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671. Korea, Colombia, Panama: Pending Trade Accords Offer Economic and Strategic Gains for the United States

Author:
Mauricio Cá¡rdenas and Joshua Meltzer
Publication Date:
07-2011
Content Type:
Policy Brief
Institution:
The Brookings Institution
Abstract:
A trio of trade agreements now pending before Congress would benefit the United States both economically and strategically. Carefully developed accords with South Korea, Colombia and Panama will boost U.S. exports significantly, especially in the key automotive, agricultural and commercial services sectors. Among the other benefits are: increased U.S. competitiveness enhancement of U.S. diplomatic and economic postures in East Asia and Latin America new investment opportunities better enforcement of labor regulation and improved transparency in these trading partners' regulatory systems.
Topic:
Diplomacy, Economics, International Trade and Finance, Treaties and Agreements, and Labor Issues
Political Geography:
Kenya, United States, Israel, Colombia, and Latin America

672. Integration in the Absence of Institutions: China-North Korea Cross-Border Exchange

Author:
Jennifer Lee, Stephan Haggard, and Marcus Noland
Publication Date:
08-2011
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Theory tells us that weak rule of law and institutions deter cross-border integration, deter investment relative to trade, and inhibit trade finance. Drawing on a survey of more than 300 Chinese enterprises that are doing or have done business in North Korea, the authors consider how informal institutions have addressed these problems in a setting in which rule of law and institutions are particularly weak. Given the apparent reliance on hedging strategies, the rapid growth in exchange witnessed in recent years may prove self-limiting, as the effectiveness of informal institutions erodes and the risk premium rises. Institutional improvement could have significant welfare implications, affecting the volume, composition, and financial terms of cross-border exchange.
Topic:
Economics, International Trade and Finance, and Foreign Direct Investment
Political Geography:
Israel

673. Foreign Manufacturing Multinationals and the Transformation of the Chinese Economy: New Measurements, New Perspectives

Author:
Theodore H. Moran
Publication Date:
04-2011
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
What is the relationship between foreign manufacturing multinational corporations (MNCs) and the expansion of indigenous technological and managerial technological capabilities among Chinese firms? China has been remarkably successful in designing industrial policies, joint venture requirements, and technology transfer pressures to use FDI to create indigenous national champions in a handful of prominent sectors: high speed rail transport, information technology, auto assembly, and an emerging civil aviation sector. But what is striking in the aggregate data is how relatively thin the layer of horizontal and vertical spillovers from foreign manufacturing multinationals to indigenous Chinese firms has proven to be. Despite the large size of manufacturing FDI inflows, the impact of multinational corporate investment in China has been largely confined to building plants that incorporate capital, technology, and managerial expertise controlled by the foreigner. As the skill-intensity of exports increases, the percentage of the value of the final product that derives from imported components rises sharply. China has remained a low value-added assembler of more sophisticated inputs imported from abroad—a “workbench” economy. Where do the gains from FDI in China end up? While manufacturing MNCs may build plants in China, the largest impact from deployment of worldwide earnings is to bolster production, employment, R, and local purchases in their home markets. For the United States the most recent data show that US-headquartered MNCs have 70 percent of their operations, make 89 percent of their purchases, spend 87 percent of their R dollars, and locate more than half of their workforce within the US economy—this is where most of the earnings from FDI in China are delivered.
Topic:
Economics, Industrial Policy, International Trade and Finance, and Science and Technology
Political Geography:
United States, China, and Israel

674. Western Aid: The Missing Link for North Korea's Economic Revival?

Author:
Nicholas Eberstadt
Publication Date:
04-2011
Content Type:
Working Paper
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
As the leadership of the Democratic People's Republic of Korea (hereafter DPRK, or North Korea) looks to the future, economic development figures centrally in its officially proclaimed agenda. This year, as it has done every year over the past decade, the government's joint New Year editorial stressed the imperative of economic construction, broadly outlining the sorts of improvements that are to be achieved over the remainder of the current calendar year, and intoned that "The present grand onward march for the improvement of the people's standard of living demands that a full-scale offensive be launched in the overall economic front." But economic growth and development has just taken on a whole new importance in North Korean policy, one that extends beyond rhetoric: this past January, for the first time in over two decades, Pyongyang has formally unveiled a new multi-year economic plan: a 10-year "strategy plan for economic development" under a newly formed State General Bureau for Economic Development. The new economic plan is intended not only to meet the DPRK's longstanding objective of becoming a "powerful and prosperous country" [Kangsong Taeguk] by 2012 (the 100th anniversary of the birth of Kim Il Sung), but also to promote North Korea to the ranks of the "advanced countries in 2020."
Topic:
Development, Economics, and Foreign Aid
Political Geography:
Israel, South Korea, and North Korea

