Global Trade Alert
Fri, Jul 03 2009trade
g20
protection
transparency
Just before the London G-20 Meeting in April, Andy Stoler and I wrote a paper for a booklet published by the Center for Economic Policy Research in which we suggested that the best way to make G-20 governments live up to their promises was to expose their misdeeds on trade policy—including those that nominally complied with their WTO obligation—using a public website.
Specifically, we recommended that the site should not be run by one of the global institutions (WTO, World Bank) that are owned by governments, but should be a private venture open to contributions from individuals around the world. Why? Well, as the FT notes, in an editorial today, sovereigns are not likely to put much pressure on themselves:
"The problem with naming and shaming wrongdoers is that, all too often, they turn out to be shameless." Extract from Financial Times
I am delighted to learn that the co-editor of the booklet (Simon Evenett) and the publishers (CEPR) have created just such a website: Global Trade Alert. It has been launched in the past couple of weeks with the backing of institutional sponsors (government funds, mostly) and an advisory board of distinguished analysts. GTA already lists a couple of dozen measures with useful details including the trading partners and tariff lines affected (for goods measures).
A nicely implemented and potentially intriguing experiment in global transparency. Please visit and contribute.
Critical mass agreement vs the Doha Round
Thu, Jul 02 2009wto
agriculture
doha
trade framework
We'll cut to the chase, shall we, in this fourth of my posts on modeling the impact of a 'critical mass' agreement in agriculture? Click on the tags at the left-side or at the bottom of this article to find the earlier posts.
A 'critical mass' agreement among 38 countries that account for 80 percent of world trade in the 30 top-traded agricultural products (all of them food) to eliminate import duties on those products would achieve about two thirds of the projected value of the global Doha agreement on agriculture. If the members of the CM eliminated production and export subsidies, too (turns out, they won't have much choice) the global gains would be a third as much again as those projected for the Doha agreement.
Click the thumbnail to see the results in a table. A brief explanation of the table: the CM-35 scenario assumes that 3 of the potential members of the critical mass agreement decide not to join. They are China, India and Indonesia. As you can see the projected 'static' global welfare impact is actually slightly larger if they stand-back because China and India (especially) would benefit from the opportunity to 'free ride' on the open markets of the other 35 countries.
Read more…Let’s hope this means more clarity
Fri, Jun 26 2009agriculture
doha
usa
Trade ministers in Paris for the June OECD meetings are looking for Lamy's 'second track' to a Doha deal.
"U.S. Trade Representative Ron Kirk called for a new approach to the Doha talks, involving direct negotiations with key trading partners as the traditional multilateral format was not working…'We think getting more clarity around that ['exactly what the U.S. would gain'] may be the key to helping us find a solution to a way forward,' Kirk said after a meeting of ministers at the Organization for Economic Co-operation and Development (OECD)." Extract from Reuters via Portfolio.com
Lamy did not mean—as this news report suggests—that the 'second track' would be series of bilateral deals. That's a long-standing U.S. fallback position (from the days of GATT), but I doubt Kirk had that in mind either. Here's the official account of what he said.
By the way, isn't it great to see that USTR has finally dumped that crappy old web-site and has adopted the much more accessible Obama-Whitehouse (or, maybe, Vivek Kundra) style?
Manufacturing copyright ‘consensus’
Fri, Jun 26 2009evidence
copyright
consensus
coalitions of interest
A fascinating analysis of a 'coalition of interest' at work—strategies often alleged but rarely detailed with such clarity.
Geist shows how three Canadian entertainment industry organizations have manufactured the appearance of widening concern over copyright piracy and growing evidence of its impact.
"It is not just that these reports all receive financial support from the same organizations and say largely the same thing. It is also that the reports each build on one another, creating the false impression of growing momentum and consensus on the state of Canadian law and the need for specific reforms" Extract from Michael Geist
Geist notes that experienced politicians seem to understand what's going on here. That's to be expected: this is nothing more than an elaborate, effective and, in the scheme of things, acceptable lobbying strategy.
