News & Commentary:

September 2004 Archives


A financial system at breaking point
Euromoney Sep 2004
Iraq and Argentina’s debt problems will dominate this month’s IMF/World Bank meetings, with the size of their liabilities casting doubt on the international financial system’s ability to cope.

Europe's Unity in European Values
Jan Peter Balkenende (Project Syndicate) Sep 2004
Alongside the debate about the European Union constitution, a debate about European values has also developed. This debate is important not only for implanting meaning in the constitution, but will also determine the vitality and energy of the EU itself.

Asia's Dysfunctional Democracies
Satyabrata Rai Chowdhuri (Project Syndicate) Sep 2004
Asia has been gripped by election fever all year. The Philippines and Taiwan have chosen new presidents; India and Malaysia have ushered in new parliaments and prime ministers. September brings two more vital polls: a legislative election in Hong Kong and a presidential election in Indonesia. Voters there may also extend a disturbing paradox that has emerged in the region: the more "vigorous" Asian democracy becomes, the more dysfunctional it is.

Eternal Debts
Adolfo Perez Esquivel (Project Syndicate) Sep 2004
"Everything . . . everything changes." So goes the refrain in a famous Argentine song. But actually, in Argentina everything stays the same or becomes worse.

WTO approves sanctions on U.S Recommended!
IHT Sep 1, 2004
The ruling by the Geneva-based trade body came after U.S. lawmakers failed to repeal antidumping rules.

Bye, Bye Byrdie Recommended! Wall Street Journal Subscription Required
WSJ Sep 1, 2004
There's a simple way to head off retaliatory trade tariffs.

Growing pains
Economist Sep 1, 2004
Emerging economies’ stockmarkets, especially those in Asia, look attractive.

ACP Countries Concerned As Brazil Celebrates Favourable Sugar Ruling
BRIDGES Weekly Trade News Digest - Vol. 8, Number 28 Sep 1, 2004
On 4 August, the WTO panel examining a complaint against the EC's export subsidies for sugar ruled in favour of Brazil and co-complainants Australia and Thailand in an interim decision issued exclusively to the parties. According to sources, the panel upheld Brazil's claim that EC subsidies provided were in excess of the bloc's WTO reduction commitment levels for sugar under the Agreement on Agriculture (AOA).

Supachai Consults Members On Controversial Textiles Quota Phase-out
BRIDGES Weekly Trade News Digest - Vol. 8, Number 28 Sep 1, 2004
On 3 August, WTO Director-General Supachai Panitchpakdi held consultations among WTO Member countries on whether to organise an emergency meeting to respond to concerns around the global phase-out of textiles quotas at the beginning of 2005. The consultations were in response to a request made by Minister Cuttaree of Mauritius in July. Mauritius, along with vulnerable textiles producers such as Bangladesh and Nepal, had raised concerns regarding their ability to compete in a post-quota world, and requested an emergency meeting to examine adjustment costs. They warned that the phase-out of quotas, in combination with the emergence of China in the market, would lead to "unintended consequences," which would cost "hundreds of thousands if not millions of jobs in those countries that can least afford it".

US Byrd Amendment – WTO says eight WTO Members may retaliate against the US Recommended!
WTO Sep 1, 2004
The WTO arbitrators have given a green light for eight WTO Members to retaliate up to more than $150 million against the U.S. for failing to comply with its international trade obligations. This relates to the “Byrd Amendment”, under which anti-dumping and countervailing duties are distributed to the domestic companies that had requested or supported the imposition of those duties.

Netherlands: Losing Competitiveness in a Monetary Union
Annemarieke Christian (MSDW) Sep 3, 2004
This is the first of a two-part piece on the loss of price competitiveness of the Dutch economy and the resulting shift within exports from domestically produced goods to re-exports, turning the Netherlands into a bazaar economy.

APEC Makes Change to Currency Stance
Andy Mukherjee (Bloomberg) Sep 5, 2004
A communiqué, issued in Chile by finance ministers of the Asia-Pacific Economic Forum conveys an impression that currency flexibility in China is a rather long work-in-progress, if it's even that.

Currencies: Oil and Currencies
Stephen L Jen (MSDW) Sep 6, 2004
The net effect of oil price shocks is likely to be USD positive short run, but this should fade over time, particularly against the EUR.

Netherlands: Losing Competitiveness in a Monetary Union (Part 2)
Annemarieke Christian (MSDW) Sep 6, 2004
This is the second of a two-part piece on the loss of price competitiveness of the Dutch economy.

The Candidates' Tariff Dodge
NYT Sep 6, 2004
Of all the issues the candidates are avoiding, the question of agricultural subsidies may be the one they're ducking most energetically.

