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July 2007 Archives


Challenges to the Multilateral Trading System
Peter Sutherland (World Economics Volume 8 Number 1) May/Jul 2007
Ever since the GATT was established in 1948, the growth in international trade and economic growth has been remarkable. The traditional mercantilism of trade relations is less and less appropriate for the global economy. Bilateral trade deals make the business environment more complex and unpredictable. Preferential trading agreements erode the principle of non-discrimination. They distort trade away from the underlying comparative advantage; create rents which are appropriated by special producer interests; multiply the complexities associated with aspects such as rules of origin, technical regulations, health and safety standards and administrative arrangements. They are also far harder to enforce than WTO rules, whose resolution mechanism has been very effective. Partial agreements outside the scope of the WTO lack the power of universal rules and legally binding commitments. Regarding the Doha Round of WTO negotiations, a key contradiction from the start was its construction as a ‘development’ round. This concept gave developing countries unrealistic expectations and opened the way for a damaging emphasis on the idea that they should not be required to make the same commitments to WTO rules as the developed countries. But avoiding WTO commitments almost always operates against the long-term economic interests of developing countries. The true development agenda lies in making commitments to WTO rules, rather than in seeking exemptions from them under the rubric of ‘special and differential treatment’. The steps needed to move forward are practical measures to reform the WTO and its processes, as well as longer-term steps towards enhancing political commitment to the framework of multilateral trade.

Aid for Trade: An essential component of the multilateral trading system and WTO Doha development agenda
Faizel Ismail (World Economics Volume 8 Number 1) May/Jul 2007
The paper argues that increased Trade and Aid are both essential to enhance the development of many developing countries. It argues further that trade-related technical assistance and capacity building is not only an essential element of the concept of special and differential treatment but is also a core element of the development dimension of the multilateral trading system. The paper provides an overview of the history of the GATT/WTO with a specific focus on capacity building and the developments in 2005 and 2006 that have contributed to the momentum for increased Aid for Trade. The issue of additionality of overall ODA and Aid for Trade is considered and the broad trends in the trajectory of ODA and Aid for Trade are assessed. In the conclusion, three reasons are discussed for developed countries to consider increasing their overall Aid commitments and additional Aid for Trade as a contribution to the successful conclusion of the Doha Round.

The List: The World’s Worst Currencies
Foreign Policy Jun/Jul 2007
Most countries seem to have finally whipped inflation—at least for now. But not everyone is celebrating the world’s impressive economic stability. In today’s List, FP takes a hard look at the soft currencies of some of the most unstable economies on the planet.

What businesses need to know about the US current-account deficit Recommended!
McKinsey Quarterly Jul 2007
The US import balancing act could continue for some time, but the correction, when it comes, will have surprising consequences. Governments and businesses should prepare for them.

The Falling Dollar and Global Economic Health Recommended!
AEI Jul 1, 2007
Since the beginning of the year, the U.S. dollar has fallen significantly, especially against the euro. By raising the cost of imports, the declining dollar could pose a challenge to the Federal Reserve Board in its quest for noninflationary economic growth. On May 31, AEI's Desmond Lachman moderated a discussion about the likelihood of a further fall in the dollar and the actions that industrialized nations should take to minimize the risk of a disruptive dollar decline.

A universal threat, a generational challenge
Al Gore (IHT) Jul 1, 2007
We - the human species - have arrived at a moment of decision. It is unprecedented and even laughable for us to imagine that we could actually make a conscious choice as a species, but that is nevertheless the challenge that is before us.

A Capital Reform Wall Street Journal Subscription Required
WSJ Jul 2, 2007
Seoul wants to become the next New York.

No Oil Yet, but African Isle Finds Slippery Dealings
NYT Jul 2, 2007
A decade ago, geologists found signs that one of Africa’s least-known countries, the tiny island nation of São Tomé and Principe, might hold a king’s ransom in oil.

Remarks to EU-Brazil summit on Doha WTO Negotiations
EU DGT Jul 4, 2007
Mandelson recognised Brazil‘s "legitimate demands" for cuts in developed world farm tariffs and trade distorting farm subsidies. He said Brazil for its part must contribute to a final agreement through the "creation of market certainty and market opening for industrial and services exports - for developed and developing countries".

Trade double-cross Recommended!
WSJ Jul 5, 2007
House Democrats go protectionist.

Money Meltdown Wall Street Journal Subscription Required
David Ranson & Penny Russell (WSJ) Jul 5, 2007
Forget the rise of the pound and euro against the dollar. The real story is the decline of all paper currencies when compared to gold.

The eight commandments
Economist Jul 5, 2007
Why the Millennium Development Goals are going about reducing poverty, disease and illiteracy the wrong way.

