreement by 19 June. "It is possible for us to get a reform package that everyone can live with," said UK Department of Environment, Food and Rural Affairs Secretary Margaret Beckett. However, the new joint Franco-German approach may jeopardise the prospects of WTO Members bringing the sluggish Doha Round negotiations back on track in September at Cancun, with officials of the Cairns Group of agricultural exporters indicating that they could not agree on a multilateral farm deal along the lines of a watered-down Fischler proposal.

CTD Considers Technical Assistance, Regional Arrangements, Primary Commodities
BRIDGES Weekly Trade News Digest - Vol. 7, Number 22 Jun 18, 2003
The 45th Session of the WTO Committee on Trade and Development (CTD) met on 22 May and again on 15 June to review, inter alia: the 2002 Technical Cooperation Audit and the 2003 Technical Assistance Plan; the procedures for notifying regional trading arrangements between developing countries; and the mandate of having sustainable development appropriately reflected at the WTO. In addition, three developing country Members submitted a 'non-paper' on the need for WTO action regarding the long-term decline in the prices of primary commodities. On 22 May, Members elected Ambassador Habib Mansour of Tunisia as the new Chair of the Committee.

France's blocking tactics over CAP
Economist Jun 19, 2003
The EU's agriculture ministers continued to argue over proposed reforms to Europe's common agricultural policy. France led the opposition.

Who will lead the new Europe?
IHT Jun 20, 2003
The European Union is to have two presidents. One, as usual, will head the executive commission for five years, the other will be a full-time "Mr. Europe" elected by the EU's national prime ministers from their own ranks for a two-and-a-half-year term. The question is, yes-man or strongman?

US futures exchanges fight foreign rivals
FT Jun 20, 2003
The big two US futures exchanges began a campaign to keep out foreign competition, urging Congress to impose strict criteria before granting competitors a US licence.

Cheap drugs move to aid WTO deal
FT Jun 23, 2003
The world's leading pharmaceutical companies are set to unveil proposals to ease the supply of essential medicines to poor countries, in an attempt to break a WTO deadlock.

The lesson of US currency union Financial Times Subscription Required
Martin Wolf (FT) Jun 23, 2003
The US is unique among large, high-income countries in enjoying both high employment and high productivity.

Europe Snubs World's Poor
NYT Jun 23, 2003
The European Union has done a disservice to poor farmers by not making any real reforms in Europe's agricultural policy.

Trade pact opens door to cronyism
Philip Bowring (IHT) Jun 24, 2003
On June 30, to coincide with the sixth anniversary of Hong Kong's handover to China, the territory's government will officially unveil a Closer Economic Partnership Arrangement with China. This free-trade agreement is being presented as an administrative triumph that holds the promise of more trade with the mainland. But the pact, known as CEPA, is a metaphor for the misgovernance of Hong Kong by a leadership more concerned with protecting its political interests in Beijing - and the commercial interests of a few Hong Kong business groups - than with spurring the local economy.

A Cooperative Approach to Strengthening Global Growth
Eduardo Aninat (IMF) Jun 24, 2003
The world economy continues to face significant uncertainty. The balance of risks has improved somewhat: the headwinds from the bursting of the equity price bubble are diminishing; there is considerable policy stimulus in the pipeline, particularly in the United States and the United Kingdom; and oil prices have fallen from their peaks early this year. Still, the recovery remains gradual and tentative so far, and corporate fixed investment, in particular, is still weak. Overall, I believe that global growth in 2003 will likely remain below trend at about 3 percent , before picking up to about 4 percent in 2004. But the currently sluggish pace of growth in the advanced economies presents a particular problem for emerging market and developing countries, whose prospects depend critically on growing international trade and a healthy world economy.

The City should embrace the single currency Financial Times Subscription Required
Christopher Johnson (FT) Jun 25, 2003
The City's growth could recover rapidly if it placed itself at the centre of the euro financial markets.

Eurozone may outperform the dollarzone Financial Times Subscription Required
Martin Wolf (FT) Jun 25, 2003
Today few, if any, believe the eurozone could outperform the US in the years ahead. They are probably right. But maybe, just maybe, the eurozone will surprise them all.

Asia's currency free-riders must pay their way Financial Times Subscription Required
Desmond Lachman (FT) Jun 25, 2003
It falls to the US to take a lead in exerting pressure on Asia's currency manipulators.

How to Start a Trade War Wall Street Journal Subscription Required
Lawrence Lindsey (WSJ) Jun 25, 2003
Our tax rules violate international trade rules.