India makes a dent in its debt
AT Sep 7, 2004
Standard & Poor's has upgraded India's long-term foreign and local currency outlook, a sign that efforts to reduce short-term debt are paying off. And thanks to robust foreign exchange reserves, it is quite possible that the country's rating could be further upgraded. - Kunal Kumar Kundu

Growing pains
The Economist Sep 7, 2004
Emerging economies’ stockmarkets, especially those in Asia, look attractive

Global: Rebalancing or Relapse?
Stephen Roach (MSDW) Sep 7, 2004
An unbalanced world economy needs a new recipe for sustainable growth. A two-engine global growth dynamic has been pushed to excess. The over-extended American consumer can no longer carry the demand side of the equation. And an over-heated Chinese economy can no longer power the supply side. Nor can the world, as a whole, sustain the massive imbalances -- financial and trade -- that have arisen from this lopsided growth paradigm. But risks are building that a rebalancing may not go smoothly. As China and the US now slow, new growth engines must fill the void. Absent that important shift in the mix of global growth, the imperatives of rebalancing could well give way to a global relapse.

World Bank study on the global business environment
Economist Sep 8, 2004
A new study shows that bad regulations are a huge brake on global growth. But reforming or repealing them is easier than you think.

World Faces a New Domino Effect From China
William Pesek Jr. (Bloomberg) Sep 8, 2004
In the age of globalization, productivity is the fuel that keeps economies growing. Yet thanks to China, the world may have too much of a good thing on its hands.

Argentina And Brazil Propose "Development Agenda" For WIPO
BRIDGES Weekly Trade News Digest - Vol. 8, Number 29 Sep 8, 2004
Over the last week, Argentina, Brazil and Bolivia informally circulated a proposal to establish a "development agenda" at the World Intellectual Property Organisation (WIPO). The proposal, to be officially presented at the upcoming thirty-first session of the WIPO General Assembly at the end of the month, is expected to be controversial. Some developing country trade observers have characterised it as "groundbreaking," and as an important step in the rethinking of the role of developing countries in WIPO, since it is the first proposition of its kind at the organisation. The proposal criticises the general nature of WIPO, arguing that it is time for the institution to integrate the UN-wide development agenda, including the commitments set out in the Millennium Development Goals, in its mandate. It also touches on the basic principles and structure of WIPO, and questions the role WIPO has played in promoting development. While the Doha Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and Public Health has been a milestone for one aspect of intellectual property, the proponents consider it to be time to turn attention to what arguably is one of the most important institutions in setting future intellectual property (IP) policy.

ASEAN Looks To Deepen Integration, Forge New Trade Ties
BRIDGES Weekly Trade News Digest - Vol. 8, Number 29 Sep 8, 2004
The ten-member Association of Southeast Asian Nations (ASEAN) finance ministers concluded their four-day annual meeting on 7 September in Jakarta, Indonesia. The meeting sought to lay the foundation for greater integration and marked several pivotal trade agreements and negotiations between ASEAN and key countries, such as New Zealand, Australia, Japan, Korea, China and India. In concrete terms, the six original members -- Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand --decided to abolish tariffs in 11 sectors (rubber, electronics, autos, textiles, air travel, tourism, agriculture, e-commerce, fisheries, wood, and healthcare) by 2007. The newer members, Cambodia, Myanmar, Laos, and Vietnam, will phase out tariffs by 2012. ''Equipped with a clear road map and schedule, those sectors of priority will certainly encourage the growth and integration of the other sectors,'' commented Indonesian President Megawati Sukarnoputri.

Brazil Wins Trade Battles Against US, EU
Forbes Sep 8, 2004
Latin America's agricultural giant scored two trade victories Wednesday against rich countries' farm subsidies after the World Trade Organization agreed with Brazil that its farmers have been hurt by government assistance for U.S. cotton farmers and European Union sugar beet growers.

The pattern is global, but the causes are local
William Pfaff (IHT) Sep 9, 2004
Terrorism and the measures adopted against it acquire reciprocal momentum that is all but impossible to stop once a certain threshold has been crossed. That threshold was crossed in Russia last week, with potentially enormous consequences for civil liberties in that country, for civil peace in the Caucasus and possibly for the existing peaceful relationship between Russia and America.

Kerry's Pre-Emption Wall Street Journal Subscription Required
AWSJ Sep 9, 2004
Guess who's supporting pre-emptive protectionism?

The Risks Ahead for the World Economy Recommended!
C. Fred Bergsten (IIE) Sep 9, 2004
Five major risks threaten the world economy. Three center on the United States: renewed sharp increases in the current account deficit leading to a crash of the dollar, a budget profile that is out of control, and an outbreak of trade protectionism. A fourth relates to China, which faces a possible hard landing from its recent overheating. The fifth is that oil prices could rise to $60 to $70 per barrel even without a major political or terrorist disruption, and much higher with one.

