Bretton Woods Update
Bretton Woods Update Issue No 31 Nov/Dec 2002
Real impact of new poverty analysis uncertain; Short gives evidence on World Bank to UK parliamentarians; Fund threatens Brazilian democracy; Bank on trade: will the real World Bank please stand up?; Inside the institutions: Bank trade map; No pain, no gain: WDR 2004 on services; and Conditionality through the back door?
Toughest on the Poor: America's Flawed Tariff System
Edward Gresser (Foreign Affairs) Nov/Dec 2002
The Bush administration’s decision last March to impose tariffs of 8-30 percent on steel has been called everything from hypocrisy and stupidity to Machiavellian political brilliance. The reaction has been a remarkable demonstration of the strength of free-trade opinion in the United States -- but it has also been a bit puzzling.
Governing the Internet: Engaging Government, Business, and Nonprofits
Zoe Baird (Foreign Affairs) Nov/Dec 2002
The rapid growth of the Internet has led to a worldwide crisis of governance. In the early years of Internet development, the prevailing view was that government should stay out of Internet governance; market forces and self-regulation would suffice to create order and enforce standards of behavior. But this view has proven inadequate as the Internet has become mainstream. A reliance on markets and self-policing has failed to address adequately the important interests of Internet users such as privacy protection, security, and access to diverse content. And as the number of users has grown worldwide, so have calls for protection of these important public and consumer interests. It is time we accept this emerging reality and recognize the need for a significant role for government on key Internet policy issues.
The Future of AIDS
Nicholas Eberstadt (Foreign Affairs) Nov/Dec 2002
HIV/AIDS is a disease at once amazingly virulent and shockingly new. Only a generation ago, it lay undetected. Yet in the past two decades, by the reckoning of the Joint UN Programme on HIV/AIDS (UNAIDS), about 65 million people have contracted the illness, and perhaps 25 million of them have already died. The affliction is almost invariably lethal: scientists do not consider a cure to be even on the horizon. For now, it looks as if AIDS could end up as the coming century's top infectious killer.
A Renaissance for U.S. Trade Policy?
C. Fred Bergsten (Foreign Affairs) Nov/Dec 2002
U.S. trade policy has been facing widespread criticism around the world. Under threat of congressional action, the Bush administration initiated an investigation of steel imports, imposed tariffs of up to 30 percent on a sizable portion of foreign steel shipments to the United States, and launched an effort to organize global steel production -- all within the past year. The administration and Congress have agreed to roll back some apparel imports from the Caribbean and Central America. Sharp new tariffs have been slapped on lumber imports from Canada, a nation with which the United States supposedly has free trade. Both Congress and the president have backed a new farm bill that perpetuates substantial subsidies for U.S. agriculture, even though the United States has railed for years against such practices abroad. All these steps have reinforced the concern that America is pursuing a unilateralist rather than a globally cooperative foreign policy.
Supachai warns against going to Cancun with "overloaded agenda"
WTO Focus No. 58 Dec 2002
Supachai warns against going to Cancun with "overloaded agenda"; Overview of the Trading Environment; recent speeches; and more.
Think Tanks: Who's Hot and Who's Not II
Adam Posen (TIE) Fall 2002
Independent public policy research institutions, aka "Think Tanks", are major contributors to the policy debate in the US and worldwide.
A chance to bring real relief to the poor
Adam Lerrick (FT) Dec 2, 2002
George W. Bush has a fighting chance to prove that overseas aid can work.
Europe's fragile dream of a single financial market
FT Dec 3, 2002
European leaders invested heavily in building a single capital market to rival the US. But the plan has met opposition from vested interests.
Talk of a rate cut bolsters the euro
IHT Dec 5, 2002
With the European Central Bank poised to cut interest rates Thursday for the first time in more than a year, the euro surged Wednesday even as new signs of economic weakness emerged in the single-currency zone.
A competitive approach to free trade
Fred Bergsten (FT) Dec 5, 2002
There is no definitive answer to the debate over multilateral trade liberalisation.
China Is Using Its New Economic Weight to Outmaneuver Japan
NYT Dec 6, 2002
Backed by an economy four times the size of China's, Japan still doles out foreign aid to its enormous — and thriving — neighbor. But to judge by China's recent slights and snubs of Japan, a visitor might think that China is already the economic power of Asia.
Reforming the IMF: Progress Since Prague 2000
IMF Dec , 2002
The IMF has been engaged in a process of reform over the past several years. The changes are to a large extent motivated by the need to adapt to the challenges of the global economy. This issues brief looks specifically at what has been achieved over the past two years. It takes as its point of departure the speech made by Managing Director Horst Köhler to the IMF Board of Governors at the IMF-World Bank Annual Meetings that were held in Prague in September 2000. In his speech, Köhler took stock of what had been achieved so far, and outlined six areas where further change was needed.
