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62. NAFTA Termination: Legal Process in Canada and Mexico
- Author:
- Tetyana Payosova, Gary Clyde Hufbauer, and Euijin Jung
- Publication Date:
- 04-2018
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The mechanics of US withdrawal from the North American Free Trade Agreement (NAFTA) have been widely explored, with an emerging consensus among legal experts that President Donald Trump does have the authority to pull out of the accord. This Policy Brief examines the legal procedures in Canada and Mexico in the event that either country decides to withdraw or terminate NAFTA. Relative to the United States, Canada and Mexico have clearer legal procedures. To terminate NAFTA in Canada, the Department of International Trade would send the notice to withdrawal upon approval by the Cabinet and the Order in Council. In Mexico, the president can notify withdrawal from NAFTA under Article 2205, following Senate approval. To raise tariffs to the MFN level, Canada requires amendment of federal statutes that requires passage in both chambers of the Parliament through regular procedures. To raise its tariffs, Mexico requires a bill to amend federal legislation that has the approval of the Senate and the Chamber of Deputies.
- Topic:
- International Political Economy
- Political Geography:
- Canada and Mexico
63. How to Solve the Greek Debt Problem
- Author:
- Jeromin Zettelmeyer et al
- Publication Date:
- 04-2018
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Greece’s debt currently stands at close to €330 billion, over 180 percent of GDP, with almost 70 percent owed to European official creditors. The fact that Greece’s public debts must be restructured is by now widely accepted. What remains controversial, however, is the extent of debt relief needed to make Greece’s debt sustainable.
- Topic:
- International Political Economy and International Affairs
- Political Geography:
- Greece
64. IMF Quota and Governance Reform Once Again
- Author:
- Edwin M. Truman
- Publication Date:
- 03-2018
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Once again, the United States and other members of the International Monetary Fund (IMF) have been asked to address the adequacy of IMF financial resources and the distribution of voting power in the Fund. Observers are justified in thinking that they just witnessed this drama. IMF members completed an agreement on the size of IMF quota resources and governance—or voting power—reform in November 2010. As part of that agreement on the 14th general review of IMF quotas, members committed to bring forward the completion of the 15th general review of quotas to January 2014. The target was not met because the United States delayed approving the 2010 agreement until December 2015, which was necessary for the implementation of the 14th review. As a result, in December 2016, the governors of the IMF freshly resolved to complete the 15th review by the spring of 2019 or the fall of 2019 at the latest.
- Topic:
- International Affairs
- Political Geography:
- Global Focus
65. The Case for Raising de minimis Thresholds in NAFTA 2.0
- Author:
- Gary Clyde Hufbauer, Euijin Jung, and (Lucy) Lu Zhiyao
- Publication Date:
- 03-2018
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The fraught negotiations over revising the North American Free Trade Agreement (NAFTA) have focused largely on US demands to limit imports from Canada and Mexico. But one little discussed step could help the United States increase exports to Canada and Mexico in a way the Trump administration ought to support. US express shipments to its NAFTA partners are far below potential, partly due to what are called low de minimis thresholds in those countries. The de minimis threshold refers to the value of imported goods below which no duty or tax is collected, and the customs declaration is very simple.
- Topic:
- International Affairs
- Political Geography:
- Global Focus
66. Can a Country Save Too Much? The Case of Norway
- Author:
- Joseph Gagnon
- Publication Date:
- 03-2018
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Many countries have squandered their natural resource endowments. The International Monetary Fund and the World Bank routinely hector developing economies to save and invest more of their revenues from resources such as oil and gold for the benefit of future generations after the resources run out. But, can a country save too much of its resource revenues? Gagnon argues that since the first capital transfers to its Government Pension Fund Global in 1996, Norway has saved more than was needed to raise consumption of all generations equally. Norway’s excess saving imposes a cost on the rest of the world during periods of weak aggregate demand and ultralow interest rates. Gagnon proposes a counterfactual saving policy that would have increased Norway’s household consumption by nearly 9 percent on average from 1996 through 2017. The proposed policy would have reduced Norway’s current account surplus by more than one-third, or $13 billion per year on average, from 1996 through 2017. Even now, Norway could raise current consumption by more than US$2,000 per capita, while keeping the contribution of oil wealth to future generations equally large.