World votes for Kerry in a landslide
Jim Lobe (AT) Sep 9, 2004
With less than two months to go before the US presidential election, the two main candidates are still almost neck-and-neck, with George W Bush pulling out a slight lead recently. But a poll taken in 35 countries in all regions of the world indicates that if non-Americans could vote, Bush would not come close to rival John Kerry. Traditional European allies, in particular, are fed-up with the incumbent's foreign policy.

The latest in remote control
The Economist Sep 9, 2004
After the call-centre, now the IT department is off to India.

An Elder Challenges Outsourcing's Orthodoxy Recommended!
Steven Lohr (NYT) Sep , 2004
At 89, Paul A. Samuelson, the Nobel Prize-winning economist and professor emeritus at the Massachusetts Institute of Technology, still seems to have plenty of intellectual edge and the ability to antagonize and amuse.

Exchange Rate Movements and the U.S. International Balance Sheet
Michele Cavallo (FRBSF) Sep 10, 2004
The U.S. current account deficit has been growing for several years, as the country has been importing increasingly more than it has been exporting. In 1992, the current account deficit was 0.8% of GDP, and by the end of 2003, it had soared to an unprecedented 4.8% of GDP.

News Analysis: EU sends a message to newest members
IHT Sep 10, 2004
The East's success must not come at Westerners' expense.

Are Free-Trade Agreements Good for Your Health? Wall Street Journal Subscription Required
Andres Mejia-Vergnaud & Ben Irvine (AWSJ) Sep 10, 2004
FTAs encourage innovative product launches by local firms.

Global: Spinning Its Wheels
Stephen Roach (MSDW) Sep 10, 2004
As the US economy now enters the 34th month of the current expansion, debate over sustainability remains as intense as ever. In a recent congressional appearance, Federal Reserve Chairman Alan Greenspan stated, “the expansion has regained some traction” after having gone through an energy-price-induced soft patch last spring. With all due respect to Mr. Greenspan, at this point in time, such a claim is largely an assertion based on a very creative interpretation of ever-volatile hard data. In my view, the case for traction in the US economy remains a weak one.

De Tocqueville's "Dangerous Moment": The Importance Of Getting Reforms Right
Anne O. Krueger (IMF) Sep 10, 2004
I want to start by explaining that reference to De Tocqueville. I hope both you and Alexis de Tocqueville himself will indulge my having taken his phrase a little out of context. De Tocqueville, as many of you probably know, was actually arguing that embarking on a reform process could prove a dangerous moment for bad governments—the implication being that this could prove their undoing. My theme this evening is somewhat different. I still want to argue that when governments introduce reform is a dangerous moment. But my focus is on the difficulties that all governments inevitably encounter in judging what reforms to introduce; when; and how fast. Opportunities for reform are infrequent and if critical efforts go wrong, reforms get discredited. Once that happens it can be difficult to get another chance to introduce reform. And successive reforms failures make each subsequent effort that much more difficult—and more costly.

Safeguards Dash Hope for Free Trade in Textiles
Andy Mukherjee (Bloomberg) Sep 12, 2004
Global free trade may yet be denied its first major victory.

Muddled and Maddening Wall Street Journal Subscription Required
Jagdish Bhagwati (WSJ) Sep 13, 2004
John Kerry's policies on trade are the voodoo economics of our time.

This Byrd Won't Fly Wall Street Journal Subscription Required
WSJ Sep 13, 2004
Congress should stop undermining the WTO.

Asians Would Conquer Europeans With a G-4
William Pesek Jr. (Bloomberg) Sep 13, 2004
Those Group of Seven folks who wield such influence over the lives of billions couldn't have been happy reading the Financial Times last Friday. It reported on an effort to shape up the world's most exclusive club.

Global: The Corporate Paradox
Stephen Roach (MSDW) Sep 13, 2004
Corporate America just doesn’t get it. Or does it? With companies awash in newfound earnings and cash flow, most believed that US businesses would step up and deliver on the hiring and capacity expansion fronts. That hasn’t happened. Instead, companies have cut back on hiring as never before, stretched existing workforces, and earmarked investment budgets mainly toward the replacement of obsolete or worn out capital stock. The liquidity windfall has been retained for another day -- or paid out to shareholders in the form of dividends and accelerated stock buybacks. Contrary to widespread expectations, the healing of Corporate America has not jump-started recovery in the broader US economy. The critical questions: Why not, and will this trend continue?