Digital Robber Barons?
Paul Krugman (NYT) Dec 6, 2002
When it comes to the future of the Internet, decision makers are full of enthusiasm for the wonders of deregulation even as tomorrow's robber barons are fortifying their castles.
Asean Misses the Boat
AWSJ Dec 6, 2002
China will leave the region little choice but to embrace free trade.
The big winner in the EU expansion: Washington
IHT Dec 9, 2002
The European Union's coming enlargement to 25 members seems sure to increase the United States' overall influence in Europe and within the EU - while putting aside for the time being the idea of an emergent Germany leading the continent from Berlin.
EU tables plan to strengthen Special and Differential Treatment of Developing Countries in the WTO
EU DGT Dec 9, 2002
On December 4th, the European Union tabled a proposal aimed at strengthening the Special and Differential Treatment (SDT) enjoyed by Developing Countries, in particular Least Developed Countries, under WTO Agreements. The EU proposes a package of concrete measures, to be adopted by the end of the year, a key one being the adoption of a streamlined and simplified procedure for accession of poorest countries to the WTO. The proposals aim at fully integrating developing countries into the world trading system.
eTForecasts: Global Net population on the rise
Nua Dec 10, 2002
The number of worldwide Internet users will surpass 665 million by the end of 2002, according to eTForecasts.
Sovereign Debt Restructuring Mechanism - One Year Later
Anne O. Krueger (IMF) Dec 10, 2002
Thank you for this opportunity to discuss the IMF's proposal for a sovereign debt restructuring mechanism (SDRM). The proposal, initially presented a year ago, has stimulated a number of interesting reactions. I was pleased to find evidence of support for a statutory approach—which the SDRM is—from an association representing foreign bondholders.
The high cost of resisting the euro
FT Dec 10, 2002
Monetary union is helping to drive a restructuring of the eurozone economy, making it more competitive, writes Philippe Legrain, chief economist of Britain in Europe.
America can afford a stronger dollar
FT Dec 11, 2002
The policy is needed to help the global economy to return to its trend growth potential, argues Ashraf Laidi, chief currency analyst for MG Financial.
China's Slow Pace of Change
Chi Lo (AWSJ) Dec 11, 2002
Despite WTO membership, Beijing's bureaucracy continues to obstruct trade.
East Asians need a deal on exchange rates
Philip Bowring (IHT) Dec 11, 2002
The current source of greatest tension in East Asia is not North Korean weapons or El Qaada plots. It is currency values. The arrival of a new U.S. Treasury secretary could bring these to a head - but could also provide for their resolution in the same way that the 1985 Plaza accord was made possible by Donald Regan's replacement by James Baker.
The Internet and the law
Economist Dec 11, 2002
Media companies around the world are alarmed by a high-court ruling in Australia.
The goal becomes Muslim democracy
Richard N. Haass (IHT) Dec 11, 2002
The Arab Human Development Report, written on behalf of the UN Development Program and the Arab Fund for Economic and Social Development, portrays an Arab world that is lagging behind other regions in individual freedom, women's empowerment and economic and social development.
World Bank warns on 2003 growth
FT Dec 12, 2002
The World Bank has sharply cut its outlook for the world economy and warned that jittery financial markets could cut Latin America off from global prosperity.
Chile clinches US trade deal
FT Dec 12, 2002
The US and Chile announced a comprehensive free trade agreement, ending nearly a decade of efforts by Santiago to lock-in access to the world's largest market.
A devalued discipline
Gerard Baker (FT) Dec 12, 2002
When the American president fires his economic team and appoints a new one it ought to be a seismic moment for global economic policy.
Enlargement Is an Economic Win-Win
Daniel Gros (WSJE) Dec 12, 2002
Formerly Communist Eastern Europe rejoins the fold.
World Trade Organization: Could Try Harder
FEER Dec 12, 2002
One year after it joined the WTO, China gets mixed - though overall fairly positive - report cards. The economy is opening, but it won't be smooth, and much more needs to be done.