But that knowledge doesn't shield polticians—or the public debate—from the misrepresentation of either the data or the 'consensus' unless the insight is widely shared. Few make the effort that Geist has made to evaluate either.
Opening food markets in a CM agreement
Wed, Jun 24 2009agriculture
trade framework
model
critical mass
The immediate net global gains from a 'Critical Mass' (CM) trade agreement to open markets for some 30 products in 38 of the world's largest markets would be about $10 billion. World trade in these products would expand by a third with most of the export gains won by developing countries.
This is the third post in a series of five intended to share with you the results of some simulations of an alternate approach to reducing harmful levels of protection in world food markets. The Doha Round of WTO trade negotiations has got itself into a terrible tangle over that goal, becoming "a knotty mass of rules for cutting barriers, rules for compensating the barrier cuts, rules for making exceptions to the barrier cuts, and provisions adding exceptions to the exceptions."
The simulated CM agreement I describe in this post has a more limited product and country coverage than the proposed Doha Round. But—in the next post—I'll compare it to a projection of the Doha Round deal using the same economic model. I think you'll be surprised by how well it stands up.
A Critical Mass Agreement on cereals trade
Wed, Jun 17 2009trade framework
model
critical mass
cereals
In this post I'll describe the simulated impacts of a Critical Mass (CM) trade liberalization agreement on global trade in cereals. This is the second of five posts about some simulations I've created to investigate whether CM agreements could be an alternative to the standard WTO approach to opening up world markets for agriculture.
The bottom line: an improvement in global welfare of between $3.4 billion and $5.5 billion ($US 2006) depending on how the CM agreement is configured. 'Global welfare' means, roughly, the sum of changes (positive or negative) in three asset classes: producer revenues, government taxes and value for consumers. A surprising result is that India turns out to be one of the biggest winners in terms of net trade flows (excess of exports) whether it participates in the agreement or not, but its welfare gains are small because producers' gains are all but offset by consumers' losses.
I'll look at the results of the cereals CM agreement, first. At the end of this post I'll describe the advantages and limits of the ATPSM model that I've also used to simulate liberalization of a much broader range of commodities. More about the bigger results in later posts along with some ideas about how you can use the ATPSM model to create your own simulations.
Investment barriers stuff-up China relations
Mon, Jun 15 2009china
investment
resources
No one I know seriously questions the importance of China to Australia's external balances, especially now in the trough of a recession. Nor can we have any doubts about China's growing political, cultural and 'strategic' importance for us and our region of the world. So why would a government led by sinophile make such a terrible, embarrassing, stuff-up of its response to a proposal from a top Chinese resources company to deepen our commercial relationship?
John Garnaut bluntly explains in today's Fairfax press what a hamfisted, mis-aimed blow the denial-by-delay in the Chinalco-Rio case has dealt our relations with the Chinese government and top Chinese commercial management. How wooden-headed and inept is our commercial diplomacy to give the impression that Australia disdains commercial integration with China when our official objective—and our real, considered objective, I'm confident—is absolutely the converse?
Considering both the tiny trickle of Chinese investment flows (below) to Australia and the top priority that China has in our foreign policy, this error-of-omission beggars belief.
Modeling ‘critical mass’ trade agreements
Mon, Jun 15 2009wto
agriculture
trade framework
model
In the past couple of weeks, I've been modeling the economic impacts of an alternative way to open up world agricultural markets using 'critical mass' trade agreements.
I thought I would share some of the results of the modeling with you, here on my website, over the next couple of weeks.
The simulations run inside the trade model suggest that there would be huge wins from adopting a new, more practical approach to the knotty old problem of opening up food markets that has so far stymied WTO. But the economic gains are not necessarily where you might expect to find them and they raise some questions about the likely interests of the giant emerging economies of India and China.
Also, I thought you might like to learn how to make your own economic model of changes in world agricultural trade trade policies, even if—like me—you don't have the data or the mathematical background that modern economic models require. I'll show you how I went about building a model of the impacts of the proposed Doha Round agreement on world trade in agriculture.