Smart? Skillful? Probably Just Lucky Recommended!
Henry Blodget (Slate) Sep 13, 2004
The (vast and unappreciated) role of luck in investing.

Despite oil, 'global recovery confirmed'
IHT Sep 14, 2004
The global economy will weather the 34 percent jump in crude oil this year and keep growing, central bank governors from the Group of 10 said after meeting on Monday.

A battered UN needs to go back to its roots
Simon Chesterman (IHT) Sep 14, 2004
As the United Nations General Assembly opens on Tuesday, the world organization faces twin crises in its effectiveness and its legitimacy.

Politicians' Multiple Trade Personalities Wall Street Journal Subscription Required
Sebastian Mallaby (WSJE) Sep 14, 2004
China isn't a bigger, scarier version of the old Japan.

U.S. trade gap rises, along with debt worries
IHT Sep 14, 2004
The United States posted a record current-account deficit of $166.2 billion in the second quarter, the Commerce Department reported Tuesday, raising new concerns about the country's indebtedness.

An oasis, not a mirage
Economist Sep 14, 2004
The prospects for Japan’s economy and its stockmarket still look rosy.

Self-Help for Basket Cases Wall Street Journal Subscription Required
Holman W. Jenkins Jr. (WSJ) Sep 15, 2004
Protectionism doesn't seem to have helped the airline industry.

The U.N. Dogma Wall Street Journal Subscription Required
WSJE Sep 15, 2004
For multilateralists, the U.N. is bigger than the sum of its parts.

Asia and Protectionism Wall Street Journal Subscription Required
AWSJ Sep 15, 2004
If Mr. Bush abandons his principles in the final stages, it might lose more votes than it will win.

Currencies: Quarterly Forecast Update - Looking for a Stronger USD
Stephen L Jen (MSDW) Sep 15, 2004
The dollar is likely to surprise most investors. We have just completed our quarterly forecast revision and reaffirm our out-of-consensus structural USD view. The dominant view in the market remains overwhelmingly USD bearish short- and medium-term, but we believe the USD index has bottomed, and will gradually reassert itself in the quarters ahead, particularly against GBP, AUD, EUR, and JPY.

WTO Panels Confirm Victory For Brazil In Cotton, Sugar Cases
BRIDGES Weekly Trade News Digest - Vol. 8, Number 30 Sep 15, 2004
On 8 September, the WTO panel hearing Brazil's challenge to US subsidies to upland cotton producers issued its final decision in favour of Brazil on all major claims. On the same date, the panel on Brazil's case against the EC's export subsidies for sugar issued its confidential final ruling to the parties to the case. Here as well Brazil largely won the case.

Experts Debate Links Between Intellectual Property And Human Rights
BRIDGES Weekly Trade News Digest - Vol. 8, Number 30 Sep 15, 2004
On 14 September, a group of intellectual property experts convened in Geneva, Switzerland, to consider the relation between intellectual property and human rights. Discussions at the meeting, which was organised by the civil society group "3D -- Trade, Human Rights, and Equitable Economy", focused on a draft "general comment" on the International Covenant for the Protection of Social, Economic and Cultural Rights, and specifically on Article 15(1)(c) of the Covenant, which highlights "the right of everyone to benefit from the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author".

Can the Developing World Skip Petroleum?
Gretchen Vogel (Science) Sep 16, 2004
If technologies for hydrogen fuel take off, one of the biggest winners could be the developing world.

Foreign Aid in Peril
WP Sep 16, 2004
More than one would have predicted four years ago, the Bush administration has promoted help for developing countries. Having suggested during his campaign that Africa was not a priority, President Bush greatly expanded programs to help poor countries cope with AIDS, and he promised a 50 percent jump in other foreign assistance. However, that second achievement is in danger of being undermined. In a Senate markup yesterday, only $1.12 billion was allocated to Mr. Bush's new aid initiative, less than half of what he requested.

The private monitors of global trade
Tim Bartley (IHT) Sep 17, 2004
Chances are that your favorite cafe sells coffee in bags labeled, "Fair Trade." Or perhaps your new window frames carry an "FSC" logo, a stamp of approval from the Forest Stewardship Council. Behind these labels is a relatively new chapter in the story of globalization.

Taxing Global Profits
NYT Sep 17, 2004
A study showing that American companies booked $149 billion of profits in tax-haven countries is further evidence that the tax structure is in need of repair.