'Development' Round In The Balance At WTO General Council, TNC Meetings
BRIDGES Weekly Trade News Digest - Vol. 6, Number 42 Dec 12, 2002
As BRIDGES Weekly went to press, the WTO General Council was in session for its final meeting of 2002, and had addressed over half of its 26- item agenda over 10-11 December. While progress was made on some smaller issues, such as accessions, the body remained stuck over major issues of concern to developing countries, notably intellectual property rights and access to medicines, special and differential treatment (S&D), and implementation concerns. Members remain divided over these contentious areas for which decisions are due by the end of the year (see related stories, this issue). General Council Chair Sergio Marchi (Canada) indicated that the body could continue meeting into the weekend in an attempt to reach agreement, with a potential resumption on 18 and 20 December. The General Council is convening one week after a meeting of the Trade Negotiations Committee (TNC) on 4-6 December, which took stock of negotiations in the various WTO bodies and which also encountered roadblocks over similar issues, particularly on implementation concerns of developing countries.
TRIPs And Health Still Blocked As Deadline Nears
BRIDGES Weekly Trade News Digest - Vol. 6, Number 42 Dec 12, 2002
Negotiations on paragraph 6 of the Doha Declaration on the TRIPs Agreement and Public Health are continuing at a snail's pace, with little willingness on all sides to move on the key outstanding issues. While the importance of these negotiations for the so-called "Doha Development Agenda" are generally acknowledged, some observers are starting to question whether it would be in developing countries' best interest to settle on a weak deal by the end of the year or rather continue the negotiations into 2003.
Nearing Deadline Again, S&D Review Still Searching For Consensus
BRIDGES Weekly Trade News Digest - Vol. 6, Number 42 Dec 12, 2002
After a gruelling ten months of meeting in special sessions as part of its mandated review of special and differential treatment (S&D) provisions, the WTO's Committee on Trade and Development (CTD) met on 2-3 December to consider the first draft of a report that must be submitted to the WTO General Council by 31 December. While Members expected the draft to be circulated on 29 November, difficulties in reconciling the divergent positions postponed its release until 3 December. Despite this delay, the draft did not make "clear recommendations for action" -- as mandated in the Doha Decision on Implementation -- but rather gave three options for moving forward, indicating the inability of Members to find consensus on the issue. As a result, Chair Ransford Smith (Jamaica) was forced to request a postponement of this item to the end of the final General Council session of the year (10-14 December, see related article this issue) to continue consultations, in hopes of finding a solution. As BRIDGES Weekly went to press, Members were still considering an 11 December Chair's draft decision.
John Rawls and the Politics of Social Justice
Clive Crook (Atlantic) Dec 12, 2002
Social reformers such as Rawls are in a tradition that emphasizes the best over the possible.
Europe's chance to lead on trade
FT Dec 13, 2002
The EU should prove that European countries share a belief in open markets, says Michael Garrett, executive vice-president of Nestlé for Asia.
Don't Blame the Euro
Johan Van Overtveldt (WSJE) Dec 13, 2002
Monetary policy isn't what's hurting the common currency.
European Union Acts to Admit 10 Nations
NYT Dec 14, 2002
The European Union redrew its map on Friday, pushing its border eastward to add 10 nations, most of them poor former Communist countries.
Strengthening the Framework for the Global Economy
Horst Köhler (IMF) Dec 15, 2002
The global economy is currently in a state of heightened uncertainty. While our baseline assumption remains that we can expect a recovery in the coming months, it will be slower than was hoped for just a few weeks ago, and there is a risk of further setbacks. We should, however, not forget that the world economy has demonstrated remarkable resilience in the face of a series of massive shocks—such as the bursting of the stock market bubble in 2000, the terrorist attacks on September 11, 2001, and the corporate scandals in the United States this year. Furthermore, I consider that the U.S. economy remains fundamentally strong. It has experienced a lasting improvement in productivity and is more flexible than any other comparable economy. And perhaps the most important reason for my optimism is that new technologies and people's desire to improve their standard of living worldwide are sources of growth that are still far from being exhausted.
Let the Trade in Waste Continue
Prasanna Srinivasan (AWSJ) Dec 16, 2002
Halting the trade in refuse will harm the people it is intended to help.
Foreign banks fleeing uncertainty in Brazil
IHT Dec 16, 2002
As Brazil struggles with a sluggish economy and uncertainty over the policies of a new president with leftist roots, many bankers are looking for work.
IMF Survey
IMF Dec 16, 2002
Köhler on Brazil & Chile; Global Financial Stability Report; new IMF liquidity measure; Boughton on IMF conditionality guidelines; Turkey negotiations; globalization & Africa; social safety nets; annuitizing pension payouts; Abed & Gupta on corruption.
EU gets a 'bargain' in expanding east
IHT Dec 17, 2002
The EU said that the admission of 10 countries would cost E40 billion for the first three years but the net cost of expansion is actually one quarter that amount.