Skilled workers leaving Eastern Europe in droves, report finds
IHT Jul 5, 2007
Labor shortages are exacerbating concerns that foreign investment could be deterred.

At I.B.M., a Smarter Way to Outsource
NYT Jul 5, 2007
Jeffrey Taft is a road warrior in the global high-technology services economy, and his work shows why there are limits to the number of skilled jobs that can be shipped abroad in the Internet age.

Africa: Land of Hope New York Times Select Subscription Required
Nicholas D. Kristof (NYT) Jul 5, 2007
In the early 1990s, Rwanda reinforced all the worst stereotypes of Africa: wretchedly poor, torn apart by war and seemingly destined to be an international basket case forever.

Challenges for Rato’s successor
Jean Pisani-Ferry (VoxEU) Jul 6, 2007
When the IMF was a monitor of borrowers’ policies, dominance of the IMF Board by creditor countries was natural, but an institution whose main role is to facilitate global consultations and arbitrate currency disputes needs a more balanced shareholder structure.

Farming for Dollars Wall Street Journal Subscription Required
WSJ Jul 6, 2007
Another (probably hopeless) attempt to limit subsidies.

Fast and Freewheeling Globalization for All
Susan Froetschel (YaleGlobal) Jul 5, 2007
Taming globalization is no easy task agreements.

Politics and the Yuan
NYT Jul 7, 2007
Barack Obama has joined Hillary Rodham Clinton on the misguided bandwagon of those seeking to penalize China for manipulating its currency.

Privatize Foreign Aid? Wall Street Journal Subscription Required
WSJ Jul 7, 2007
A new study shows who's really the most generous.

Why the Trade Talks Collapsed Wall Street Journal Subscription Required
Jagdish Bhagwati & Arvind Panagariya (WSJ) Jul 7, 2007
The U.S. and Europe have to give on agricultural subsidies before they can expect the rest of the world to liberalize further.

The Other Side Of Immigration
Robert E. Litan and Vivek Wadhwa (Forbes) Jul 7, 2007
High-skilled immigrants create U.S. jobs.

Global Trade Talks: The Doha Disaster
Paul Blustein (Brookings) Jul 9, 2007
Glorious news from Potsdam, Germany! Global trade negotiations suffered yet another blow—perhaps a crowning one this time—as a meeting of trade ministers from the U.S., European Union, Brazil and India broke up early on June 21 with the parties declaring that they are hopelessly deadlocked. And here's more glad tidings: congressional authority for President Bush to negotiate trade pacts expired June 30, adding to the woes facing the global talks.

Dollar hits record low against euro
IHT Jul 10, 2007
Worry over the impact of subprime mortgage troubles on the economy drove the U.S. currency down Tuesday.

EU backs former French official to lead IMF
IHT Jul 10, 2007
The European Union on Tuesday broadly backed the former French finance minister Dominique Strauss-Kahn to become the next head of the International Monetary Fund, even as Britain said the race remained open.

World Bank report shows some progress in Africa on corruption
IHT Jul 10, 2007
Africa, often characterized as a place of epic corruption and misrule, emerged in a World Bank report released Tuesday as a continent of great variety, with some countries making extraordinary progress over the past decade, while others have moved backwards.

A Good, if Not Great, Deal
NYT Jul 11, 2007
A trade agreement that draws the United States and South Korea closer is well worth supporting.

Yen Drops as Advance in Stocks Signals Return to Risky Assets
Bo Nielsen and Min Zeng (Bloomberg) Jul 11, 2007
The yen fell versus the euro, dollar and a dozen other major currencies as strength in U.S. stocks signaled investors are returning to risky assets.

Jakarta Jumble Wall Street Journal Subscription Required
WSJ Jul 11, 2007
Half a cheer to Jakarta for its latest attempt to rationalize regulations governing foreign investment. The new law clarifies the rules of the game but restricts foreign capital inflows. The Trade Ministry says the enhanced transparency will help boost investment inflows. We hope it knows what it's doing, because it's playing a dangerous political game.

A Way for Resource-Rich Countries to Audit Their Way Out of Corruption
NYT Jul 12, 2007
It is unfortunate that economists have to debate whether natural resources are a blessing or a curse for a developing nation. Minerals, diamonds or oil may appear to represent automatic wealth but resource-rich countries usually become mired in corruption. High oil revenues, for instance, allow a government to maintain power and reward political supporters without doing much for its people. The government of Nigeria has taken in billions from high oil prices, yet the average person was probably better off 40 years ago. The easy-to-reach wealth of a resource also encourages coups, and thus political stability is problematic.