Global: Productivity Endgame?
Stephen Roach (MSDW) Sep 17, 2004
Long ago -- way back in the late 1980s -- no one really cared about productivity. Now, of course, the world has come full circle in realizing that productivity is the Holy Grail of any economy. It not only plays a critical role in shaping business profitability, inflation, and interest rates, but it is key to competitiveness and real wages -- important building blocks of any nation’s standard of living. Rapid productivity growth and high-performance economies go hand in hand. Low productivity growth, by contrast, has a corrosive impact on economic performance. As everyone also knows, America is riding the crest of eight years of spectacular productivity growth -- an outcome that most believe has now become a permanent feature of the US economic landscape. Yet behind the scenes lurk some disquieting signs on the productivity front. Could it be that the days of rapid productivity growth in the US economy are finally nearing an end?

OPEC meeting: OPEC’s liquidity trap
Economist Sep 17, 2004
At its meeting in Vienna, OPEC, the oil-exporters’ cartel, has raised its production quotas by 1m barrels per day. But oil will flow no more freely than before.

Experts disagree on Bush trade enforcement record
Doug Palmer (Reuters) Sep 17, 2004
Democratic presidential candidate John Kerry has criticized President George W. Bush for not aggressively enforcing trade agreements, but experts disagree on whether the White House could have done a better job.

Trading Up
Bob Kerrey (NYT) Sep 19, 2004
There is one issue that John Kerry would do well to bring up, an issue that has received little attention this political season: trade.

Export Tax Follies Wall Street Journal Subscription Required
WSJ Sep 20, 2004
There's one problem Congress could fix before adjourning.

Democracy in Trouble
WP Sep 20, 2004
Ten years ago democracy was on the march, and its progress seemed more or less inevitable. Political freedom was assumed to expand with economic prosperity, and international relations were expected to grow smoother as the number of democratic nations swelled.

Global: When Politics Matter
Stephen Roach (MSDW) Sep 20, 2004
The state of the economy has always played an important role in shaping the outcome of US presidential elections. Twelve years ago, Bill Clinton’s campaign mantra, “the economy, stupid,” focused the debate on economic issues as never before. But history is replete with many other examples when economics emerged as a critical swing factor in America’s presidential sweepstakes. Does that history offer any clues for the outcome of Campaign 2004? Conversely, does the political cycle hint at what to expect in the economy over the next four years?

Currencies: From Currency Stability Back to Currency Flexibility?
Stephen L Jen (MSDW) Sep 20, 2004
Since the Boca Raton G7 Finance Ministers meeting in February, the market has not focused on currency policies in the key economies (the US, China, Euroland, and Japan — here referred to as ‘G4’). The main reason is that the G4 have said very little about currency markets, in turn a reflection of them being relatively comfortable with recent ranges. However, as the global economy downshifts, it is likely that G4 currency policies will grab investors’ attention again. My view is that the temptation to opt for a weaker currency bias will rise in the US, but Asia is likely to remain ‘pegged’ to the USD. The ECB’s strong-EUR bias may be countered by European finance ministries. The net outcome of these divergent G4 views is likely to be messy. I believe a general endorsement for a weak USD is not possible.

Fed's Increase Won't Cause Many Global Problems
John M. Berry (Bloomberg) Sep 20, 2004
When Federal Reserve officials meet tomorrow and raise their target for the overnight lending rate, as they undoubtedly will, they can do so without worrying very much that higher rates will cause significant problems for the U.S. financial system -- or indeed the rest of the world.

A Reality Check on the Global `747 Economy' Recommended!
William Pesek Jr. (Bloomberg) Sep 20, 2004
Eleven months ago, Joseph Quinlan of Banc of America Capital Management came up with a clever way to view the global economy: as a 747 jet plane.

Economy gathers steam again: Bad news Recommended!
AT Sep 20, 2004
While the highest levels of China's government gathered over the weekend to witness a crucial leadership transfer, everybody - from the country's economic mandarins to traders on Wall Street - was asking the multibillion-dollar question: Is the overheated economy on track for a soft landing, or could the government's attempts to rein in rocketing growth be propelling it straight into the ground?

Turkey registers strong recovery Adobe Acrobat Required
IMF Survey Sep 20, 2004
Plus: Interview with Takatoshi Kato; Making IMF surveillance more effective; Addressing demographic shifts; Global Financial Stability Report; De Rato continues listening tour; Preview of Annual Meetings.

`Comrade' Faber Says China Will Save the Dollar
Andy Mukherjee (Bloomberg) Sep 21, 2004
Marc Faber, the Hong Kong-based asset manager who cheerfully wears such gloomy monikers as ``Dr. Doom'' and ``the bear's bear,'' used an unusual ploy to make his point at CLSA Ltd.'s annual investor forum last week.

New EU members join the outsourcing race Financial Times Subscription Required
FT Sep 21, 2004
Countries in central and eastern Europe are trying to catch up with India as providers of back-office and service staff for multinationals. For western European companies there is a chance to boost competitiveness.