- Topic:
- International Affairs
- Political Geography:
- Norway
67. Five Reasons Why the Focus on Trade Deficits Is Misleading
- Author:
- Robert Z. Lawrence
- Publication Date:
- 03-2018
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- President Trump has asserted that trade balances are a key measure of a nation’s commercial success and that large US trade deficits prove that past trade approaches have been flawed. But trade deficits are not in fact a good measure of how well a country is doing with respect to its trade policies. Many of the assumptions on which the administration’s beliefs rest are not supported by the evidence. This Policy Brief argues that trade deficits are not necessarily bad, do not necessarily cost jobs or reduce growth, and are not a measure of whether foreign trade policies or agreements with other countries are fair or unfair. Efforts to use trade policy and agreements to reduce either bilateral or overall trade deficits are also unlikely to produce the effects the administration claims they will and instead lead to friction with US trading partners, harming the people the policies claim to help
- Topic:
- International Political Economy
- Political Geography:
- Global Focus
68. The Dispute Settlement Crisis in the World Trade Organization: Causes and Cures
- Author:
- Tetyana Payosova, Gary Clyde Hufbauer, and Jeffrey Schott
- Publication Date:
- 03-2018
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Since its inception in 1995, the World Trade Organization’s (WTO) dispute settlement mechanism has resolved an impressive number of trade disputes and has earned a reputation as the “crown jewel” of the global trading system. Today, however, the mechanism is in crisis. WTO members have failed to negotiate updates to the rulebook, including rules on dispute settlement itself. As a result, the WTO Appellate Body increasingly is asked to render decisions on ambiguous or incomplete WTO rules. Its interpretations of such provisions have provoked charges by the United States and others that binding Appellate Body rulings, which establish precedents for future cases, effectively circumvent the prerogative of member countries to revise the WTO rulebook and thus undercut the national sovereignty of WTO members. For the past few years, US officials have blocked appointments of Appellate Body members to force WTO members to negotiate new rules that address US concerns and limit the scope for judicial overreach. If this problem is not resolved, the Appellate Body soon will not have enough members to review cases and the vaunted WTO dispute settlement system will grind to a halt.
- Topic:
- International Affairs
- Political Geography:
- Global Focus
69. Why Has the Stock Market Risen So Much Since the US Presidential Election?
- Author:
- Olivier Blanchard, Christopher G. Collins, Mohammad R Jahan-Parvar, and Thomas Pellet
- Publication Date:
- 03-2018
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Immediately following the US presidential election in November 2016, many economists were concerned that increased uncertainty over economic policy would lead to a decline in the US stock market. From the time of the election to the end of 2017, however, the stock market, as measured by the Standard and Poor's (S&P) 500 index, increased by about 25 percent. Price swings since then have led investors and economists to increasingly ask: Was the stock market rise justified by an increase in actual and expected future dividends, or did it reflect unhealthy price developments, which may reverse in the future?
- Topic:
- International Political Economy
- Political Geography:
- Global Markets
70. The New Tax Law’s Impact on Inequality
- Author:
- William R Cline
- Publication Date:
- 02-2018
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The centerpiece of the Tax Cuts and Jobs Act (TCJA) of 2017 is the reduction in the corporate tax rate from 35 percent to 21 percent. The Joint Committee on Taxation has estimated the net revenue loss from the tax overhaul at $1 trillion over the next decade. The underlying premise of the legislation is that lower corporate taxes will spur growth, with trickle-down wage benefits that spread the resulting economic gains.
- Topic:
- International Affairs
- Political Geography:
- Global Focus