Brookings: Topics - World Trade Organization

Growing the Global Internet Economy by Ensuring the Free Flow of Data Across Borders

David Dreier and Joshua Meltzer — Thu, 23 May 2013 15:32:00 -0400

Digital connectivity is the most powerful driver of social and economic change the world has seen. The Internet will connect an estimated 5 billion people by 2020. That many already use cell phones. Connectivity is reshaping the landscape we inhabit, changing the ways we communicate, learn and do business. It is behind the world’s most transformative trends, including an unprecedented empowerment of the individual.

The free flow of data is a core element of the Internet that has underpinned this growth in connectivity, innovation and productivity. This freedom has been vital to the growth of digital trade in goods and services, a quickly growing share of global GDP. Its importance is evident every minute as citizens, businesses and governments access global services such as cloud computing, and health and education opportunities. Entrepreneurs in developing countries benefit from free flow as they sell their products globally over the Internet, using international financial data transfers to process transactions. It has also been a critical factor in the explosive growth of access to information and human opportunity.

We are, however, only at the beginning of the digital age. It is hard to grasp the enormity of what this advance portends. More data was created and exchanged last year than in all of human history. The growth in the use and exchange of data is accelerating exponentially--fueling massive new economic activity, enabling major advances in scientific research, analysis of big data, and providing tools to help address existential challenges to human well-being such as climate change.

There are, however, some major speed bumps that threaten this advance as governments around the world are increasingly seeking to restrict or control the flow of data.

No question about it, the Internet is disruptive. That’s why it’s not hard to understand the impulse to control it. But, as with everything, there is a balance to be sought. For example, efforts to prevent cyber crime, or maintain the privacy of personal data should avoid unnecessary restrictions on the free flow of data across borders. Attempts by government to limit data flows to restrict market access or provide unfair commercial advantages to domestic businesses reduces international trade. This is discriminatory and trade-distorting, and should be prohibited.

Many governments are already restricting the free flow of data. These attempts are most blatant in repressive and authoritarian countries, but evident even in open societies. Across the world governments are grappling with how to reconcile the freedom of the Internet with the need to address some of the harms associated with its use.

But as government interference in the free flow of data multiplies, we may be reaching an inflection point that could determine kind of Internet the world ends up with. It could become truly global, open and accessible to all. Or, the Internet could become increasingly balkanized and closed, with a loss of economic and social potential that harms all.

International trade forums are starting to discuss how to find the right balance between the free flow of data and action to address legitimate concerns about harmful use of the Internet. In fact, cross border data flow is quickly emerging as an important 21st century trade issue. It is not adequately regulated under the rules of the World Trade Organization and the Korea-U.S. Free Trade Agreement is the first trade agreement to try to address issues related to cross-border data flows. The issue is also part of negotiations under the Trans-Pacific Partnership and will figure prominently in talks for a projected EU-U.S. trade agreement.

It is vital we get it right in these agreements. To do so we need a deeper and wider understanding of the value and stakes associated with the free flow of data across borders. The Annenberg-Dreier Commission and the Brookings Institution are trying to build that awareness, so vital to the world. We are partnering in a meeting next week—the start of a larger project—that will gather some of the top experts from the Asia Pacific region to examine the interests in play.

The aim of this project is to build greater understanding in this region on the importance of the free flow of data as a driver of international trade, economic growth and innovation. The U.S. has developed a thriving Internet industry with regulation that balances the free flow of data and access to the Internet with the need to protect legitimate interests such as the protection of intellectual property, fighting cyber crime and maintaining the privacy of personal data.

Other countries are also trying to capture the gains from the Internet economy. And while this should be encouraged, doing so with regulation that is discriminatory and restricts access to the Internet will harm trade, impede growth and is will be harmful to all. On the contrary, an open Internet that encourages access to data and fosters competition will deliver the most economic benefits globally.

Developing a common understanding of these challenges and charting a way forward may ultimately be key to global stability, security, and growth—in short, to building the collaboration necessary to sustain a world we’d want to live in.

Authors

Image Source: © Kacper Pempel / Reuters

Mukhisa Kituyi to Head the United Nations Conference on Trade and Development (UNCTAD)

Mwangi S. Kimenyi — Thu, 16 May 2013 11:26:00 -0400

The United Nations Secretary-General Ban Ki-moon has appointed Dr. Mukhisa Kituyi to be the next secretary-general of the United Nations Conference on Trade and Development (UNCTAD). An UNCTAD press release on May 16, 2013 stated that Dr. Kituyi will serve a four-year term beginning September 1, 2013. Dr. Kituyi has held several senior positions including Kenya’s minister of trade from 2003-2008. He is currently a nonresident fellow in the Africa Growth Initiative (AGI) at the Brookings Institution and was a resident scholar in 2011. Dr. Kituyi is well versed in the global trading system and, in the past, was considered a potential candidate to head organizations such as the World Trade Organization (WTO) and UNCTAD, but instead opted to join politics. A dynamic politician and intellectual, Dr. Kituyi is an excellent choice to head UNCTAD.

For AGI, the appointment of Dr. Kituyi is significant not only because he is one of our fellows but also because AGI has been emphasizing the need to increase informed African voices in global governance. We believe that African interests are not effectively represented in major global institutions, and this deficiency has contributed to the broader marginalization of the continent in global affairs. Dr. Kituyi should be an effective voice in representing Africa and other developing countries. And, as I know him, I believe this is one informed voice that the international community is unlikely to ignore.

But it will not be a smooth ride for the new secretary-general; a host of challenges await him in Geneva. First, more than in most global organizations, UNCTAD requires effective management and intellectual leadership. An internal report published last year—the Joint Inspection Unit Report—showed that UNCTAD has been suffering from a lack of effective governance. It is important that Dr. Kituyi focus on raising the bar in terms of professionalism at UNCTAD. This task will require looking into the recruitment and promotion of employees strictly based on merit. Dr. Kituyi will need to carefully evaluate personnel issues and provide the necessary motivation to ensure that the organization delivers on its mandate. Most importantly, he will have to steer the organization towards more transparency, rewarding performance instead of simple loyalty to senior management. The new secretary-general will also need to offer the intellectual leadership necessary to guide the institution through a time of major global economic change and a shifting of economic power to the South. He must therefore lead intellectually in offering alternative ideas to those emerging from traditional development institutions.