The US as benevolent hegemon
Eric Koo (AT) Sep 22, 2004
By classic criteria, the United States since the collapse of the Soviet Union has fit the definition of global hegemon. Until recently, it has played its hegemonic role to the general benefit of the states under its umbrella, and with the general approval of the world community. Since March 2003, however, its status as "benevolent hegemon" has been less obvious.

TRIPS Council: Key Developing Countries Seek To Move Debate Forward On Disclosure Issues
BRIDGES Weekly Trade News Digest - Vol. 8, Number 31 Sep 22, 2004
Meeting on 21 September, the Council for Trade-related Aspects of Intellectual Property Rights (TRIPS) considered a proposal by Brazil, India, Pakistan, Peru, Thailand, and Venezuela to advance discussions on the relationship between the TRIPS Agreement and biodiversity issues and traditional knowledge. The meeting was the first TRIPS Council held after the WTO agreed on a "July package" to move the Doha Round forward. The TRIPS Agreement was only briefly mentioned in the July package -- with Members reaffirming their commitment to progress in line with the Doha mandate -- with the focus of the package on other areas of the Doha Round, such as agriculture. Discussions at the TRIPS Council therefore continued where they had left off at the previous session of the Council in June. Members remained locked in their positions, so no substantive progress was made and the meeting closed after one day rather than the scheduled two.

EC's Lamy Advocates Value-based Trade Relations
BRIDGES Weekly Trade News Digest - Vol. 8, Number 31 Sep 22, 2004
In a speech delivered in Brussels on 15 September, European Trade Commissioner Pascal Lamy presented a case for consideration of so-called 'collective preferences' in trade relations. The speech was entitled 'The emergence of collective preferences in international trade: implications for regulating globalisation'. Collective preferences are the end result of choices made by communities that apply to the community as a whole (in short, values). Amongst other issues, the speech offered reasoning behind the EC's positions in areas such as clarifying the relationship between WTO rules and multilateral environmental agreements and advocating sustainability impact assessments of trade agreements. Notably, Lamy forwarded the idea of a special safeguard clause to clarify how collective preferences might be integrated into WTO rules. The aim in taking such an approach in trade, Lamy said, is to make the most of greater openness through trade liberalisation while ensuring that it does not threaten to override domestic policy choices.

US To Rejoin The International Coffee Organisation
BRIDGES Weekly Trade News Digest - Vol. 8, Number 31 Sep 22, 2004
On 15 September the US government formally announced its intention to rejoin the International Coffee Organisation (ICO), the intergovernmental organisation responsible for the global coffee industry. Although the US was one of the founding members of the organisation in 1963, it left in the early 1990s following the breakdown of the ICO's quota system. US Assistant Secretary of State for Economic and Business Affairs Anthony Wayne made the announcement at a special event that included members of the ICO, including its Executive Director Nestor Osorio as well as representatives from USAID and the National Coffee Association of the US.

Germany's two halves diverge Financial Times Subscription Required
FT Sep 23, 2004
The border that separated two countries is long gone but starkly different economic performance and political affiliations show the divisions that persist.

The rising ambition of a declining power
Gunther HellmannZ (IHT) Sep 23, 2004
For Germany, the opening of the UN General Assembly this week also marks the end of Germany's two-year stint on the UN Security Council. Joining the back-benchers will be especially hard for Germany's UN representative, Gunter Pleuger, who has been spearheading Germany's effort to return to the table of great-power politics over the past two years of UN crisis management over Iraq.

The U.N.? Who cares?
Victor Davis Hanson (WSJ) Sep 23, 2004
Kofi Annan & Co. might as well move to Brussels or Geneva.

Dollars for Dictators Wall Street Journal Subscription Required
WSJ Sep 23, 2004
More IMF "paper gold" for Iran, Zimbabwe, Syria.

WTO a mixed blessing for Cambodia
AT Sep 23, 2004
Cambodia's entry into the World Trade Organization next week will test the ground on whether the world's poorest countries would be better or worse off by becoming new members of the global free trade body. Despite the economic benefits, tougher new requirements will weigh heavily on the nation.

EU looking into Greek debt figures
IHT Sep 24, 2004
The commission said that it might take action against Greece but added that its membership in the euro zone was not in doubt.

East Asian economies: This is not America
Economist Sep 24, 2004
As the Federal Reserve continues to tighten America’s monetary policy, will central banks in East Asia follow suit?

