Whither multilateralism?

Agreements	Number of countries	% of World Population	% of GDP	% of World Trade
Trans Pacific Partnership (TPP)	12	40	60	50
Trans Atlantic Trade and Investment Partnership (TTIP)	2	17	40	34
Regional Comprehensive Economic Partnership (RCEP)	16	49	30	29
Trade in Services Agreement (TISA)	23	25	-	68 (% of Services Trade)

With these kind of mega deals being negotiated, whither multilateralism in trade rule making?

Now, that is a large team

Russia is one of the new members at the WTO. I have blogged about it here, here and here.

And now it has a large team at the WTO Mission - 32 members proposed for the Russian Mission, as highlighted in this piece in the Moscow Times.

"Having a mission on the ground in Geneva is considered essential for a member country to be able to defend its interests within the WTO. Since joining the organization in 2012, Russia has been embroiled in a number of trade disputes, for example over its attempts to shelter its domestic car industry by forcing foreign manufacturers to pay tariffs not applied to local firms."

Time to cope with the multilateral trade body's membership. As on date Russia was already a complainant in one case, respondent in 2 cases and third party in 8 cases at the dsipute settlement proceeding of the WTO.

India and dispute settlement

A regular follower of Trade Law and Development Journal, here is the latest issue on India and the international economic system. 

A piece on India's engagement with the WTO dispute settlement system by James Nedumpara caught my attention. Highlighting India's experience with the dispute settlement system so far, its engagement with challenges faced thereof, the author does conclude that India would have to sustain the capacity already built:

"India’s challenge in the future will be to sustain the capacity already built. Trade disputes are cyclical and it may require positive intervention on the part of the government to foster and nourish trade-related capacity. This article has highlighted the need to establish better channels of communication between the government and industry. Furthermore, a bottom-up approach to stakeholder participation will be feasible only if the government encourages private sector and educational institutions to take greater interest in international trade issues. A large number of trade-related governmental institutions and adjudicatory bodies in India are yet to achieve a desired level of sophistication in WTO matters. Equipping these agencies with the necessary understanding of WTO matters will be crucial for India’s chances of playing a leading role in WTO dispute settlement." 

The WTO dispute process involves the State as the primary actor. However, the interests are largely those of private businesses and sectors, both small and large. To find that partnership model of India's State capacity, legal brilliance and private sector participation will decide the success of India at the WTO dispute settlement process.

Seal trade dispute - It is not sealed yet

The Seals dispute case has attracted a lot of attention in international trade law circles. The Panel decision found the exceptions to the import ban to be inconsistent with EU's obligations under the TBT Agreement.

However, the battle is not yet done. Canada and Norway, who were complainants in the case have preferred appeals to the Appellate Body at the WTO. The details are found here.

Particularly Canada stated this in the notice of appeal:

"Canada submits that the Panel erred in finding that the EU Seal Regime is provisionally justified under Article XX(a). Specifically, the Panel failed to interpret and apply the first element12 of Article XX(a) correctly, by ignoring the words "to protect", and thereby omitting to determine whether the sale in the European Union of products derived from commercial seal hunts created a risk to an EU public moral.13 It also erred in its interpretation and application of the necessity test under Article XX(a) with respect to the issues of the contribution of the EU Seal Regime to the identified objective, and with respect to the reasonable availability of the alternative measure advanced by Canada already noted above in the context of Canada's request for review under Article 2.2 of the TBT Agreement.14 In addition, although it came to the correct conclusion that the EU Seal Regime is not consistent with the requirements of the chapeau of Article XX, the Panel erred in its reasoning in coming to this conclusion.15"

The Public Moral issue back to the forefront once again?

 

Currency manipulation issues in trade agreements - To be or not to be?

Fred Bergsten's latest Peterson Institute's Policy Brief titled "Addressing Currency Manipulation through Trade Agreements" arguing for currency issues to be taken up in regional trade agreements is found here.

For a contrarian view, that currency manipulation issues should not find place in trade agreements, read this piece in Mireya Solis in the Brookings Institution blog.

