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Begin New Search Topic International Trade and Finance Political Geography Global Focus

21. Regulating the International Digital Economy, with Trade and Innovation in Mind

Author:
Douglas Lippoldt
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
The international digital economy is growing rapidly, and the fragmented governance framework is struggling to keep pace. Global entities such as the World Trade Organization and regional trade agreements offer a patchwork approach to governance. This paper illustrates the importance of governance in relation to private-sector innovation and recommends next steps to enhance governance, close gaps and promote further innovation. Better definition and international alignment of the framework for governance of digital trade and data could lead to greater privacy, trust and security.
Topic:
International Cooperation, International Trade and Finance, Regulation, Digital Economy, and Innovation
Political Geography:
Global Focus

22. Have trade agreements been bad for America?

Author:
Alan Wm. Wolff, Robert Z. Lawrence, and Gary Clyde Hufbauer
Publication Date:
12-2022
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
Many Americans are persuaded that trade agreements of the last 40 years have been a costly mistake. To be sure, open markets leave some people behind, and promises to help those hurt were broken. But on balance, expanding trade has greatly benefited the US economy, and policy approaches taken need to be built on rather than abandoned. Alan Wm. Wolff, Gary Clyde Hufbauer, and Robert Z. Lawrence say more must be done to help those harmed, but protectionism is not the solution. The international trading system needs more outspoken US support and leadership if it is to be maintained and improved.
Topic:
International Trade and Finance, Treaties and Agreements, Economy, and Trade
Political Geography:
Global Focus and United States of America

23. How to save the WTO with more flexible trading rules

Author:
Robert Z. Lawrence
Publication Date:
12-2022
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
The clash between the Western and Chinese economic systems is threatening the world trading system, with countries increasingly using trade as a tool to coerce other countries. It is imperative to return to an inclusive, rules-based international trading order before the problems in trade spill over into the other geopolitical frictions that plague the world. This Policy Brief argues for a system that steers between two extremes that have emerged: “deep integration,” a single undertaking in which all members of the World Trade Organization (WTO) are expected to adhere to all rules regardless of their preferences and circumstances, and “decoupling,” in which groups of countries centered on the United States or China limit trade with each other. Instead, Lawrence says, the world trading system should have a “variable geometry” that allows open plurilateral agreements among self-selected members that desire deeper integration on particular issues while allowing members that prefer to implement distinctive domestic policies to remain outside some of these agreements and follow a set of more limited rules. The universal rules would permit diversity but still promote trade between all countries through measures such as safeguards that would deal mainly with the most harmful systemic frictions. If the multilateral system is not up to the task of creating such an approach, it is likely to lose its relevance as differentiated regional or topic groupings become increasingly dominant.
Topic:
Economics, International Trade and Finance, World Trade Organization, Reform, and Trade
Political Geography:
Global Focus

24. The IMF should enhance the role of SDRs to strengthen the international monetary system

Author:
Edwin M. Truman
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
The special drawing right (SDR), issued by the International Monetary Fund (IMF), has the potential to strengthen dramatically the international monetary system. Established in 1969 and allocated twice during its first decade, the SDR was in the institutional closet from 1980 until 2009, when $250 billion in SDRs was allocated to members of the IMF to help address the global financial crisis. In 2021 another $650 billion in SDRs was allocated to help address the coronavirus pandemic. The SDR has proved itself as a crisis instrument. This paper addresses critically the arguments against SDR allocations. It proposes regular annual SDR allocations, along with measures to make the SDR more attractive to critics and measures to build out the SDR system in support of the international monetary system. The paper includes an appendix on the history of the SDR. A second appendix analyzes SDR use following the 2009 and 2021 allocations and finds that contrary to the popular myth, many countries other than low-income members of the IMF benefited directly in multiple ways from those allocations.
Topic:
International Trade and Finance, Financial Crisis, Finance, and IMF
Political Geography:
Global Focus