Global: Searching for Growth
Stephen Roach (MSDW) Sep 24, 2004
Financial markets are telling us that the search for growth is getting tough again. At least, that’s the message I take from another significant downleg in global bond yields and renewed selling pressure in equity markets. My own travels corroborate that inference. I was in Europe a couple of weeks ago, where the growth outlook remains so dour that many Europeans are now getting excited about a reacceleration back to 2% growth. And now I am back in the Asia-Pacific region for the first time in four months, where concerns are mounting over growth prospects for 2005. With an unbalanced world lacking in a broad base of support, it doesn’t take much to trigger a global growth alert.

Global: Taking Cues from Equities
Rebecca McCaughrin and Sharon Yeshaya (MSDW) Sep 24, 2004
Asian equity markets have been a key beneficiary of the easy-liquidity conditions over the last two years, as foreign investors moved out along the risk spectrum in search of higher returns in the region. The exuberance, however, cooled sharply beginning with the inflation scare in May 2004. Although in the last few weeks a few economies have again begun to show a resumption in inflows, our sense is that without a return to the elevated levels seen in 2003 and early 2004, equity flows will be less of a factor for USD/Asia currencies.

Commission approves €8 million to further facilitate the implementation of the Free Trade Agreement
EU DGT Sep 24, 2004
The European Commission has approved a project to facilitate and support the implementation of the EU-Mexico Free Trade Agreement In force since July 2000. The project, which has total budget of €16 million, will receive EU funding of €8 million and will be co-funded in equal part by the Mexican government.

World economy 'in good health'
BBC Sep 26, 2004
The head of the International Monetary Fund says the world economy is at its strongest point for five years.

The Secret Trade Courts
NYT Sep 27, 2004
The arbitration process that settles many international trade disputes favors corporations over poor countries, and must be made fairer.

The World Bank's Force of Nature Recommended!
Sebastian Mallaby (WP) Sep 27, 2004
The Kerry-Bush face-off is a global election, handicapped and gossiped about from Tokyo to Trieste. But there's another global contest brewing, a little off the radar screen. It is a contest that features Colin Powell and Bill Clinton. It is a contest that could influence the global agenda. It is the contest to become the next president of the World Bank -- and master of some $20 billion in loans each year to the world's poorest countries.

Exchange rate flexibility is in Asia's interest | Alternative Financial Times Subscription Required
Raghuram Rajan and Arvind Subramanian (FT) Sep 27, 2004
The argument that global current account imbalances reflect a conscious and stable arrangement between surplus and deficit countries does not hold up under scrutiny.

The Dragon invests in the world
AT Sep 27, 2004
Nearly 3,500 Chinese enterprises had invested US$33.2 billion directly overseas by the end of 2003. The investment was scattered across 139 countries and regions, covering 60% of the globe. And prospects are brighter for 2004.

Global: Collision Course
Stephen Roach (MSDW) Sep 27, 2004
The world economy is on a collision course. The United States -- long the main engine of global growth and finance -- has squandered its domestic saving and is now drawing freely on the rest of the world’s saving pool. East Asian central banks -- especially those in Japan and China -- have become America’s financiers of last resort. But in doing so, they are subjecting their own economies to mounting strains and increasingly serious risk. Breaking points are always tough to pinpoint with any precision. Most serious students of international finance know that these trends are unsustainable. But like any trend that has gone to excess, a group of “new paradigmers” has emerged with a compelling argument as to why these imbalances can persist in perpetuity. That is usually the sign that the denial is about to crack -- possibly sooner rather than later.

Currencies: Pondering the Fate of the Chinese RMB
Stephen L Jen (MSDW) Sep 27, 2004
A move toward greater RMB flexibility is a matter of time. I attach a 0% probability to RMB revaluation, but a close to 100% probability that the next RMB regime will NOT be another peg but a more flexible framework. In my view, the most likely new RMB regime is a ‘crawling band’. In terms of likely timing, China will move when it is ready. In my view, it is possible that China dismantles the peg some time in 2005. Third, as regards the likely USD/RMB trajectory, my own guess is that, beyond an initial knee-jerk response, a downtrend in USD/RMB is far from certain. The next regime to replace the current de facto USD peg. As early as 2001, the PBOC declared its intention to eventually move toward a more flexible currency regime. Eventually, China will need to assert monetary independence, which necessarily implies dismantling the peg, at any parity.

Oil flirts with 50 a barrel before retreating
IHT/AP Sep 28, 2004
Crude oil topped US$50 per barrel during Asian trading on Tuesday — pushing past the psychological milestone for the first time then surging further to new record levels likely to unsettle consuming nations.

JP Hedgie Wall Street Journal Subscription Required
Andy Kessler (WSJ) Sep 28, 2004
JP Morgan is buying its way into the wild hedge-fund circus.

How hedge funds are destabilising the markets Financial Times Subscription Required
Paul Wooley (FT) Sep 28, 2004
We are moving towards a highly polarised structure in which the behaviour of the few is shaping markets for the many.