Readers pay for publishers’ protection
Tue, Jun 09 2009copyright
books
Joshua Gans seems to agree with me that access to low-cost Kindle e-books is one reason to get rid of the ban on competitive ('parallel') import of books.
"So why is it possible for hard copies of books to move across international borders but not electronic copies? The answer is that publishers, who have intellectual monopolies over these works, for their own reasons have not done the deals to make it possible. " Extract from The Age
He suggests that publishers could try a 'fair trade' pricing scheme for local publishing. But they do that already.
Budget transparency turns murky
Thu, May 28 2009data
finance
transparency
So much for the Government's "Operation Sunshine" that was supposed to make budget program expenditure more transparent and accountable.
On the biggest single program item, Defense—a staggering 2.3% of GDP or $27 billion dollars next year alone—it seems to be a case of re-negging and obscurity.
"As the first budget after a new Defence White Paper, there is a glaring absence of substantive information on funding, investment and reform. The best that can be said is that the budget is consistent with a White Paper that’s silent on when anything will occur or what things will cost. All we are offered is a vision of what the defence force will look like in 2030." Extract from Australian Strategic Policy Institute
The ASPI's chief analyst has described the Budget papers as "deliberately vague".
Two tracks out of the Doha wasteland?
Thu, May 28 2009wto
agriculture
doha
critical mass
Pascal Lamy wants to stir up more action in the WTO's Doha negotiations —at least its appearance—by opening up a 'second front' for the exchanges. One group will battle on to refine the technical rules and one will start a 'show and tell' exploration of the implementation of the rules.
"My own sense is that there is scope to work on these two areas along two simultaneous tracks. One would see technical engagement in the negotiating groups move to a higher gear to cover a number of technical issues as mentioned previously. Simultaneously, Members would start some sort of ‘outcome testing’, through bilateral or plurilateral discussions, where they would provide each other with greater clarity on the use of flexibilities and through it, on the value of the deal." Extract from Lamy's address to the WTO General Council meeting
But if the problem is that a large number of countries are reluctant to engage at all, how will widening the front lead to an earlier outcome?
U.S. breaks G-20 promise on trade
Sun, May 24 2009agriculture
g20
subsidies
Just to remind you of what they said in April:
"We reaffirm the commitment made in Washington not to raise new barriers to investment or to trade in goods and services, including within existing WTO limits, not to impose new trade restrictions, and not to create new subsidies to exports." G-20 Communiqué emphasis added
By any measure the re-introduction of an export subsidy for the coddled U.S. dairyfarmer is a new subsidy, even if within the terms of the 1994 WTO agreement on subsidy ceilings (cooked-up by the USA and EC in 1992). It's outrageous and damaging. But foreseeable.
"The US Agriculture Department said it will subsidise about 92,000 tonnes of dairy products headed for the world market. A spokeswoman said the subsidies would help US farmers hit by plunging international prices and trade volumes and was the first time in five years the program would be used." Extract from The Age
Risk and liberty
Sat, May 23 2009ideas
risk
Interesting new book "What Price Liberty" from UK academic, Ben Wilson. You can download the book from the publishers (Faber & Faber) from now until 4 June for whatever price you think it's worth.
Nowadays states regard the individual as a potential troublemaker, a selfish economic actor who puts personal gain first: a risk in other words.
Plimer review: more from G Schmidt
Sat, May 23 2009climate
evidence
model
science
Dr Gavin Schmidt has further criticisms of my review of Plimer (and of Plimer's book). I'm happy to reproduce them as emailed (presuming again that he has no objection). He has three main points concerning the Wegman 'cluster' analysis of the Mann authorial relationships; whether the Hockey Stick article was a 'fraud', and; whether Plimer's account of paleo-climate variability matters to current concerns.
U.S. and Global Temperatures: a correction
Fri, May 22 2009climate
data
temperature
statistics
Dr Gavin Schmidt, a climate modeler at NASA and a principal author of the Real Climate weblog, has emailed me to point out an error (mine) in my review of Ian Plimer's Heaven + Earth.