WTO Members Fail To Make Progress At Mini-Ministerial
BRIDGES Weekly Trade News Digest - Vol. 7, Number 23 Jun 25, 2003
Trade Ministers from 31 WTO Member countries met from 21-22 June in Sharm el-Sheikh, Egypt, for a mini-ministerial meeting, seeking to find solutions to the current deadlock under the Doha round of trade negotiations. WTO Director-General Supachai Panitchpakdi expressed his concern at the lack of movement and political will in negotiations, especially with regard to agriculture, and told ministers that time was running out for a deal. The meeting was the third mini-ministerial held since the beginning of the Doha round in November 2001, and followed up from a similar meeting of ministers in Tokyo in February. This past weekend' meeting focussed on paving the way for the fifth WTO Ministerial Conference to be held in Cancun, Mexico in September.

Singapore Issue Controversy Continues
BRIDGES Weekly Trade News Digest - Vol. 7, Number 23 Jun 25, 2003
Meeting from 12-13 June, the WTO Council for Trade in Goods focused its work on trade facilitation, with Members continuing to disagree on the need for a negotiated multilateral framework on this issue. The WTO Working Group on Transparency in Government Procurement met on 18 June, where delegates are also divided over launching negotiations at the WTO's fifth Ministerial meeting in Cancun, Mexico in September. Meanwhile, informal negotiations headed by the General Council Chair and the Chairs of WTO Working Groups on the so-called Singapore issues -- that include investment and competition policy apart from trade facilitation and government procurement -- are ongoing.

Slumping foreign investment
Economist Jun 26, 2003
Foreign direct investment, from cross-border mergers to the building of new factories, has been battered by global economic uncertainty and changing attitudes towards corporate marriages. Will it revive any time soon?

Economist Jun 26, 2003
Shares are even more expensive now, relative to profits, than they were at their peak. For that, partly thank (or blame) the money managers who are scared of losing the cash they fail to invest

Why the U.S. isn't cut out for imperialism
Slate Jun 26, 2003
The question of the moment is not "When will the MET-Alpha team find Iraq's weapons of mass destruction?" (we've all long ago exhaled on that one), but rather "When will the neo-imperialist intellectuals go into hiding?" George W. Bush may be mildly vexed over the failure thus far to unearth vats of VX and anthrax. But Paul Wolfowitz, Richard Perle, William Kristol, and the other strategic brains behind the operation should be absolutely mortified over the past few weeks of Iraq's unraveling and America's postwar failure to secure and consolidate its dazzling military victory.

Justice in trade Financial Times Subscription Required
John Kay (FT) Jun 26, 2003
Poor people are poor because they do not participate sufficiently in the world international trading system. They are not poor because they are unjustly treated when they do.

Address on Globalization
Anne O. Krueger (IMF) Jun 26, 2003
International trade has a long and honourable pedigree. For thousands of years, individuals and nations have prospered by buying from and selling to each other. And for thousands of years international trade has been the driving force behind globalisation. Economists did not dream up the laws of comparative advantage while locked away from the real world. Quite the opposite. They were simply explaining what they had observed. Even before money was invented as a means of exchange, traders were bartering—offering the best of what they had in exchange for what they wanted. In doing so, they were making judgments about relative economic value.

Reconstructing Iraq and the Middle East
Economist Jun 26, 2003
America used a meeting of the World Economic Forum in Jordan to float the prospect of free entry to American markets for Middle Eastern countries ready “to embrace economic liberty and the rule of law”. Jordan, Morocco and Bahrain are front-runners.

A genuine breakthrough?
Economist Jun 26, 2003
The EU's farm ministers agreed to a compromise deal to reform the common agricultural policy. The Union's farm commissioner, Franz Fischler, was forced to accept more gradual and less radical changes than he had planned.

Around the markets: Suddenly, dollar bulls in charge
IHT Jun 27, 2003
Is the dollar, beaten up for much of the last year and a half, making a comeback?

Bush Calls for Changes in Africa to End Wars and Promote Trade
Richard W. Stevenson (NYT) Jun 27, 2003
President Bush demanded Liberia's leader step down, called for change in Zimbabwe and for the dispatching of an envoy to Sudan.

Don't Revalue the Yuan
Ronald McKinnon (AWSJ) Jun 27, 2003
A floating yuan may have severe deflationary consequences for China.

Hong Kong and China sign free trade agreement
IHT Jun 30, 2003
The governments of Hong Kong and mainland China signed a broad free-trade agreement Sunday providing greater access to the Chinese market for Hong Kong businesses, including the local subsidiaries of multi-national corporations.

World Money at the Palazzo Mundell Recommended!
Robert L. Bartley (WSJ) Jun 30, 2003
Does the global economy need a global currency?

Aninat on Africa Adobe Acrobat Required
IMF Survey Jun 30, 2003
Plus: West AFRITAC opens; Köhler on Mexico's economic turnaround; Africa & oil revenues; employment protection costs; health care spending & the poor.

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