An even a more daunting challenge that the new secretary-general will face is to ensure that UNCTAD remains relevant and credible. Over the past few years, questions have been raised as to what should be the institution’s focus. Some have gone to the extent of insisting that UNCTAD should not be involved in macroeconomic and financial areas. But as its name suggests, UNCTAD was created to deal with issues relating to trade and development with a particular emphasis in developing countries. There is no doubt, therefore, that macroeconomics and finance squarely fit in the institution’s mandate. Indeed, UNCTAD used to be the forum where these issues would be negotiated in order to ensure some balance in the global economy. However, since the creation of the WTO, UNCTAD has experienced a progressive erosion of its voice. It will be the responsibility of Dr. Kituyi to reverse this trend so that UNCTAD can play its rightful role in the global economic policy scene. The new secretary-general must also position UNCTAD to better address the imbalance and unfairness in the multilateral trading rules that have shaped globalization. In UNCTAD, it is often the case that developing countries feel bullied by their developed country partners. It will be imperative for Dr. Kituyi to identify the best way to navigate issues that have come to divide developed and developing regions.

The secretary-general must also position UNCTAD so as to assist developing countries in seizing the opportunities presented by the global economy. With all the changes taking place in the world, UNCTAD has to focus on how developing countries can reap the benefits and minimize the negative effects arising from trade and globalization. This focus requires that UNCTAD take on the hard topics that are of particular interest to developing countries, including investment policy, trade in services and commodities—which it has always done—but it should also come out clearly on what path developing countries should follow. Likewise, we are likely to see an acceleration of regional trade arrangements. Most challenging are agreements involving Northern and Southern partners who cannot be considered equal partners when they negotiate. The jurisprudence on the rules governing such agreements is not commonly agreed upon. Hence, there is a need for UNCTAD to demonstrate, based on evidence, how to ensure that balanced development is achievable, especially in respect to North-South agreements.

With an incoming director general at the WTO and Dr. Kituyi at UNCTAD, the global environment offers an opportunity for the two institutions that drive trade and development to establish the missing dialogue. For this to happen, UNCTAD needs to be credible when articulating its voice in this changing global economy. This is the greatest challenge that Dr. Kituyi faces.

Authors

Mwangi S. Kimenyi

Image Source: © Ronen Zvulun / Reuters

Priorities for International Trade: A Conversation with Special Adviser to the Secretary-General Amina Mohammed

Thu, 04 Apr 2013 12:00:00 -0400

Event Information

April 4, 2013
12:00 PM - 1:30 PM EDT

Executive Board Room
The Brookings Institution
1780 Massachusetts Ave., NW
Washington, DC

On April 4, the Africa Growth Initiative (AGI) hosted a private lunch with United Nations Special Adviser to the Secretary-General on Post-2015 Development Planning and candidate for director-general of the World Trade Organization (WTO) Amina Mohammed. The meeting allowed members of the U.S. government, the private sector and policy community to discuss the state of the World Trade Organization and Ambassador Mohammed’s vision on how the organization should move forward.

Much of the conversation centered on the distinction between the multilateral trading system and the 2001 “Doha Round.” Participants agreed that too often these concepts were considered synonymous, and that the stalled Doha round was not an indictment of the enormous success of the modern multilateral trading system. The trading system was deemed to be in good health, but ready for continued improvement and growth. The Doha Round was considered a notable but not insurmountable challenge within that context of success.

One suggestion to better inform rounds of WTO negotiations was the formation of a business advisory council, which would be the first advisory council for WTO leadership and is an idea that has been publicly proposed by Ambassador Mohammed. Some participants thought using such a council to give the private sector a voice on international trade regulation would broaden the stakeholder base and lead to better, more effective and successful policies. Others thought such a council might reflect further bureaucratization with little effect.

Of the many issues discussed, one that arose repeatedly was how to best update the WTO to address new and evolving challenges, such as security, climate change, and energy and resource efficiency. Many participants felt that any future WTO agreements must take these pressing new challenges into account, but others felt this attempt would be either impractical or beyond the proper boundaries of the organization’s mandate. In either case, participants agreed that a new system of negotiating rules must be implemented in order to bolster the WTO’s promise in the future.

Participants also discussed how future WTO policies may influence Africa’s economic growth and development. Some participants suggested that emerging economies derive a smaller payoff from embracing robust international trade than do established ones, and thus an equalizing mechanism should be developed. However, others felt that developing economies ultimately stand to gain more from embracing global trade than they do from resorting to limited or protectionist trade measures. As such, all economies should find it in their own interest to participate in multilateral trade and work with the existing tools for special cases and transitional economies.

View the participant list »

Event Materials

0403_WTO_Participant_List

Will It Be Legal to Download 'Pirated' Music and Movies From Servers in Antigua?

John Villasenor — Mon, 04 Feb 2013 00:00:00 -0500

As a consequence of a long-running dispute over online gaming services, the Caribbean nation of Antigua and Barbuda (commonly known as Antigua) may soon begin providing online access to U.S.-copyrighted movies and music without compensating the owners of those copyrights.

Will it be lawful for consumers in the United States and elsewhere to avail themselves of this content? Not in most places. But, before getting to why, it’s helpful to provide some context.

Back in the 1990s, online sports books and casinos proliferated in Antigua thanks to the growing reach of the Internet and a favorable corporate tax environment. In response, American authorities began invoking statutes such as the Wire Act to prevent offshore gambling providers from accessing the American market. Antigua considered those actions to be in violation of U.S. obligations under the World Trade Organization’s GATS (General Agreement on Trade in Services) treaty, and initiated a WTO dispute settlement proceeding in 2003.

In a series of reports in 2004 and 2005, the WTO generally found in favor of Antigua, and in 2007, a WTO arbitrator pegged the resulting “impairment of benefits” to Antigua at $21 million annually. In principle, this could be remedied by allowing Antigua to suspend its own equivalently valued GATS obligations towards the United States. However, since this was not feasible given the enormous trade asymmetry between the two countries, the WTO allowed Antigua to request authorization to suspend its intellectual property obligations to the United States under a completely different WTO treaty (called TRIPS), up to an annual level of $21 million. Last week, the WTO formally granted Antigua an “authorization to retaliate.”

The island nation is apparently planning to waste no time in doing just that. Harold Lovell, Antigua’s minister of finance, the economy and public administration, wrote in USA Today on February 1 that his country has “reluctantly decided to suspend intellectual property rights protections for American firms and products.” And, in the international trade equivalent of “nice car; sure would be a shame if anything bad happened to it,” Mr. Lovell asked “why should, for example, the U.S. motion picture industry suffer just so the federal government can continue to protect the monopolies of the big American gambling interests?”