I said that I had learned from Ian Plimer that NASA had reversed it's claim that the ten years following 1995 were the hottest ten years of the century when Steven McIntyre showed that the record belonged to 1934. But, as Dr Schmidt points out, 1934 was the hottest year in the GISS records only for the United States, not in the global GISS records. He goes on to accuse Prof. Plimer of 'lying' to his readers about this, and other, matters.
I am grateful to Dr Schmidt for pointing out this error, which I have corrected. But I still share Ian Plimer's amply-documented conclusion that there is no reason for alarm about the slight warming that undoubtedly took place over a fifty year period from the 1940s.
Scary pictures of a deep recession
Tue, May 19 2009data
recession
From the Federal Reserve of Minneapolis, these charts comparing output and employment trends in this recession compared with all post-war recessions in the United States. No sign of bottom here.
The charts are interactive. You can pick your own poison, if you follow the link.
Plimer’s Heaven + Earth
Mon, May 18 2009climate
evidence
carbon
book
I have finally finished reading and skimming Ian Plimer's thick book Heaven + Earth. I found it admirable for being a comprehensive and intelligent account of relevant evidence on climate change. I did not like it so much for the writing, or for the organization of ideas in some places, but that's a quibble in light of the book's strengths.
Prof. Plimer's book looks like a text book (and weighs about as much), but in reality it is a piece of rhetoric. He has collated a very strong argument, based on the record of scientific enquiry, for rejecting the case—already flimsy on the grounds of common sense—for climate alarm.
Two strikes from recession, not three
Sat, May 16 2009trade
data
recession
macroeconomics
Lindsay Tanner's claim reads like part of a narrative that has been prepared by the Rudd government.
"The challenge for the government now is that whereas Hawke and Keating had ’86 terms of trade, ’87 stock market crash, ’90 recession, we’ve had all three, in effect, within the space of about a year and all feeding off each other in various kind of negative synergy ways." Extract from Business Spectator interview with Finance Minister Lindsay Tanner
But the three-strikes story isn't true.
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How to prepare for FTA negotiations (Part III)
In the third part of my 'checklist' for preparing an FTA negotiation I briefly cover the identification of relevant economic data (including hints on what to do if you can't find what you need), and; some topics that don't fit elsewhere but contain suggestions that arise from my own experience in negotiations including approaches to 'team management' for the negotiators. This section ends with a reminder that the benefits (and the costs) of a credible agreement are often anticipated by business and factored into their plans long before the end of the official 'implementation' period.
...moreOther things
Another small step
Ex-PMs attack Defense White Paper
Malcolm Fraser and Paul Keating, who would have believed it? Both criticize the obscurely Sino-phobic tone of the White Paper and advocate—in place of a more belligerent regionalism, or reliance on the US alliance (for something it is not designed to deliver)—a more effective regional engagement.
Doesn't convince the Colonel Blimps, of course, who imagine that with sufficient expensive and obsolescing weaponry, Australia could run a "totally independent foreign policy" (independent of those pesky foreigners, presumably).
Is the U.S.A. really warming?
An examination of the evidence using the U.S. government's own records. The Australian BOM 'adjustments' are similarly large.
"The corrected data from NOAA has been used as evidence of anthropogenic global warming yet it would appear that the rising trend over the 20th century is largely if not entirely an artefact arising from the 'corrections' applied to the experimental data, at least in the US, and is not visible in the uncorrected experimental data record." Extract from Jennifer Marohasy
Temperatures for May in Victoria
Temperatures in May 2009 were 0.52° C above the historical average.
Liberty upheld in France
Probably not the final word on this coup by copyright extortionists.
