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6601. Next Move in Steel: Revocation or Retaliation?

Author:
Gary Clyde Hufbauer and Ben Goodrich
Publication Date:
10-2003
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
In May 2003, the World Trade Organization (WTO) dispute panel ruled that US steel safeguards imposed in March 2002 are illegal. The WTO Appellate Body is all but certain to confirm the panel's judgment, probably by December 2003. Then the Bush administration will face an important choice. It can keep the safeguards in place, pleasing steel producers and important constituencies in West Virginia, Pennsylvania, and Ohio. However, doing so would further anger steel users, who have probably lost more business and jobs as a direct consequence of the safeguards than steel producers have gained. Maintaining the safeguards would also send a signal to the world's trading nations that the United States is not prepared to endure the political cost of eliminating steel protection. Furthermore, the administration would run the risk that, in the middle of a presidential election season, foreign countries will exercise their rights under the WTO to retaliate.
Topic:
Government and International Trade and Finance
Political Geography:
United States, Pennsylvania, Ohio, and West Virginia

6602. EU Accession and the Euro: Close Together or Far Apart?

Author:
Peter B. Kenen and Ellen E. Meade
Publication Date:
10-2003
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
In May 2004, ten countries are due to join the European Union. They are therefore obliged to join the European Monetary Union (EMU) and adopt the euro as their national currency. Most of them, moreover, have been eager to do that. None of them sought an opt-out of the sort that Britain and Denmark obtained in 1991, when the Maastricht Treaty was drafted. Membership in EMU is not automatic, however, because the accession countries must first satisfy the preconditions contained in the Maastricht Treaty. Although those preconditions are rigorous, and some of the accession countries are still far from meeting them, most of those countries have indicated that they want to enter EMU at the earliest possible date.
Topic:
Economics and International Trade and Finance
Political Geography:
Britain, Europe, and Denmark

6603. More Pain, More Gain: Politics and Economics of Eliminating Tariffs

Author:
Gary Hufbauer and Ben Goodrich
Publication Date:
06-2003
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
A good proposal to eliminate tariffs must take into account both the pain and gain that developing countries are likely to experience. The authors take the measure of these costs and benefits and urge rich countries to maximize the benefits to developing countries while giving them ample time to accept, and adjust to, the changes that trade liberalization will require. But trade liberalization should not stop with tariff proposals. The United States and other industrial countries should generously reduce subsidies to farmers and eliminate nontariff barriers on agricultural imports. The United States should offer more concessions on services trade, particularly in its allowances for temporary foreign workers. Unless rich countries put more on the table, a WTO agreement to eliminate tariff barriers may be postponed for years.
Topic:
Economics, International Trade and Finance, Political Economy, and Third World
Political Geography:
United States

6604. Rules Against Earnings Stripping: Wrong Answer to Corporate Inversions

Author:
Gary Hufbauer and Ariel Assa
Publication Date:
05-2003
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The tax-driven expatriation of US corporations is a troubling phenomenon. In a “corporate inversion,” a new foreign corporation, typically located in a low-tax or no-tax country, replaces the existing US parent corporation of a multinational enterprise (MNE). The US corporation then becomes a subsidiary of the new foreign parent. Since the US tax treatment of an MNE operating in the United States is significantly less favorable when the top-tier parent corporation is a domestic rather than a foreign corporation, the inversion transaction averts a substantial amount of US tax. Inversions have attracted adverse attention from tax specialists, media, the US Treasury Department, and Congress. In the wake of September 11, it seemed downright unpatriotic for US firms to invert as a way of skimping on their tax payments.
Topic:
Economics, Government, and International Trade and Finance
Political Geography:
United States