It Is Time for a New Economic Stance on China
Marcus Noland (IIE/FT) Sep 29, 2004
Rather than reviving the economic diplomacy of the 1980s, the next administration should push for a one-time renminbi revaluation of perhaps 15 to 25 percent under China's existing exchange rate management system. From the Chinese perspective the revaluation would contribute to the cooling of the Chinese economy and would discourage additional speculative inflows that are affecting China's already shaky banking system. However, unlike the current Bush policy, a step revaluation would give China time to stabilize its banking system before subjecting it to the vagaries of the international capital market. A step revaluation could also facilitate a more general realignment of Asian exchange rates, which would be a welcome component of global adjustment, as opposed to the likely short-run depreciation of the renminbi under the current Bush approach.

Oil: Pumping up the oil price
Economist Sep 29, 2004
The oil price has touched $50 per barrel for the first time, not because of terrorism in the Middle East but because of gangsterism in Nigeria. A combination of past under-investment and current political strife has left producers struggling to keep up with demand.

Asia Power -- China Joins Japan at G-7 Table
William Pesek Jr. (Bloomberg) Sep 29, 2004
Upstaging the richest economies is no small feat, and something China is sure to do this weekend when it participates in its first Group of Seven meeting.

A window of opportunity Financial Times Subscription Required
Martin Wolf (FT) Sep 29, 2004
As this month's World Economic Outlook from the International Monetary Fund makes plain, demographic forces will drive the world economy in the decades ahead.

WTO Members Gear Up For Renewed Agriculture Negotiations
BRIDGES Weekly Trade News Digest - Vol. 8, Number 32 Sep 29, 2004
On 24 September, delegates to the WTO met informally to discuss the way forward in agriculture negotiations. The meeting was the first to follow a Framework Agreement reached at the end of July that effectively salvaged the Doha negotiations. The discussions on the agriculture section of the "August Decision" had been particularly sensitive. After the intense negotiations in late July, the Geneva process is expected to pick up only slowly. The initial work will be based on a list of technical issues compiled by Tim Groser, who chairs the Committee on Agriculture (CoA) special (negotiating) session.

Countries Consider Adjustment Costs Of Textile Quota Phase-Out
BRIDGES Weekly Trade News Digest - Vol. 8, Number 32 Sep 29, 2004
Countries are positioning themselves in advance of a 1 October meeting of the WTO Council for Trade in Goods, where Members will address the issue of phase-out of import quotas for textiles scheduled for 1 January 2005. WTO Members whose economies may not be able to compete with volume textile producers such as China and India want the WTO to discuss solutions. Meanwhile, China is signalling that other countries should refrain from barring access to its expected increase in textile exports in 2005. At a meeting on 28 September, US textile industry officials met with representatives from thirteen countries that support some action to prevent larger developing countries such as China and India from dominating the world textile and clothing market in 2005. Those countries -- which included Mexico, Tunisia, Jordan, Sri Lanka, Bangladesh, Turkey, Peru, Italy, Germany, Portugal, Indonesia, Madagascar and Great Britain -- were "unified in that we need a solution to this problem," said Auggie Tantillo, executive director of American Manufacturing Trade Action Committee. "They are now willing to take this issue forcefully to the WTO and to demand that the WTO address it and come up with a structure for a finding a solution". At least one WTO Member may propose to extend the 1 January 2005 deadline for quota elimination, but Cass Johnson, president of the US National Council of Textile Organizations, said US industry groups do not expect the Goods Council to support that call.

Asian economies band together to win back global investors
ST Sep 30, 2004
Asean officials update investors at event in New York on the region's economic transformation since the financial crisis.

Global: Putting the World to Rights Again
Stephen Roach (MSDW) Sep 30, 2004
Bill Gross, chief investment officer at Pimco, and Stephen Roach, chief economist at Morgan Stanley, are two of the most prominent thinkers on the state of the global economy. Over the summer, they swapped their thoughts on the price of oil, the US current account deficit, and the future of China, among other topics, exclusively for Financial News.

Taking the Pulse of a Global Membership Adobe Acrobat Required
IMF Survey Supplement Sep 30, 2004
Plus: Ten Events That Shaped the IMF; Running the IMF; Country Representation and Votes on IMF Executive Board; Promoting Healthy Economies; Helping When Things Go Wrong; Getting Back on Track; How the IMF Lends: Terms and Conditions of Financial Facilities; Passing On Know-How; Striving for a Better Life in Poor Countries; Pushing for Change at the IMF; IMF at a Glance; Organizational Diagram of the IMF

Home | Economics | Business & Finance | Politics | Law | ICT | Development | News | Research