"The French Constitutional Council has ripped into the new Création et Internet law which would disconnect repeat online copyright infringers, calling the basic premise unconstitutional. 'Innocent until proven guilty' remains a central principle of French law, and it cannot be bypassed simply by creating a new nonjudicial authority." Extract from Ars Technica
Messages from AF447
"Over a time span of four minutes, starting at 02:10 UTC, a series of ACARS messages were sent -automatically- from the plane. The first message indicated the disconnection of the autopilot followed and the airplane went into 'alternate law' flight control mode. This happens when multiple failures of redundant systems occur. From 02:11 to 02:13, multiple faults regarding the Air Data Inertial Reference Unit (ADIRU) and ISIS (Integrated Standby Instruments System) were reported. Then on 02:13 the system reported failures of PRIM 1, the primary flight control computers that receive inputs from the ADIRU and SEC 1 (secondary flight control computers). The last message at 02:14 was a 'Cabin vertical speed' advisory. " Extract from Aviation Safety Net
Into the debt abyss
Engaging tale from one of the economic writers of the NY Times on his own part in the credit crisis.
But it's troubling that the story begins by him borrowing what he can't afford and barely moves on from there. Instead, he implicates the banks, his credit card and his mephistophelian mortgage broker, not really taking responsibility for his own actions. He squeezes whatever he can from an unsustainable (and finally, broken) system, right up to the last when he waits out a 90-day default so Chase Bank will accept a negotiated settlement.
Forking MYSQL?
This still looks like trouble to me.
"The MySQL relational database system is arguably one of the most important pieces of open source server software in existence" Extract from Ars Technica
The 'free' database, that Oracle now owns, competes with its most important commercial product. If Ellison forces users to buy a license or switch to a 'fork' of the code, the disruption would be enormous.
India against ‘green protectionism’
No to binding targets, no to 'carbon tariffs'.
"India on Thursday urged other emerging countries to oppose developed countries' efforts to force developing nations to make binding commitments on reducing their carbon emissions or pay tariffs, Press Trust of India reporte" Link via Kyodo News
India's opposition will have a big impact on the prospect for any decision in Copenhagen in December.
They’re baaaak
Tourist and business visitor numbers have turned up again. Mostly from Malaysia,China and Hong Kong (and a few NZers). Japanese staying away in droves.
Temperatures in Victoria in April
Temperature anomalies (1961-90) for the month of April since 1950 in the State of Victoria. April 2009 was a little below the standard peg.
Lohengrin
The theme of Wagner's opera (now at the ROH), found in the Second Act. Elsa, pitying the evil Ortrud, leads her into the castle singing confidently: "Es gibt ein Glück, das ohne Reu!" ("There is a joy without regret"). But Ortrud in counterpoint: "Durch ihren Hochmut werd ihr Reu!" ("Her arrogance shall bring her ruth")
Which does the music endorse? Both.
Thailand’s spiral
Sad, brief economic history:
"One of the reasons Thailand has failed to flourish as once predicted is that its growth was built on weaker foundations than supposed." Extract from David Pilling in the Financial Times (subscription)
But is there such a thing as 'weak' or 'strong' foundations for macroeconomic growth?
ADB’s Not-So-Capital Idea
"Why give the development bank more money?" Extract from Wall St Journal (Asia)
The WSJ argues the Asian Development Bank doesn't need a massive re-capitalization (Australia's contribution: $276 million) and lends too much to economies that aren't in need of aid-supported credit.
She Blogged By Night
Great weblog design. Fascinating images—don't miss the bikini-harps in this flick, or Dick Powell looking… well, like Dick Powell.
Dawn, ANZAC day 2009
China’s gold
Shoring up the case?
"China has quietly almost doubled its gold reserves to become the world’s fifth-biggest holder of the precious metal" Extract from Financial Times
Fund’s gloom overdone?
"What is with the International Monetary Fund?"Extract from Lex in the Financial Times
An economic ‘theory of everything’
"There is not, and never will be, an economic theory of everything. Physics may, or may not, be different. But the knowledge we can hope to have in economics is piecemeal and provisional, and different theories will illuminate different but particular situations. We should observe empirical regularities and—as in other applied subjects such as medicine and engineering—we will often find pragmatic solutions that work even though our understanding of why they work is incomplete."Extract from John Kay in the Financial Times
Soon, everything’s a phone
Wifi everywhere:
"At the moment, internet telephony generally works best over wired or WiFi internet connections. Recently, however, VoIP became available for the phone-contract-free iPod Touch, making it functionally as much a phone as the regular iPhone" Extract from Portfolio