6605. The Strategic Importance of US-Korea Economic Relations

Author:
Marcus Noland
Publication Date:
05-2003
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Despite the passage of 50 years since an armistice ended military hostilities, the Korean peninsula remains divided, a Cold War vestige that seemingly has been unaffected by the evolution that has occurred elsewhere. If anything, US confrontation with North Korea—a charter member of its “axis of evil”—has intensified in recent years. Yet today, increasing numbers of South Koreans, accustomed to living for decades in the shadows of the North's forward-deployed artillery, do not regard the North as a serious threat. Growing prosperity and confidence in the South, in marked contrast to the North's isolation and penury, have transformed fear and loathing into pity and forbearance. Instead, it is the United States, an ocean away, that regards the North and its nuclear weapons program with alarm. As the United States has focused on the nuclear program, its ally, South Korea, has observed the North Koreans' nascent economic reforms and heard their talk of conventional forces reduction, and the gap in the two countries' respective assessments of the North Korean threat has widened dangerously, threatening to undermine their alliance.
Topic:
Security and International Trade and Finance
Political Geography:
United States, Israel, East Asia, Asia, South Korea, North Korea, and Korea

6606. The Impact of Economic Sanctions on US Trade: Andrew Rose's Gravity Model

Author:
Gary Clyde Hufbauer and Barbara Oegg
Publication Date:
04-2003
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
With the end of the Cold War, the focus of US foreign policy changed—and so did that of economic sanctions. Partly because of increased cooperation within the UN framework, economic sanctions were imposed so routinely in the early 1990s that scholars called that period the sanctions decade. This proliferation sparked intense debate about the effectiveness of sanctions as a policy tool and moved US sanctions policy to the center of public discourse.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
United States

6607. Economic Leverage and the North Korean Nuclear Crisis

Author:
Kimberly Ann Elliott
Publication Date:
04-2003
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Almost a decade ago, as the last nuclear crisis with North Korea was reaching a peak, I concluded the following about the potential utility of economic sanctions: The debate over US policy toward North Korea boils down to one deceptively simple question: what does Kim Il-sung want? No one can be sure of the answer and different interpretations have quite different policy implications. If the Great Leader views a nuclear weapons option as important to the survival of his regime, economic sanctions are unlikely to force him to give it up. But if he views the threat of developing nuclear weapons as a bargaining chip, some combination of carrots and sticks may induce him to trade it away.
Topic:
Diplomacy, Economics, and International Trade and Finance
Political Geography:
Israel, East Asia, and North Korea

6608. Steel Policy: The Good, the Bad, and the Ugly

Author:
Gary C. Hufbauer and Ben Goodrich
Publication Date:
01-2003
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
While the US steel industry has been in distress for decades, the “steel crisis” of 1999-2001 was particularly acute. More than 30 steel producing and steel processing firms fell into bankruptcy between 1997 and 2001, and most of the failures occurred after President Bush took office. During his presidential campaign, Bush promised steelworkers that he would not neglect them. As the crisis worsened, the steel industry and the United Steel Workers of America (USWA) pressed the Bush administration to make good on its campaign promise.
Topic:
Government, Industrial Policy, and International Trade and Finance
Political Geography:
United States and America

6609. Bolivia: A Revolt That Leads Nowhere

Author:
Mark Falcoff
Publication Date:
12-2003
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Joseph Conrad's novel Nostromo: A Tale of the Seaboard (1905), considered by many the Polish master's best novel, is set in the fictitious South American country of Costaguana. During the colonial period and for decades thereafter, the republic flourished thanks to the existence of a rich vein of silver mined since the early days of the Spanish conquest. At the time the novel opens, however, Costaguana has fallen on hard times because the most accessible deposits of the precious ore have been exhausted; massive new investment and technology are required to return the mine to full operation. Anglo-Costaguanan Charles Gould finds the necessary financing in London and New York, and almost as if by magic the resumption of mining breathes new life and progress into the republic.
Topic:
International Relations, International Trade and Finance, and Political Economy
Political Geography:
New York, London, South America, and Bolivia

6610. Venezuela: Raising the Stakes

Author:
Mark Falcoff
Publication Date:
11-2003
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
It's official: the long-awaited referendum on Venezuela's president Hugo Chávez will take place on February 29, 2004—if all the requirements laid down by the National Electoral Council are met. Theoretically this should put to rest once and for all the question of whether Venezuelans want their president to continue in office and should make possible the selection of a replacement thirty days thereafter should he fail to win the referendum.
Topic:
International Relations, International Trade and Finance, and Political Economy
Political Geography:
South America