Exactly how Antigua plans to tighten the screws on the movie industry and other holders of U.S. copyrights remains to be seen, and it’s still possible that settlement talks will resolve the dispute before Antigua opens the downloading floodgates. But, suppose Antigua does in fact proceed to make U.S.-copyrighted movies and music available at nominal or even no cost to anyone in the world with an Internet connection. Will it be legal to download that content?

Almost certainly not, according to Ariel Lavinbuk, an attorney with the Washington, D.C. law firm of Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP. Mr. Lavinbuk explains that a person in the U.S. who downloads a song or movie from a server in Antigua without authorization from the copyright holder is reproducing that work in violation of U.S. copyright law. “When you download a song, a new, distinct copy is created,” Mr. Lavinbuk says. “And the creation of that copy on a computer in the U.S. without copyright-holder authorization is unlawful in this country, regardless of whether the website providing the content is now considered lawful in Antigua.”

And what about copies downloaded from Antigua to computers in non-U.S. countries? With the exception of Antigua itself, the TRIPS treaty’s intellectual-property obligations of WTO member countries are still in full force. And almost all countries have laws prohibiting unauthorized reproduction of copyrighted content. Thus, just as in the U.S., downloading a song from Antigua without the copyright holder’s consent would generally violate copyright rights.

None of this is likely to give much comfort to the big movie studios and record labels, which have usually (though certainly not always) aimed their enforcement efforts at those who facilitate distribution of pirated content as opposed to those who download it. And, there’s no small irony in seeing these companies scramble to play defense against the same sort of heavy-handed techniques they have been so willing to dole out when it served their interests.

But it’s also important to remember that the copyright system is intended, first and foremost, to protect and incentivize songwriters, recording artists, writers, sculptors, photographers, choreographers, artists, architects, playwrights, and others who create copyrightable works. Whatever one thinks of the biggest corporate copyright owners, it is hard to think of much reason to celebrate when any country, even one with fewer than 100,000 people, declares with WTO backing that it is suspending intellectual property rights protections within its borders for the creative output of millions of Americans.

Authors

John Villasenor

Publication: Forbes

Image Source: © Mike Segar / Reuters

A Trade Policy for President Obama's Second Term

Joshua Meltzer — Fri, 09 Nov 2012 14:18:00 -0500

President Obama's trade policy in his first term included working with Congress to pass free trade agreements with South Korea, Colombia and Panama, continuing negotiations on the Trans-Pacific Partnership and expanding it to include Canada and Mexico. Moreover, Obama set a goal of doubling exports by 2014, established a trade enforcement council and increased WTO dispute settlement to enforce existing international trade laws. He also effectively managed the complex U.S.-China economic relationship, getting China to more effectively protect U.S. intellectual property rights and ending China's so-called indigenous innovation policies. During the next four years the president should build on this progress and develop a comprehensive trade policy that does three things: 1) builds greater cooperation with China 2) pursues comprehensive and high quality free trade agreements; and 3) articulates a vision for moving the WTO Doha Round forward.

The U.S.-China Trade Relationship: The size of U.S.-China trade makes building this bilateral relationship key to achieving Obama's goal of doubling exports and for making progress on broader U.S. goals on an international level. But the size and growing trade deficit - which in 2011 was $295 billion and is on track to be even larger in 2012 - feeds concerns about unfair Chinese business practices and American economic and manufacturing decline, which ultimately makes advancing the economic relationship with China rather difficult.

The challenge for Obama is that the size of trade deficit is unlikely going to change much in the next four years because of China's role in global supply chains as the major assembly point for goods made from components sourced from South East Asia, Europe, the U.S. and Japan. In this light, the U.S.-China trade deficit is the accumulation of declining U.S. trade deficits with countries like Japan, South Korea and Malaysia as businesses in these countries have shifted production to China. This shift to more efficient and cost-effective production conditions has led to significant decreases in the prices of these imported goods to American businesses and consumers.

One way to reduce the bilateral trade deficit would be to address China's undervalued currency. An undervalued renminbi (RMB) has the effect of making Chinese imports cheaper and American exports to China more expensive. Therefore a revaluation would reduce the deficit by increasing U.S. exports to China and reducing imports from China. The dispute about China's undervalued currency has also negatively affected broader U.S. trade goals, such as concluding the WTO Doha Round since the undervalued RMB caused developing country to resist further reductions in tariffs due to concerns about competition from cheap Chinese imports. That said, the net economic impacts of China's undervalued currency for the U.S. are unclear as a lower RMB also leads to cheaper goods for American consumers and businesses. While an appreciating RMB will likely lead businesses to relocate to lower cost countries and thereby reduce the U.S.-China trade deficit, it will not lead to a decrease in the overall U.S. trade deficit.

But reducing these U.S. concerns about the RMB and the trade deficit, other areas for cooperation with China like clean energy should open up. President Obama supports developing green energy in the U.S. and China's 12th Five Year Plan includes ambitious domestic renewable energy goals. These goals could be complimentary with the U.S. specializing in high-end green technologies and services and China manufacturing components like solar photovoltaic cells. A liberalized trading regime in green energy would underpin this outcome, leading to the most efficient allocation of resources and reducing the costs of renewable energy in both countries. But concerns in the U.S. about Chinese subsidies for renewable energy and a U.S. focus on developing green manufacturing capacity has already led to WTO litigation. Both countries should instead use the trading system to support this common goal and build on the recent agreement in APEC to reduce tariffs on a range of environmental goods by expanding the list of environmental goods and addressing other trade barriers affecting green energy goods and services.

Free Trade Agreements: Currently, the Trans-Pacific Partnership is the only significant free trade agreement (FTA) the U.S. is pursuing and completing the negotiations should certainly be a priority for the next Obama administration. The main outstanding issue is whether Japan will join the current negotiations. While Japan's participation would slow down the talks, it would secure Japan's support for the trade and investment rules that the U.S. wants for the Asia-Pacific region and provide economic heft to the TPP. All this would increase the incentive for other countries to join the TPP and create further momentum toward an Asia-Pacific FTA, reinforcing Obama's broader strategic "pivot" towards Asia.

A big potential new FTA is with the EU - the U.S.'s largest bilateral trading partner. Most tariffs between the U.S. and the EU are already low, so improving market access will require addressing so-called behind the border regulatory measures such as on genetically modified organisms, vehicle safety standards and pharmaceutical health and safety laws. Prior experience addressing trade barriers in the Transatlantic Economic Council suggests that making progress on these issues will not be easy. However a U.S.-EU FTA would certainly deliver economic benefits for the U.S. and European Union.