Japan to act against fluctuations of the yen
FT Dec 17, 2002
A senior official has warned that Japan would take decisive action against rapid fluctuations of the yen, reflecting concern that economic recovery is being stifled.
Chile hails trade deal as finest moment
FT Dec 17, 2002
Chile and the US have agreed a broad bilateral agreement which has been hailed in Santiago as the finest moment in more than a decade of aggressive pursuit of trade deals.
Global Economic Prospects: Weak global recovery will slow poverty reduction
WB Dec 17, 2002
A sluggish global economic outlook, with slower growth in the next 12-18 months than previously anticipated, will impede poverty reduction in developing countries, according to a new World Bank report. After exceptionally slow growth in 2001 and 2002, global GDP is expected to rise by 2.5 percent in 2003, higher than the previous two years but still well below the 3.9 percent expansion recorded in 2000, and significantly below long-term potential growth rates. The report: Global Economic Prospects 2003: Investing to Unlock Global Opportunities, outlines steps that rich countries and developing countries can take to raise the quantity and productivity of domestic and foreign investment in developing countries, and thereby accelerate poverty reduction.
A big economic rebound in '03? It may be a long shot
IHT Dec 18, 2002
The global economy will speed up only slightly from the current becalmed levels. Growth rates may not return to the average levels of the last half-century until at least 2004.
In Profits We Trust
Economist Dec , 2002
2002 will be the third consecutive year in which global share prices have fallen. A reason for hope is that companies’ profits are recovering
Protecting drug patents brings real benefits
Stuart Eizenstat (FT) Dec 19, 2002
Strong intellectual property rules are an opportunity for economic growth.
A (Milk) Glass Half Full
Johan F.M. Swinnen (WSJE) Dec 19, 2002
But a CAPs crisis is likely, and the Doha round may end in failure.
WTO and agriculture: European Commission proposes more market opening, less trade distorting support and a radically better deal for developing countries
EU DGT Dec 19, 2002
The Commission presented an ambitious proposal for WTO negotiations on agriculture, calling for improved market opening and reduction of trade distorting support. The key elements in the Commission paper are proposals: to cut import tariffs by 36%, to slash export subsidies by 45%, to reduce trade distorting domestic farm support by more than half (55%) - providing there is fair burden sharing from other developed countries in particular.
China seen a crouching dragon in biotechnology
Nao Nakanishi (CheckBiotech) Dec 19, 2002
Is China a crouching cyborg dragon, ready to spout out new new plant biotechnology and genetically-modified organisms (GMOs) on the World?
The Upside of Argentina's Default
Christopher Westley (Mises Daily) Dec 20, 2002
Assume that a friend makes available to you a generous line of credit to your firm at very agreeable terms: low interest rates, loose repayment requirements, and (nod-nod, wink-wink) the implicit agreement that if you can't make your payments in the future there will be more dough forthcoming. Assume that all of your neighbors have similar agreements with the same friend and seem to be doing fine. All you have to do is sign on the bottom line.
Global: The Levers of Global Growth
Stephen Roach (MSDW) Dec 20, 2002
The global economy remains in the doldrums as 2002 comes to a close. Recovery from the recession of 2001 has been both anemic and uneven. Lacking any new sources of global growth, a US-centric world remains very much a captive of America’s post-bubble shakeout. What might break this vicious circle and spark a more vigorous recovery in the global economy?
Working Party on the Accession of the Russian Federation
WTO Dec 20, 2002
The WTO Working Party on the Accession of the Russian Federation, on 18 December 2002, agreed on an accelerated programme of work during the first half of 2003. The Chairman, Ambassador Kåre Bryn, said this response to the Russian delegation's call for urgency was made on the understanding that “genuine efforts will be made on all sides to engage quickly on the negotiating issues”.
How to Govern (Better) the World Economy
Flemming Larsen (IMF) Dec 20, 2002
It is a daunting challenge to discuss the topic for this session. It is implicit in the title that the world economy somehow is not governed as well as it should, and that there must be a better way to manage economic life on this planet.
WTO Members Still Battling Over TRIPs And Health
BRIDGES Weekly Trade News Digest - Vol. 6, Number 43 Dec 20, 2002
As BRIDGES Weekly went to press, negotiations were still going on in the WTO Council for Trade-related Aspects of Intellectual Property Rights (TRIPs) over paragraph 6 of the Doha Declaration on the TRIPs Agreement and Public Health. While most WTO Members had expressed their willingness to approve the Chair's most recent draft Decision, released on 16 December, on the condition that it was not re-opened, the US rejected the draft, disagreeing in particular with the disease coverage.