Junking a Baht Idea
WSJ Jul 12, 2007
Free capital flows are nothing to fear.

The global credit bubble
Economist Jul 12, 2007
Why the American housing market is still spooking the markets.

Bored with hedge funds? More investors are turning to 'exotic assets'
IHT Jul 12, 2007
Money managers have begun to look at art, wine, rare stamps and even soccer players as way to diversify risk.

Come One, Come All
Edward Glaeser (New York Sun/YaleGlobal) Jul 12, 2007
Globalization helps the cities that produce ideas.

EU trade chief seeks to end light-bulb tariffs
IHT Jul 13, 2007
The European Union trade chief, Peter Mandelson, faces a new dispute over Chinese imports as he tries to eliminate anti-dumping duties on energy-saving light bulbs.

The World Has Changed, Why Won't the Fund and the Bank?
Desmond Lachman (AEI) Jul 13, 2007
Now is the ideal time to revaluate the relevance and purposes of both the IMF and World Bank.

Trade Double-Cross Update Wall Street Journal Subscription Required
WSJ Jul 14, 2007
Garcia responds to Pelosi, and the drug czar calls out Leahy.

China Blocks Some Imports of U.S. Chicken and Pork
NYT Jul 15, 2007
China said it was suspending imports of some chicken and pork after inspectors found shipments that were contaminated with chemicals or bacteria.

In praise of a model of globalisation that didn't leave anyone behind
William Keegan (Guardian) Jul 15, 2007
The economics profession has been honouring the centenary of the birth of one of Britain's greatest economists, James Meade. Although not as well known outside the profession as Keynes, Meade made an important contribution to Keynesian economics. As one of Meade's younger acolytes points out in a current Oxford Department of Economics discussion paper ('James Meade' by David Vines), Meade played a vital role in connecting the work of Richard Kahn (whose 'multiplier' demonstrated the beneficial effects of higher investment on subsequent consumption) with the development of Keynes's thinking.

The Case for the Colombia FTA
Jose Maria Aznar (WSJ) Jul 16, 2007
Colombia needs its friends.

Liquidity and the Real Economy – Are Derivatives a Sideshow?
David Miles (MSDW) Jul 16, 2007
The stock of derivatives outstanding has grown enormously in recent years. Is this of fundamental importance to eal economic conditions, to liquidity, monetary policy and inflation? Or is the growth in derivatives really secondary to economic outcomes?

Happy Birthday ITA Wall Street Journal Subscription Required
Matthew J. Slaughter (WSJ) Jul 17, 2007
Free trade in information technology has made us rich. It's time to push for further liberalization.

French push euro countries to confront ECB
IHT Jul 17, 2007
France will press for governments of the 13 countries sharing the euro to directly confront the European Central Bank over interest rate policy, in an effort that many European officials believe is designed to lower the value of the euro vis-à-vis other currencies.

IBM reinvents itself globally to dull India's edge
IHT Jul 17, 2007
IBM offers textbook case for successful navigation of the twin challenges of globalization and technological change .

Wrong Number
Darshak Sanghavi (IHT) Jul 17, 2007
Is it cost effective to treat the world's poor?

Strong Euro: A Shield Against Higher Oil Price?
Eric Chaney (MSDW) Jul 17, 2007
Oil and euro at record levels.

Saying no to free trade
Economist Jul 18, 2007
Congress rejects a deal with Colombia.

The Boom Beyond Our Borders
WSJ Jul 18, 2007
Can China and India maintain their sizzling growth rates?

The 'Strong' Euro Wall Street Journal Subscription Required
WSJ Jul 18, 2007
A mercantalist lesson from the experts: the French.

Innovate for India's Poor Wall Street Journal Subscription Required
Ravi Venkatesan (WSJ) Jul 18, 2007
Eliminating poverty is very much in our self interest.

Continuing the Green Revolution Wall Street Journal Subscription Required
Norman E. Borlaug (WSJ) Jul 18, 2007
Persistent poverty and environmental degradation in developing countries, changing global climatic patterns, and the use of food crops to produce biofuels, all pose new and unprecedented risks and opportunities for global agriculture in the years ahead.

As Dollar Crumples, Tourists Overseas Reel
NYT Jul 19, 2007
The steep decline of the dollar against the euro has made eye-popping prices a lamentable part of the traveler's tale.

Immigration Non-Harvest Wall Street Journal Subscription Required
WSJ Jul 20, 2007
Where are all the farm workers?

Developing countries' discord emerges as new roadblock to global trade deal
IHT Jul 20, 2007
A cleavage has opened up among developing countries, becoming a major new factor in the Doha global trade talks.