Multilateral Trade: President Obama can be expected to continue to efforts to conclude parts of the WTO Doha Round, focusing on a services agreement, expansion of the international technology agreement and trade facilitation. However, only multilateral trade liberalization will deliver the largest economic benefits for the U.S. and globally, and the U.S. - as the necessary leader and largest beneficiary of the multilateral trading system - should develop a strategy for concluding the WTO Doha Round during the next four years.

Authors

Joshua Meltzer

Publication: Huffington Post

Image Source: © Romeo Ranoco / Reuters

Campaign 2012: The Global Economy and China

Tue, 09 Oct 2012 13:00:00 -0400

Event Information

October 9, 2012
1:00 PM - 2:30 PM EDT

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue NW
Washington, DC 20036

United States-China relations have been at the forefront of domestic and foreign policy discussions throughout this campaign season. Since joining the World Trade Organization in 2001, China’s economy has been established as a major player in the global economy and continues to grow. The country’s rise has significant implications for U.S. trade and defense policies, particularly on contentious issues like the global financial crisis, nuclear proliferation, military operations in nearby waters and air space and intellectual property rights. As both nations face daunting political and economic challenges, how can the next president improve relations with China while ensuring America’s success in the global economy?

On October 9, the Campaign 2012 project at Brookings held a discussion on the global economy and China, the last in a series of forums that have identified and addressed the 12 most critical issues facing the next president. Campaign 2012 Project Director Benjamin Wittes moderated a panel discussion with Brookings experts Kenneth Lieberthal, Jonathan Pollack, Richard Bush, and Joshua Meltzer, who presented recommendations for the next president.

Participants may follow the conversation on Twitter using the hashtag #BIChina.

Download papers from the event:

Establishing Credibility and Trust, by Kenneth G. Lieberthal and Jonathan Pollack
Continue Progress on an Key Trade Relationship, by Joshua Meltzer
Thoughts on China and American Elections, by Richard Bush

Campaign 2012: Twelve Independent Ideas for Improving American Public Policy is an indispensable guide to the key questions facing White House hopefuls in 2012.

Video

Audio

Campaign 2012: The Global Economy and China

Transcript

Uncorrected Transcript (.pdf)

Event Materials

The Future of Trade: A Conversation with World Trade Organization Director-General Pascal Lamy

Mon, 01 Oct 2012 16:15:00 -0400

Event Information

October 1, 2012
4:15 PM - 5:45 PM EDT

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue NW
Washington, DC 20036

On October 1, Global Economy and Development at Brookings hosted the director-general of the World Trade Organization (WTO), Pascal Lamy, for a conversation about the future of international trade. As production and supply become ever more global, the paradigm for trade is shifting rapidly away from mercantilism to "made in the world." The conversation focused on the evolving patterns and methods of trade, global value chains, the rise of non-tariff measures, and recent trends in regionalism in trade.

Pascal Lamy has served as the director-general of the WTO since September 2005. Prior to his appointment, he was the trade commissioner at the European Commission. His civil service career began in the French Inspection Générale des Finances and at the French Treasury. For nine years from the mid-1980s to the mid-1990s, he served as chief of staff for the president of the European Commission, Jacques Delors. Lamy has also worked in the private sector as part of the team to rescue the struggling Crédit Lyonnais, as well as in academia as the president of the European integration-focused think tank “Notre Europe.”

Brookings Managing Director William Antholis provided introductory remarks. Kemal Derviş, vice president and director of Global Economy and Development, moderated the discussion with Director-General Lamy, which included questions from the audience.

You can follow the conversation on this event on Twitter at hashtag #BILamy.

Video

The WTO Ruling on U.S. Country of Origin Labeling (“COOL”)

Joshua Meltzer — Wed, 18 Jul 2012 14:58:00 -0400

Introduction

The WTO dispute on country of origin labeling (“COOL”) requirements for imported livestock is the latest in a series of cases dealing with the Agreement on Technical Barriers to Trade (“TBT Agreement”). The Appellate Body Report was circulated on June 29, 2012. This case pitted U.S. cattlemen against large packers and food processors and raised questions about the significance of country of origin labeling when it comes to integrated and international supply chains. This Insight provides an overview of the key issues addressed by the Panel and the Appellate Body (“AB”).

Read the full piece at asil.org »

Authors

Joshua Meltzer

Publication: American Society of International Law

Image Source: Denis Balibouse / Reuters

Burying the Magnitsky Bill’s Message for Russia

Steven Pifer — Fri, 29 Jun 2012 00:00:00 -0400

Congress appears ready to take long-overdue action to graduate Russia from the provisions of the Jackson-Vanik amendment. At the same time, both the Senate and House seem intent on coupling that with passage of the Magnitsky human-rights bill, which would sanction Russian officials involved in the 2009 death of Sergei Magnitsky in a Moscow prison.

Unfortunately, by linking these measures, Congress will obscure the message that it seeks to send the Russian government. The two measures should be decoupled.

Congress passed the Jackson-Vanik amendment in 1974, denying permanent normal trade relations status to the Soviet Union and other countries that restricted emigration of religious minorities. Congress adopted the legislation primarily to press the Soviet government to allow Soviet Jews the freedom to emigrate, something that the Moscow authorities routinely denied.

This changed after the collapse of the Soviet Union. Russia opened the gates in the early 1990s, and Moscow allowed virtually any Russian Jew to depart. Hundreds of thousands did, mainly for Israel and the United States. While Russia has slid badly backwards on democracy issues since Vladimir Putin first became president in 2000, emigration remains unrestricted.

The Clinton administration found Russia to be in compliance with the Jackson-Vanik amendment in 1994. By the end of the 1990s, Russia merited full graduation. The George W. Bush administration made half-hearted efforts to push Congress to adopt the appropriate legislation in 2002 and 2003, but an ill-timed Russian ban on chicken imports and White House reluctance to engage the president directly with the congressional leadership undercut those attempts.

Congress now has little choice but to act. When Russia enters the World Trade Organization this summer, continued application of Jackson-Vanik would mean that the United States is not according permanent normal trade relations status to Russia. As a result, U.S. companies exporting to Russia would not be able to benefit from World Trade Organization tariffs or dispute-resolution mechanisms. Essentially, Jackson-Vanik would then become a sanction on American business.

Congress should now finally pass the legislation needed to graduate Russia from Jackson-Vanik. However, many in both houses propose to do this only in conjunction with passage of the Magnitsky bill.

Magnitsky, a Russian lawyer, disclosed evidence that Russian officials embezzled some $230 million. Incredibly, those same officials were allowed to investigate and arrest Magnitsky. He spent nearly a year in pre-trial detention before dying in prison when his jailers denied him needed medical treatment.