25. The WTO and vaccine supply chain resilience during a pandemic

Author:
Chad P. Bown
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
Cross-border supply chains and international trade enabled the manufacturing and delivery of billions of vaccine doses to inoculate the world against COVID-19. At the same time, the pandemic revealed how the World Trade Organization (WTO) must change to become more useful in the face of a public health emergency. This paper describes the market failures—especially on the supply side—justifying the domestic subsidies and contracting arrangements used to accelerate vaccine research and development and to increase the scale of vaccine production to save lives, livelihoods, and economic activity during a pandemic. It highlights tradeoffs associated with the US subsidies and the priority-rated contracts written through the Defense Production Act under Operation Warp Speed. This case study reveals a rich environment in which cross-border supply chains exacerbate input shortages in ways that constrain vaccine production, highlighting the need for the WTO to embrace new forms of international policy coordination for pandemic preparedness and response. As part of a pandemic treaty, the paper proposes a plurilateral agreement on vaccine supply chain resilience that would include novel and enforceable disciplines for export restrictions, provisions to trigger coordinated subsidies across countries to jointly scale up vaccine output- and input-production capacity, and market surveillance initiatives on supply chain transparency.
Topic:
International Trade and Finance, Vaccine, COVID-19, WTO, and Supply Chains
Political Geography:
Global Focus

26. CONTAINMENT 2.0: SANCTIONS FOR THE LONG HAUL

Author:
David A. Lake
Publication Date:
03-2022
Content Type:
Commentary and Analysis
Institution:
Political Violence @ A Glance
Abstract:
The West is not imposing coercive sanctions on Russia to stop its current aggression. No one seriously expects that the sanctions will cause President Putin to withdraw from Ukraine. NATO made clear before the war that its members will not defend Ukraine with military force. The European members have also, as expected, carved out exceptions to the sanctions regime for oil and gas so as not to impose too much pain on their own economies. Putin anticipated the general scope of the sanctions likely to be imposed on Russia and decided it was worth invading Ukraine anyways. While he may have been surprised by the extent of the sanctions and unity of NATO so far, this is not enough to alter his calculus. Indeed, he is doubling down on the original plan. He also knows that he has other weapons and forms of coercion against the West up his sleeve. Rather, we are seeing the birth of a possible Containment 2.0, a forced decoupling of Russia from the Western international economy. This is a long-term, not a short-term, strategy. The point is to undermine the Russian economy, stifle its technological progress, deny Russians a standard of living comparable to that of the West, and break support for the regime over time. In doing so, the West undermines Russia’s ability to compete militarily, aiming to forestall further Ukraines, and weakens Putin’s hand at home and abroad.
Topic:
NATO, International Trade and Finance, Sanctions, Economy, and Containment
Political Geography:
Russia, Europe, Ukraine, Global Focus, and United States of America

27. Multilateral Trade Arrangements and Climate Provisions

Author:
Emily Benson, Sparsha Janardhan, and William Alan Reinsch
Publication Date:
04-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
This new paper from the CSIS Scholl Chair in International Business assesses sectoral standards bodies, evaluates environmental provisions in trade agreements, and explores opportunities for addressing climate concerns in newer trade arrangements, such as the recent announcement to negotiate a deal on green steel and aluminum between the European Union and the United States. As this paper seeks to demonstrate, binding agreements with clear enforcement mechanisms are best suited for ensuring that parties meet their climate change obligations as outlined in various bilateral or multilateral agreements. Since concluding agreements that are both binding and have clear enforcement capabilities are not always possible or politically desirable, pursuing a mixed approach—one based on best practices from a diverse set of trade architectures—may be the most viable approach that produces the most tangible outcomes. This paper evaluates climate provisions in trade architectures and makes recommendations for including climate provisions, including sectoral standards, in trade arrangements in a way that encourages increased multilateral collaboration in a WTO-compliant manner.
Topic:
Climate Change, International Cooperation, International Trade and Finance, and Multilateralism
Political Geography:
Global Focus

28. Convergence and Divergence: Multilateral Trade and Climate Agendas

Author:
William Alan Reinsch and Emily Benson
Publication Date:
03-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
If the international community wants to make meaningful progress ahead of the 2030 deadline—which critics argue is still too late to avert global catastrophe—major global players should work together to reduce emissions at home and abroad. This paper discusses the politics of climate policy in the United States and how it is influenced by relationships with the European Union and China. It analyzes these international relationships through specific policies, namely subsidies, and assesses their reduction or removal in some cases and their reallocations in others. It also evaluates the politics and policy implications of carbon border adjustments, including their compliance with existing WTO rules. These trade policies allude to domestic industrial policies and how they can be adjusted to better combat climate change while complying with existing trade rules. In outlining policy options for the United States’ trade agenda, including how the European Union and China factor into these options, the paper assesses the probability that certain climate policies will ultimately materialize. The paper argues that unilateralism is insufficient and counterproductive in both trade and climate and that only through multilateral, legally compliant policy convergence can countries stave off environmental and economic collapse.
Topic:
Climate Change, Environment, International Trade and Finance, Multilateral Relations, and Multilateralism
Political Geography:
Global Focus