"For the many reasons highlighted above, TPP countries are unlikely to agree that the current proposals in the United States on currency manipulation are a faithful interpretation of the IMF principles to which they already subscribe. Demanding that American trade negotiators introduce such a chapter at this critical stage in the negotiation process is akin to throwing a wrench in the works of the single most important trade initiative under way: one that will determine whether the United States is a key actor in shaping an Asian regional economic architecture or not, and one that will also affect the fate of negotiations with Europe. It would also mean that the United States is prepared to forego the possibility of a future Chinese entry into the TPP and give up the sizable benefits of promoting greater market reform, regulatory transparency, and compliance with intellectual property rules, to name just a few. All of this, for the sake of an unworkable proposal on currency manipulation."

Currency manipulation provisions in trade agreements - Imminently feasible or unreasonably optimistic?

Joseph Stiglitz on trade agreements

Academics often do write (often critically) about policy challenges and trade policy. However, when the likes of Joseph Stiglitz write, it does evoke interest.

Came across this letter from Joseph Stiglitz written to trade negotiators. I do not normally write about intellectual property issues nor about trade agreements but what I found interesting in this letter is seeking a TRIPS minus outcome in a trade agreement.

"At this point in time, we do not need a TRIPS plus trade agreement, we need a TRIPS minus agreement. The TPP proposes to freeze into a binding trade agreement many of the worst features of the worst laws in the TPP countries, making needed reforms extremely difficult if not impossible."

Hat tip to International Political Economy Zone for this one.

How deep is globalisation?

Pankaj Ghemawat and Steven A Altman have come out with this exhaustive report on globalisation titled "Depth Index of Globalisation 2013" which "provides up-to-date data and analysis on the depth or intensity of globalization and relates it to what we call the big shift: the rising proportion of many types of activity occurring in emerging economies. It points out that overall, globalization’s post-crisis recovery stalled last year, as a result of which the world is still less deeply interconnected today than it was in 2007. It also shows that while growth in emerging economies has slowed somewhat, the big shift continues."

The 10 take-aways from the report are:

1. Globalization’s post-crisis recovery stalled last year, leaving the world still less deeply interconnected in 2012 than it was in 2007. Macroeconomic weakness was the main culprit, but there is also evidence of increasing protectionism.

2. Foreign direct investment depth plummeted 21% in 2012 and the share of the world’s economic output traded across national borders declined modestly, but growth on the information and people pillars continued. The number of international tourist arrivals crossed the 1 billion mark for the first time.

3. Internet fragmentation has become a growing concern even as international bandwidth continues expanding. Interactions on social media, like other information flows, mostly remain domestic and regulatory impediments may curtail the potential of technological advances (e.g., cloud computing) to expand them. 

4. The big shift in the share of world output from advanced to emerging economies continued, with the latter driving most of the growth of international flows even as the largest among them, China, significantly reduced its reliance on exports and foreign investment. 

5. Emerging economies are only about one-quarter as deeply integrated into international capital and people flows and one-ninth as globalized in terms of information flows as advanced economies, but are roughly at parity with respect to international trade.

6. The big shift has already driven profound changes in the pattern of globalization, e.g., declining regionalization of merchandise exports after increases for most of the post-war era. If emerging economies tend toward advanced economies’ levels of globalization as they grow wealthier, the big shift beyond trade has only just begun.

7. Multinational firms are struggling to keep up with the big shift. While multinationals from emerging economies remain few and far between, firms from advanced economies are falling behind their new competitors. Their people, in particular, have not globalized as fast as their operations and sales targets.

8. At the regional level, Europe is still the most deeply globalized region despite recent setbacks. Sub-Saharan Africa and South & Central Asia lag the farthest behind—although South & Central Asia did experience the second biggest increase in depth of globalization in 2012, behind North America. 

9.Strengthening international flows could bolster macroeconomic recovery, with every country (and region) possessing untapped possibilities to increase its depth of globalization through domestic as well as international policies.

10. Looking ahead, the largest threat to globalization comes from policy fumbles rather than macroeconomic fundamentals, since the world economy is still projected to grow faster from 2012-2018 than over any of the past three decades.

I have earlier blogged about Pankaj Ghemawat's works here.