The Magnitsky bill will sanction Russian officials connected with Magnitsky’s imprisonment and death, and other officials in similar corruption cases. It would deny them visas to the United States and freeze any financial assets that they might have in U.S. banks.

Magnitsky’s treatment was abhorrent. The Russian government has protested vociferously against the bill, which demeans the Russian government. The U.S. government has a sovereign right to decide who it will and will not allow to enter into the United States, and who can and cannot do business in American financial institutions.

But linking Russia’s graduation from Jackson-Vanik to passage of the Magnitsky bill is a mistake.

First, linkage will ensure that Washington gets no political credit for finally doing the right thing on Jackson-Vanik. To be sure, the credit would be modest, given Russian frustration that they have remained under Jackson-Vanik’s sanction for more than a decade after they did what it asked them to do. But better late than never.

Second, linking the Magnitsky bill to Jackson-Vanik graduation will wholly obscure Congress’s message to the Russian government. The Russians will not see the Magnitsky bill as an expression of outrage over how the Russian legal system was shabbily and corruptly manipulated to kill one of its fellow citizens. They will instead see the bill as reflecting what they believe to be a deep-seated anti-Russia sentiment on the Hill: the Americans had to give up Jackson-Vanik, so they came up with another piece of legislation to beat Russia with.

Congress is right to act on the Magnitsky bill. But it should not couple that with Jackson-Vanik graduation for Russia. Linkage only buries the message that Congress seeks to send.

Authors

Steven Pifer

Publication: The Hill

Image Source: Denis Sinyakov / Reuters

The Right Time for China to Liberalize the Renminbi

Eswar Prasad — Mon, 26 Mar 2012 09:48:00 -0400

The Obama administration has raised the stakes in its increasingly tense stand-off with Beijing on trade and currency issues. It has set up a new agency to investigate China’s trade practices and, along with Japan and the European Union, recently initiated a process through the World Trade Organisation to challenge the restrictions that China places on exports of rare earth minerals.

Despite the improving employment picture in the U.S., the economic and political arguments for taking a tougher line against China in an election year are overriding longer-term strategic considerations. With China in the throes of its own leadership transition, the situation is ripe for an escalating trade conflict that could damage the global trade system and wreck the fragile world economic recovery.

There is a simple solution for Beijing to disarm its critics, make progress on its own domestic reforms and show the kind of leadership that would help cement its role as a global economic power.

This is a perfect time for China to move towards a more flexible currency regime by announcing a wider trading band for the renminbi. The benefits of currency flexibility are well recognised, including by its central bank.

The shift in currency regime would help China develop a more independent monetary policy. Its central bank could set interest rates to meet domestic objectives, rather than being constrained by fears it might be swamped by flows of foreign capital responding to differences in interest rates. This would help promote financial sector reforms by allowing the central bank to use interest rates to guide credit allocation. In turn, the reforms would help rebalance growth by boosting domestic consumption.

China has been hesitant about widening the renminbi’s trading band because of the worries over surges of speculative inflows, which would result in severe appreciation pressures on the renminbi. Such forces could be offset by intervening in the foreign exchange market, but it would be at the cost of further complicating domestic monetary policy and adding to its large stockpile of reserves.

But in recent months, pressures for renminbi appreciation have eased, creating an opportunity to make headway on currency policy. China’s strong economy has kept import growth high, yet export growth has slowed as a result of weaknesses in the major advanced economies. Over the past two months, China recorded a small trade deficit, a reversal from the large surpluses of recent years.

As in other emerging markets, the flight to safety as the eurozone debt crisis drags on has diminished capital inflows, resulting in virtually no net accumulation of reserves in the second half of last year.

All signs suggest that markets anticipate little or no appreciation of the renminbi over the next year, an expectation that is unlikely to be drastically altered by a shift to a more flexible currency regime.

These favourable conditions for a shift in policy may not last long. China needs to grab this opportunity before resurgent trade surpluses or capital inflows again induce the renminbi to resume its appreciation.

However, selling the move domestically will be tricky because it could be seen as yielding to external forces. During a time of leadership transition, it will be even more difficult. How can China’s leaders present this change in policy to a very sceptical audience?

There’s a simple answer, one that even the People’s Bank of China recently endorsed in a paper by one of its staffers. A more flexible currency is an important step on the path to an open capital account, as well as stronger and broader financial markets. In other words, this shift would serve China well in the process of making its currency more widely accepted internationally.

The notion of making the renminbi a powerhouse global currency ought to resonate well with nationalistic sentiments and help blunt domestic opposition to currency reform.

Timing is everything in global finance and politics. China has a perfect opportunity to sharpen its macroeconomic policy tools, promote its own balanced economic development, elevate the global stature of its currency and help avert a trade war that nobody wants.

Authors

Eswar Prasad

Publication: Financial Times

Image Source: © Sean Yong / Reuters

Climate Change and Trade – The EU Aviation Directive and the World Trade Organization

Joshua Meltzer — Fri, 09 Mar 2012 14:28:00 -0500

Editor's Note: This article is published in the Journal of International Economic Law, Volume 15, Issue 1, March 2012.

ABSTRACT

With limited progress in the UN climate change negotiations, the EU has been looking at ways to further reduce global CO2 emissions by extending the scope of its cap and trade system, most recently by including flights entering and leaving EU airspace. With the EU Aviation Directive entering into force on 1 January 2012, all airlines will need to hold permits to cover their CO2 emissions for flights operating in EU airspace. For instance, Singapore Airlines will be required to hold permits for CO2 emissions for its flights from Singapore to Frankfurt, which will include all CO2 emissions over Singapore, third countries, the high seas and EU airspace. As climate change is a global challenge, national and regional efforts to reduce CO2 emissions have an international impact by nature, particularly on trade. With the World Trade Organization (WTO) responsible for regulating world trade, this article analyses the consistency of the EU Aviation Directive with WTO rules.

The EU's decision to include both non-EU and EU airlines under its cap and trade system is a response to the so-called carbon leakage and competitiveness issues that would have arisen if the scheme had been limited to EU airlines only. Carbon leakage arises when a carbon price leads domestic businesses to relocate to countries not pricing carbon or to increased imports of goods from countries not pricing carbon, resulting in no net reduction in global CO2 emissions. Competitiveness issues occur when a carbon price increases the price of domestically produced goods, causing consumers to substitute with cheaper imports from countries not pricing carbon, ultimately harming domestic industry and undermining support for these policies. With airlines providing an important international services trade, including CO2 emissions from aviation under the EU cap and trade system has important implications for international trade, particularly since air transport functions as an enabler of other forms of trade such as just-in-time manufacturing strategies, tourism, and business links. Despite the number of ways in which the Aviation Directive is in conflict with WTO rules, the article demonstrates that the type of WTO rules that the EU Aviation might violate are useful disciplines on how countries develop and apply climate change action that impedes international trade. Developing climate change measures consistently with WTO rules strikes an appropriate balance between giving WTO Members the policy space to take action to reduce CO2 emissions while maintaining an open and non-discriminatory trading system that supports economic growth and global welfare.