29. Measuring illicit financial flows: A gravity model approach to estimate international trade misinvoicing

Author:
Lourenço S. Paz
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Illicit financial flows have recently attracted the attention of academia, practitioners, and multilateral organizations who consider them harmful to economic development. Some observers suggest that many of these flows occur via the misinvoicing of international trade transactions. This study develops a novel methodology based on the gravity model of international trade to estimate illicit financial flows using publicly available product-level international trade data. It contributes to the literature by estimating product-level transportation and insurance costs and providing, for the first time, an estimation for all countries of an upper bound of the values of export and of import over- and under-misinvoicing separately, without resorting to assumptions about trade statistics reliability. Application of the methodology is illustrated using six-digit product-level UN Comtrade data for 2013–16. The results indicate that misinvoicing is not confined to a few products or countries but is a widespread phenomenon that deserves future research.
Topic:
International Trade and Finance, Transportation, Illicit Financial Flows, and Misinvoicing
Political Geography:
Global Focus

30. The Strategic Implications of the Tashkent Conference

Author:
Urs Unkauf
Publication Date:
01-2022
Content Type:
Journal Article
Journal:
Baku Dialogues
Institution:
ADA University
Abstract:
This essay is devoted to a consideration of a matter of fundamental geopolitical importance that has gone largely unnoticed in the West, to its detriment. The trigger event, so to speak, was a remarkable conference that took place not in Washington, Brussels, or Moscow—but in Tashkent. On 15‑16 July 2021, Uzbekistan’s capital hosted delegations from nearly 50 countries, among them China, Russia, India, Turkey, Azerbaijan, and all the Central Asia countries, at the level of foreign ministers or above. To understand the issues at play and the consequences thereof, we will need to spend some time discussing what actually took place during the conference itself, which was entitled “Central and South Asia: Regional Connectivity: Challenges and Opportunities.” In addition to relating the explicit agenda of the conference, we will also examine its broader agenda (whether intended or not) and conclude with an examination of its potentially far‑reaching geostrategic implications. The Tashkent conference was geared not only to government officials, but also towards leading scholars, experts, and media representatives from all over the world who follow developments in at least one of these two regions. In his opening address, Uzbekistan’s President Shavkat Mirziyoyev affirmed his country’s readiness to take up new leadership responsibilities in the region, which aligns with the domestic economic and social reform agenda he launched upon coming to power following the death of his predecessor, Islam Karimov, in September The Strategic Implications of the Tashkent Conference 2016. The host’s speech was followed by opening statements from Afghanistan’s President Ashraf Ghani and Pakistan’s Prime Minister Imran Khan, whose delegations also exchanged informal views during the conference. Here a somewhat digressive remark is in order. When the conference was in its planning stage, the fall of the Ghani government in Afghanistan had not been anticipated. Still, one of the conference’s working group sessions was devoted to the devolving situation in Afghanistan. By that stage, the conference’s more astute participants were seeing the writing on the wall. Those who could not, of course, came to their senses less than a month later. Either way, the Taliban’s takeover of the country has put both Central and South Asia more firmly on the international geopolitical agenda— the recent events in Kazakhstan, which began as this issue of Baku Dialogues was being finalized, have also played a role in drawing attention back to the Silk Road region. But to come back to Mirziyoyev’s opening address. In the context of announcing a new, open foreign policy strategy for the country, Uzbekistan’s President made it clear that his country is centrally focused on strengthening regional connectivity. His announcement stressed that the focus would be on further deepening economic and cultural cooperation between Central Asia and South Asia—two regions that are linked historically as well as economically yet have not so far been able to transform this inherited potential towards proper policymaking in recent years. The Tashkent conference was advertised as being about enhancing regional interconnectivity, trade, and cooperation between Central Asia and South Asia—as well as presenting the host country’s new cross‑regional foreign policy strategy. But as Edward Lemon wrote in the Fall 2021 edition of Baku Dialogues, the conference also served to demonstrate that the emerging regionalism—a topic raised by the concerning countries themselves and not from outside—will be a leitmotif for future geostrategic developments in the Silk Road region.
Topic:
Diplomacy, International Trade and Finance, Infrastructure, Geopolitics, and Silk Road
Political Geography:
Global Focus