Trade and Development Committee Unable To Bridge Gaps on S&D
BRIDGES Weekly Trade News Digest - Vol. 6, Number 43 Dec 20, 2002
After numerous sessions held between 12 and 20 December -- including a marathon session on 19 December with Heads of Delegation -- Members at the Special Session of the WTO's Committee on Trade and Development (CTD) were unable to bridge the gaps that remained on the mandate to strengthen special and differential treatment provisions (S&D).
WTO: Harbinson Circulates 'Overview Paper', EU Presents New Ag Proposal
BRIDGES Weekly Trade News Digest - Vol. 6, Number 43 Dec 20, 2002
On 18 December, Stuart Harbinson, Chair of the negotiating session of the Committee on Agriculture (CoA), circulated a long-awaited 'overview paper' that outlines the current status of negotiations on establishing numeric targets, formulas and other 'modalities' for countries’ commitments by 31 March 2003. The paper was released in accordance with the agreed timeline. In his general observations, included in the 89-page compendium, Harbinson pointed to "substantial progress" on some issues such as tariff quota administration and export credits. He however went on to list six key points relating to outstanding issues, including: significant differences in interpreting the Doha mandate; developing countries' split on special and differential treatment (S&D); and the role of non-trade-concerns (NTCs). The 'overview paper' was released only two days after the EU submitted its modalities proposal for the agriculture negotiations.
Welcome to the amateur century
Charles Leadbeater (FT) Dec 23, 2002
There are limits to what amateurs can achieve.
Supachai disappointed over governments failure to agree on health & development issues
WTO Dec 23, 2002
Director-General Supachai Panitchpakdi, on 20 December 2002, expressed disappointment over the failure by WTO member governments to meet the year-end deadlines for agreement in negotiations on special and differential treatment for developing countries and access to essential medicines for poor countries lacking capacity to manufacture such drugs themselves. “Nonetheless, delegates have informed me of their commitment to continue to work to find agreement in these complex and difficult negotiations”, he said, adding that “I am hopeful a solution can be found in the early part of 2003”.
Global, Currencies: Shifting From Trading to Trending Markets
Stephen Li Jen (MSDW) Dec 23, 2002
In 2003 and into 2004, I believe currency markets will see significantly more volatility. I believe that the US economy has a good chance of establishing a bottom in 2003, and that this will mark a resumption of the US dollar downtrend against the yen, the euro, and emerging market currencies.
Beyond Our Shores
Francis Fukuyama (WSJ) Dec 24, 2002
What is a conservative foreign policy?
Foreign workers face turning tide
IHT Dec 24, 2002
Without the dynamism young immigrants can bring, economists say, Europe will become lopsidedly old and will lose its competitiveness to regions of the world that can absorb outsiders.
The poor have cause to be grumpy
Bimal Ghosh (IHT) Dec 24, 2002
The United States has unveiled a plan to abolish all tariffs on manufactured goods by 2015, urging other countries in the World Trade Organization to do the same. Presented as the culmination of 50 years of strenuous efforts to tear down industrial tariffs in world trade, it aims at sparking new enthusiasm in the faltering Doha round of multilateral trade negotiation.
2002: The year in technology
Will Knight (New Scientist) Dec 25, 2002
The entertainment industry upped its attack on the internet file-sharing in 2002 by introducing new and controversial "copy protection" technologies to prevent computer copying of music and movies.
The Price of Guessing Right
WSJ Dec 27, 2002
Is Soros guilty of anything more than making a profit?
The IMF is Not the Problem
Kenneth Rogoff (IMF) Dec 27, 2002
Throughout much of the world, the IMF is caricatured as a demon of austerity. Wherever the IMF appears on the scene to provide financial assistance, painful government budget cuts seem certain to follow. This image of austerity appeals to the emotional need for stories with villains. After all, good villains sell books—including books about globalization that demonize the IMF.
Economists question Treasury's euro tests
FT Dec 30, 2002
Prominent economists have cast doubt on a central plank of the Treasury's decision-making process that will determine whether the UK is ready to embrace the euro.
The Philosophical Muddle of Soros
Brian M. Carney (WSJE) Dec 30, 2002
The financier is caught in a backlash that he helped create.
The Demise of the Dollar?
Antony P. Mueller (Mises Daily) Dec 30, 2002
Since the early 1980s, the United States has been the major destination for foreign goods on a global scale. With an increasing part of these imports being financed by debt creation, the international monetary system has been swamped with liquidity. A financial bubble has emerged and penetrated each corner of domestic and international financial markets.
Stock markets down third year in row
FT Dec 31, 2002
World stock markets will draw the line under a third consecutive year of losses which, taken together, represent the most severe bear market since the Great Depression.