Read the full article on the Journal of International Economic Law website (subscription required) »

Authors

Joshua Meltzer

Publication: Journal of International Economic Law

Russia and the World Trade Organization: Not the End but the Beginning

Clifford G. Gaddy — Fri, 16 Dec 2011 14:44:00 -0500

That Russia finally has been admitted to the World Trade Organization is good for the world, both for the global system as a whole and for the current members. The WTO represents an open, rules-based global trading system. The more countries who are in, the better. Some foreign companies that have had difficulties entering the Russian market will benefit immediately as barriers to their access are lowered or removed.

How good WTO membership turns out to be for Russia itself is less clear-cut. Russia doesn't have much to gain in terms of better access to foreign markets, because few of its exports other than commodities are very competitive. The key point is that the main “good” that the WTO will bring to Russia is in the longer term, and it will happen by causing pain in the shorter term. Russian companies will be more exposed to direct competition from their foreign counterparts. The idea is that this pressure will in turn force Russian companies to become more competitive. That will lead to growth in the economy, higher living standards, more jobs. That’s what’s supposed to happen — in theory. But reality doesn’t have to follow that track. The immediate negative consequences — reduced sales, lost jobs — may be so severe as to be intolerable. The real question is whether Russia really will change in order to conform to the WTO rules, or whether it will bend or evade the rules.

Russia has a remarkable ability to resist both carrots and sticks that seem to work everywhere else. International bodies with seemingly powerful enforcement mechanisms (e.g., the IMF in the 1990s) have been convinced that they could force Russia to change, but without success.

The good news is that the harsh effects of WTO regulations will not affect Russia all at once. Many of the serious requirements will be phased in over the course of a few years. Even so, it should not take long before some foreign country puts Russia on the receiving end of accusations of violating some WTO rule or other. At that point, a different kind of competitiveness comes into play – expertise in the area of international trade law. Russia is at a decided disadvantage here, because it is so inexperienced.

For Russia, joining the WTO is like a football club, or ice hockey team, that moves up to a higher division. It will now have to play against opponents that are bigger, stronger, more skilled. Rarely does a team that makes such a move win many games in the beginning. It will be tough. It’s taken Russia 18 years to gain entry to the WTO. Finally gaining admission is not the end of the story. The real game has just begun.

Authors

Clifford G. Gaddy

Trade and Climate Change: A Mutually Supportive Policy

Joshua Meltzer and Katherine Sierra — Wed, 07 Dec 2011 00:00:00 -0500

INTRODUCTION

There are several links between trade and climate change, but in most cases these connections have been viewed as being in tension or in conflict. For example, there is concern that domestic climate change policies promoting renewable energy may be inconsistent with the rules prescribed by the World Trade Organization (WTO). There are further concerns that United Nations (UN) climate change discussions on the role of intellectual property may undermine WTO intellectual property rules.

The potential for conflict between trade and climate change policy is real. However, trade policy can also be used to support climate change action. In particular, an international trade negotiation to reduce trade barriers to goods developed using low-carbon processes could support climate change policy and create incentivize businesses to reduce their greenhouse gas (GHG) emissions.

Read the full piece on Harvard International Review »

Authors

Publication: Harvard International Review

The Trans-Pacific Partnership — Its Economic and Strategic Implications

Joshua Meltzer — Fri, 30 Sep 2011 10:48:00 -0400

While the challenges of the World Trade Organization (WTO) Doha Round have been the focus of attention recently, real trade policy action has been happening in the Asia-Pacific region. Already the Asia-Pacific accounts for about 50 percent of trade and 60 percent of global GDP and the International Monetary Fund (IMF) estimates that by 2030, the GDP of Asia will exceed that of the G7.

One of the key trade negotiations currently underway in the Asia-Pacific region is the Trans-Pacific Partnership (TPP), a regional free trade agreement (FTA) that comprises the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. These countries represent about 26 percent of global GDP and approximately 17 percent of world trade. Currently, U.S. trade with TPP countries represents 6 percent of total U.S. trade and 17 percent of trade with Pacific Rim countries. Additionally, the economic significance of the TPP for the United States will likely increase as the Obama administration has signaled its willingness for other countries to join the partnership and for the TPP to become a building block for a free trade area of the Asia-Pacific a goal that was proposed at the 2006 APEC Summit in Hanoi. To strengthen the role that the TPP could play in building towards an Asia-Pacific FTA, all parties have agreed that, in principle, APEC members are eligible to join the new partnership.

A successful conclusion to the TPP negotiations will be economically beneficial to all parties, and its significance will go beyond the capacity to liberalize trade. As the only regional trade negotiation involving the United States and other countries in the Asia-Pacific region, the TPP could be the basis for building the rules for international trade and investment in the region for years to come.

In this respect, it is important to recall that the overwhelming benefits from trade liberalization do not accrue from increased access to other countries markets, but instead by liberalizing one’s own market. For many TPP parties, binding themselves to such rules in an international treaty can be an important impetus for domestic economic reform. Deepening the role of fair, open and competitive markets in the Asia-Pacific region should help drive continued economic growth.

The TPP parties are, therefore, developing new rules to reflect the growing economic importance of the Asia-Pacific region and its role in manufacturing, global supply chains, and as a destination and source of foreign investment. So far, this has included new rules on regulatory coherence, supply chain management, intellectual property and investment. The United States will also propose for the TPP rules on state-owned enterprises to address market distortions caused by unfair competition from government-owned businesses. These are in addition to rules more commonly found in FTAs to which the United States is party, such as on non-tariff barriers including sanitary and phytosanitary measures and standards, labor, the environment, transparency and dispute settlement.

The TPP will also have important strategic implications for United States engagement in Asia moving forward. U.S. economic engagement in Asia has been declining over the last decade. For instance, in 2000 the United States was Malaysia’s largest export market and second largest source of imports and by 2010 the United States had slipped to being Malaysia’s third largest export market and fourth largest source of imports. This is an example of a trend of declining U.S. trade across the Asia Pacific region.