Let 'Em Fail Wall Street Journal Subscription Required
Allan H. Meltzer (WSJ) Jul 21, 2007
Congress is about to propose new regulations for hedge funds. The answer to excessive risk-taking is "let 'em fail."

A Skewed Blame Game
Jagdish Bhagwati (AEI) Jul 23, 2007
India is being blamed for the logjam on Doha, but the real culprits are the United States and the European Union.

Does the IMF Constrain Health Spending in Poor Countries?
David Goldsbrough (CGD) Jul 23, 2007
International Monetary Fund (IMF) programs have often been too risk-averse in low-income countries, preventing them from exploring more ambitious, but still feasible options for higher government spending including in the health sector.

A Reality-Based Economy New York Times Select Subscription Required
David Brooks (WSJ) Jul 24, 2007
The neopopulist story line about skyrocketing inequality and the tides of globalization is incredibly simple-minded.

The Party Moves to Europe Wall Street Journal Subscription Required
WSJ Jul 24, 2007
China recycles more capital abroad.

Managing Globalization: On free trade, Democrats and Bush can't even agree on facts
IHT Jul 24, 2007
Bush has a fight on his hands as Democrats, who now control Congress, question his already-signed trade pact with South Korea.

Taxes in the Global Economy
NYT Jul 25, 2007
Where is the politician who will take an over-my-dead-body approach to future tax holidays and who will broach the need for new corporate taxes?

Doha: Draft Ag Text Meets Lukewarm Response, NAMA Likely to Be Chillier
BRIDGES Weekly Trade News Digest - Vol. 11, Number 27 Jul 25, 2007
WTO Members are in agreement that the parameters for a potential Doha Round agriculture deal identified last week by the chair of the negotiating committee constitute a "good starting point" for further talks in September.

Rwanda Becomes First Country to Try to Use WTO Procedure to Import Patented HIV/AIDS Drugs
BRIDGES Weekly Trade News Digest - Vol. 11, Number 27 Jul 25, 2007
Nearly four years after WTO Members agreed on a procedure for poor countries to import generic versions of patented medicines that they are unable to produce themselves, Rwanda has become the first country to notify the global trade body that it intends to use it.

Farm Subsidies Seem Immune to an Overhaul
NYT Jul 26, 2007
Democratic leaders have lowered their sights on cutting subsidies in part to protect rural freshman lawmakers who may be vulnerable in 2008.

Globalization Study Moves Past Rhetoric Wall Street Journal Subscription Required
David Wessel (WSJ) Jul , 2007
Most of the policy briefs, working papers and trade-association reports that cross a columnist's desk slide easily into the trash can or onto the read-someday pile. But a recent study on globalization, commissioned by the Financial Services Forum, an association of the chief executives of 20 huge financial companies, ranging from American International Group and Citigroup to UBS and Wachovia, stands out.

Global Markets Tumble as Credit Worries Deepen
NYT Jul 27, 2007
The Dow industrials lost more than 300 points Thursday, following similar drops in Europe. Friday morning trading saw the Nikkei drop 2.5 percent.

Immigration Paralysis Wall Street Journal Subscription Required
George Melloan (WSJ) Jul 27, 2007
Our $13 trillion economy demands labor. Why not let Mexicans supply it?

Assessing the Dollar Undershoot
Stephen Jen (MSDW) Jul 27, 2007
We are refreshing our currency forecasts. Two key adjustments have been made. (1) We mark to market the weakness in the dollar since mid-June, reflecting the intense sub-prime angst, as well as lingering weakness in the US housing market. While we still believe that the dollar will re-assert itself in 2H from these under-valued levels, especially against the EUR and the GBP, we are now taking more seriously the impact of the structural diversification by US real money accounts. (2) We now think that, in a robust global economy, AUD and NZD should do well, just as the CAD has.

Toiling in the Dark: Africa's Power Crisis
NYT Jul 29, 2007
Crippling electricity shortages in sub-Saharan Africa have begun to hamper the region's development.

Despite French pressure on exchange rates, ECB has reason to stay calm
IHT Jul 30, 2007
The bank president, Jean-Claude Trichet, is blessed with strong allies and confident that the European public is behind him, it seems.

Why Africa Fears Western Medicine
Harriet A. Washington (NYT) Jul 31, 2007
Africa has harbored a number of high-profile Western medical miscreants who have intentionally administered deadly agents under the guise of providing health care or conducting research.

The Best Economy Ever Wall Street Journal Subscription Required
David Hale (WSJ) Jul 31, 2007
Forget about the stock market blips. World economic policy has never been so good.

Friedman's Legacy Wall Street Journal Subscription Required
Thomas F. Siems (WSJ) Jul 31, 2007
The great economist saw opportunity in free markets and globalization.

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