The United States has also been left behind in the growth of FTAs in Asia. The only FTAs the United States has finalized in the region are with Australia and Singapore—and the importance of Congress passing the Korea-U.S. FTA should been seen in this light. In contrast, from 2000 to 2009, the number of FTAs in Asia increased from three to 54 and another 78 are under negotiation. Moreover, the European Union (EU) has an FTA with Korea and is assessing whether to negotiate an agreement with Japan. U.S. absence from this proliferation of rule-making in Asia has limited the nation’s role in designing the rules under which increasing amounts of trade and investment are occurring. These FTAs will also divert trade from the United States, further reducing U.S. economic significance in this region.

During this same period, Asian economic architecture has also matured. In addition to APEC, a range of other forums for discussing and pursuing economic goals have developed. Some forums, like ASEAN +3—ASEAN countries plus China, Japan and South Korea—have been closed to U.S. participation. Other forums such as the East Asian Summit the United States has recently joined (members now include ASEAN+ 3, Australia, New Zealand, India, Russia and the United States). Ensuring that the United States plays a key role in shaping Asian economic architecture will also affect its influence in the region. This is particularly the case as China continues to grow and the influence of traditional allies such as Japan declines. In this context, the TPP could become the building-block of a free trade area of the Asia-Pacific region and a basis for international economic cooperation.

In order for the TPP to play its intended economic and strategic role, a successful conclusion to the negotiations is needed. The addition of other parties to the agreement will also be necessary to give it economic and strategic weight. The most pressing issue is whether Japan will join the TPP in time to participate in the ongoing negotiations. In 2010 former Japanese Prime Minister Nato Kan had said that Japan was considering joining the TPP and Prime Minister Noda has recently said that Japan will make a decision whether to join the TPP shortly. Many within Japan see the APEC Summit in Hawaii in November 2011 to be the final opportunity to joining the TPP negotiations.

The significance of Japan globally, but in the Asia-Pacific region in particular, can at times be overlooked in light of its poor economic performance, especially when compared to the stellar growth rates of neighboring China. Yet Japan’s economy remains the world’s third largest, which in 2010 had a GDP of $5.49 trillion, only slight smaller than China’s GDP of $5.87 trillion (World Bank Indicators, 2010). In addition to being a key U.S. ally in the region, Japan represents approximately 5 percent of global trade.

The key hurdle to Japan joining the TPP depends on its ability to reform and open its agriculture sector in ways that would be required under a TPP negotiation. However, the devastation of agricultural districts by the Fukushima tsunami and nuclear meltdown has shifted the focus in Japan to rebuilding its agriculture sector and strengthened the hand of those within Japan who argue that now is not the time to liberalize this sector.

In the event that Japan does not join the current TPP negotiations, the TPP parties should ensure that a final accord includes a process that allows additional countries to accede to the TPP in ways that are workable. How the parties manage their engagement with prospective members such as Japan, but also Canada and possibly South Korea will determine whether the TPP will be an FTA amongst the current parties only, or plays a more significant role in driving economic reform and integration in the Asia-Pacific region.

Authors

Joshua Meltzer

The United States Should Wish Bon Voyage to the World Bank

Lex Rieffel — Fri, 16 Sep 2011 11:34:00 -0400

The global rise in prosperity and personal freedoms over the past 65 years has been an immense human achievement despite a string of horrible regional conflicts and pockets of terrible suffering.

Three pillars of the economic architecture created after World War II were instrumental in this record of success: the International Monetary Fund, the World Bank and the General Agreement on Tariffs and Trade (or GATT, which evolved into the World Trade Organization, or WTO). All three have been criticized for decades by one political group or another, and they remain controversial — but it cannot be true that the world would be better off today if they had never been established.

Moreover, the latest “Four Horsemen of the Apocalypse” — climate change, food security, infectious disease and urban youth unemployment — are rapidly approaching. It is hard to believe that the seven billion people living in 200 nations on earth today will be successful in holding them off without strong global institutions like the IMF, the World Bank and the WTO.

But are these institutions ready to meet the challenge? The answer from most analysts is “No,” and since the global financial crisis erupted in 2007, the calls for reform have escalated sharply.

Most of the proposed reforms focus on governance, especially reducing the dominant position of the United States and the European Union and giving the rising powers such as Brazil, China and India more of a stake in these institutions. However, there is one other way of strengthening these institutions that is rarely mentioned and merits consideration.

While the WTO is based in Geneva, Switzerland, both the IMF and the World Bank are headquartered in Washington, D.C. The time has come to move at least one of them out of the United States.

There are three compelling reasons for doing so:

Co-location in Washington has contributed to the almost universal perception that there is no significant difference between the IMF and the World Bank. They work so closely together and have so many overlapping activities that they look like conjoined twins. Their missions, however, are fundamentally different. Separation could make each one more effective.

The world is no longer U.S.-centric. As we iterate toward better forms of global governance — such as the shift from G7 summits to G20 summits — broad international support for the IMF and World Bank will depend on changing the widespread belief that they are instruments of U.S. policy. Moving one of them out of the United States would be a powerful symbolic step toward a global governance system that has broader legitimacy.

Until recently, Washington offered lifestyle advantages (such as access to high-quality education) that few other countries could match for attracting an international staff with the peerless expertise these institutions require. Now there are dozens of cities outside the United States offering comparable attractions. Moreover, high-speed Internet and other essential technologies are equally available in these cities.

Of course there are strong arguments for keeping both the IMF and World Bank in Washington, but to simplify the discussion, and assuming for the moment a general agreement to separate them, which of the two institutions should be moved — and to where?

Moving the World Bank makes much more sense than moving the IMF. In particular, the World Bank has no mandate to carry out operations in the United States. In contrast, the most important function of the IMF — which shockingly few people understand — is to assess the economic policies of the countries that play the largest roles in the international monetary and financial systems. As long as the United States has the world’s biggest economy and its deepest financial markets, it makes sense for the IMF to be based in the United States.

Because the World Bank’s operations are overwhelmingly in developing countries, a case can be made for moving the World Bank to Africa, Asia or Latin America. However, putting the World Bank headquarters in one of these regions would not sit well with the two others.

Europe, in contrast, offers numerous advantages. In particular, the European time zone has proven to be the best location for organizations that operate globally. Only there does the business day overlap with normal working hours in the rest of the world. Furthermore, support for the World Bank is broader and deeper in Europe than in the United States.

On the other hand, moving the World Bank to Istanbul in Turkey — the most obvious bridge between the West and the rest — has considerable appeal. So does Johor in Malaysia, a bridge away from Singapore.

If rated by a global panel of experts, however, Spain has two cities — Barcelona and Madrid — that look as though they would score higher than any others in Europe or elsewhere. One big advantage is that the World Bank’s Latin American members would gain a Hispanic host in exchange for losing one that is much closer. The other big advantage is that neither of these cities is currently hosting a major multilateral organization, unlike obvious alternatives like Paris and Rome.

The biggest obstacle to moving the World Bank out of Washington is the veto power that only the United States wields. While extremists exist in both political parties who, for different reasons, would like to see the Bank closed down, Republican and Democratic leaders in Congress can be counted on to attack vigorously the idea of moving it. Furthermore, the White House would be hard-pressed to justify expending any political capital on this issue with a dicey general election only 14 months away.

Although re-locating the World Bank is a political non-starter in the near term, none of the arguments for keeping the World Bank in Washington is compelling. So it is not too early to examine these arguments and begin a scholarly debate.

First, many supporters fear that the U.S. Congress will cut World Bank funding sharply if it leaves Washington. While such a reaction would be contrary to long-term U.S. interests, it is easy to imagine this result given the country’s current political mood. However, the United States has constrained funding increases for the Bank for more than a decade, and it is entirely possible for Europe and countries like China and Brazil to offset any reductions in U.S. funding.

Second, a move out of Washington could lead to a loss of control over the operations of the World Bank by the United States. However, a substantial reduction in U.S. influence in the years ahead is inevitable, regardless of where the Bank is headquartered. The odds are strong that the emerging-market countries will gain influence as their share of global economic output grows and as the U.S. share of the global population — already less than 5% — shrinks further.

Third, the World Bank’s departure from Washington would have a negative impact on the regional economy, including more unemployment. There is no way to avoid this impact, which would extend well beyond the Bank’s employees to a large number of well-paid contractors. But because the Bank occupies prime real estate in the heart of our nation’s capital, it should be easy to sell the Bank’s buildings. Moreover, putting these properties back in the private sector would boost local tax revenues since the World Bank — like foreign embassies — is exempt from taxes.

Fourth, the costs of moving the World Bank to Europe would be great. While it is true that the costs would be substantial, some of the biggest costs associated with similar moves in the past (like the construction of new buildings) have been underwritten by the host country, anticipating the large economic benefits over many years from gaining an employer of thousands of people. Furthermore, the Bank is already in the process of decentralizing staff to its regional offices, and the residual costs could be mitigated by stretching out the move over five or more years.

Fifth, easier and more important steps can be taken to strengthen the World Bank, such as ending the practice of always having an American president and instead appointing an outstanding individual from the developing world. Yes, steps of this kind can and should proceed without delay, and opening a debate on the pros and cons of separating the World Bank from the IMF need not slow them down.

Realistically, only the United States can initiate a serious debate about moving the World Bank to Spain or some other location. No other country would be foolish enough at this moment to challenge the United States on an issue that could offend national pride.

Launched at the right moment, however, a U.S. initiative could pay rich dividends. In particular, by enhancing the Bank’s legitimacy, it would help to make the World Bank more effective in meeting the global challenges that are likely to become more difficult in the years to come.

Above all, a U.S. initiative to consider moving the World Bank out of Washington is the kind of knock-your-socks-off gesture required to convince the world that the United States is looking beyond its short-term self-interests and sees the long-term benefits of making our global institutions look and feel more global.

Authors

Lex Rieffel

Publication: The Globalist

Doha or Bust

Homi Kharas — Fri, 03 Jun 2011 14:11:00 -0400

At the time the World Trade Organization's Doha Development round of talks was launched, in 2001, developing countries were largely absent from free trade negotiations, while the United States, the European Union, and Japan ran the show. And as a result, many countries saw few benefits from the global expansion of trade. The share of sub-Saharan African countries in global trade, for example, was actually falling by the turn of the century.

The Doha development round was set up to try and remedy these inequities by including topics of interest to developing countries, like agriculture, and by engaging these former outsiders more directly in the negotiations. But today, after a decade of stagnating debate, it's easy to forget even the basics of what these talks are about, particularly because the various papers coming out of the WTO on the subject bring to life Alan Greenspan's quip: "If you understood what I just said, I must have misspoken." The Doha round has become so bogged down in detail and insider language about Swiss formulae and Blue Boxes that the essentials seem to have been forgotten.

So what exactly do developing countries, the supposed target beneficiaries of the Doha round, want to achieve?

Read the full article on ForeignPolicy.com »

Authors

Homi Kharas

Publication: ForeignPolicy.com

Addressing the Legitimacy of the World Trade Organization

Joshua Meltzer — Fri, 29 Apr 2011 15:20:00 -0400

In a recent event, expert Joshua Meltzer stated that in order to make progress in international economic governance, policymakers must address the legitimacy of the World Trade Organization (WTO). A changing international economic environment has created a series of new challenges for the organization, putting focus on the WTO's capacity for global economic governance.

Authors

Joshua Meltzer

The Challenges to the World Trade Organization: It’s All About Legitimacy

Thu, 28 Apr 2011 14:30:00 -0400

Event Information

April 28, 2011
2:30 PM - 4:00 PM EDT

Saul/Zilkha Rooms
The Brookings Institution
1775 Massachusetts Avenue, NW
Washington, DC 20036

The World Trade Organization (WTO) has delivered significant global economic benefits through the liberalization of world trade. As the key institution for global governance of international trade, the WTO has also stabilized the rules on trade and provided an effective dispute settlement mechanism to manage trade conflicts. However, despite the WTO’s success, a changing economic environment creates a series of significant challenges for the organization. In a new paper, Brookings Fellow Joshua Meltzer argues that the WTO must focus on its capacity for global economic governance to respond to these current challenges and concerns about the WTO’s legitimacy must also be addressed.

On April 28, the Brookings Institution and Foreign Policy magazine will host the launch of Joshua Meltzer’s paper “The Challenges to the World Trade Organization: It’s All About Legitimacy.” Panelists will also explore the current challenges the WTO faces, such as the implications of the rise of large developing countries, such as China, India and Brazil; the failure to conclude the Doha Round of trade negotiations; and the rapid growth of bi-lateral free trade agreements.

Kemal Derviş, vice president and director of Global Economy and Development at Brookings, will provide introductory remarks. Susan Glasser, editor in chief of Foreign Policy, will moderate the discussion. After the presentations, panelists will take audience questions.

Video

Audio

The Challenges to the World Trade Organization: It’s All About Legitimacy

Transcript

Transcript (.pdf)

Event Materials

20110428_wto_transcript

Participants

Moderator

Susan Glasser

Editor in Chief
Foreign Policy

Panelists

Jeffrey J. Schott

Senior Fellow
Peterson Institute for International Economics