675. A Raid from the Sea: The Gaza Flotilla Attack and Blockade under Legal Scrutiny

Author:
Ufuk Ulutas
Publication Date:
09-2011
Content Type:
Policy Brief
Institution:
SETA Foundation for Political, Economic and Social Research
Abstract:
The publication of the Palmer report written by the panel of inquiry established by the UN Secretary-General Ban Ki-Moon once again brought the 31 May 2010 Gaza Flotilla incident and the blockade of Gaza back to world's attention. On May 31, 2010, Israeli commandos stormed a passenger ship, the Mavi Marmara, the largest boat of a flotilla of six boats which were carrying 10000 tons of humanitarian aid to besieged Gaza, in international high waters. The operation left 9 activists dead and over 30 activists wounded. The Israeli military assault against the Mavi Marmara immediately ignited worldwide protests and condemnation. Turkey, whose citizens were attacked by Israeli soldiers in international high waters, 72 miles away from the Gazan coast, took the lead in protests and condemnation. Israel, however, claimed that the demonstrators on the Mavi Marmara were aiming to break the blockade of Gaza and the Israeli commandos were forced onboard to react in an act of self-defense.
Topic:
Conflict Resolution and Humanitarian Aid
Political Geography:
Turkey, Middle East, Israel, and Arabia

676. The September UN Vote on Palestine: Will the EU Be Up to the Challenge?

Author:
Riccardo Alcaro and Andrea Dessì
Publication Date:
09-2011
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
Frustrated by years of inconclusive peace talks, the Palestinians are turning to the United Nations to gain recognition as an independent state. Their bid is opposed by Israel and the United States, with the latter threatening to block any bid for full UN membership in the UN Security Council. To bypass the US veto, the Palestinians plan to request recognition to the UN General Assembly, where they are sure to get the two-third majority of votes needed for the approval of the resolution. While legally non-binding, a favourable vote in the UNGA would be a political boost for the Palestinians' cause - or so they hope. Full EU backing would give critical political weight to the Palestinians' claim. EU states are deeply divided on the issue of Palestinian membership of the UN but instead of opposing the initiative altogether, the EU has been engaging the Palestinian leadership in the hope of modifying its stance. Should the EU fail to persuade the PA to give up on its request for full UN membership, it should abstain in bloc while tabling a concurring resolution that would spell out clearly the parameters for renewed peace talks.
Topic:
Conflict Resolution, United Nations, and Territorial Disputes
Political Geography:
United States, Europe, Middle East, Israel, and Palestine

677. Israel and Iran's Nuclear Weapon Programme: Roll Back or Containment?

Author:
Massimiliano Fiore
Publication Date:
07-2011
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
The latest IAEA Report suggests that Iran is seeking a nuclear weapon capability. Preventing the Islamic Republic from becoming nuclear is the most important issue on Israel's agenda, and Jerusalem will do everything it can to prevent Tehran from acquiring a nuclear capability. Considering the limited impact of international sanctions and covert operations, it is therefore possible that at some point in the next 12-15 months Israel's policy-makers and military officials will decide whether or not to act militarily to destroy Iran's nuclear facilities. Though the probability of successfully destroying all of Iran's nuclear targets is not very high, Israeli policy-makers and military officials would nevertheless still be extremely satisfied with delaying Iran's nuclear programme. But would it be worth all the trouble it would inevitably unleash? While Israeli fears are understandable, given the heavy costs and poor chances for success of the military option, containment still represents the most sensible policy for Israel.
Topic:
Foreign Policy, Defense Policy, Arms Control and Proliferation, Weapons of Mass Destruction, Sanctions, and Nuclear Power
Political Geography:
Iran, Middle East, and Israel

678. How Israel Can Turn the Unrest in the Middle East into an Opportunity for Peacemaking

Author:
Massimiliano Fiore
Publication Date:
03-2011
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
Only a few weeks ago, no one could have believed that what the peoples of Tunisia and Egypt accomplished was possible: they defied their dictators and won, causing worldwide euphoria and celebration. Yet, while such activism has inspired fellow Arabs throughout the region, it has been met with fear and trepidation in Israel. Mubarak's downfall, combined with the growing unrest in the Middle East, makes it vital for Israel to recalibrate its strategies toward its neighbouring Arab states. Many political analysts believe that this is the ideal moment for Israel to push hard for resuming the stalled peace process with the Palestinians. Yet it is unrealistic to think that a comprehensive agreement can be reached at this time. While the Israeli-Palestinian peace track is very troubled, the Israeli-Syrian track seems more within reach, and in the vital interests of both countries.
Topic:
Peace Studies and Treaties and Agreements
Political Geography:
Middle East, Israel, Arabia, Syria, Egypt, and Tunisia

679. Managing Instability on China's Periphery

Author:
Daniel Markey, Paul B. Stares, Evan A. Feigenbaum, Scott A. Snyder, John W. Vessey, and Joshua Kurlantzick
Publication Date:
08-2011
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
If past experience is any guide, the United States and China will find themselves embroiled in a serious crisis at some point in the future. Such crises have occurred with some regularity in recent years, and often with little or no warning. Relatively recent examples include the Taiwan Strait crisis of 1996, the accidental bombing of the Chinese embassy in Belgrade in 1999, and the EP-3 reconnaissance plane incident in 2001, as well as several minor naval skirmishes since then. The ensuing tension has typically dissipated without major or lasting harm to U.S.-China relations. With China's rise as a global power, however, the next major crisis is likely to be freighted with greater significance for the relationship than in previous instances. Policymakers in both Washington and Beijing, not to mention their respective publics, have become more sensitive to each other's moves and intentions as the balance of power has shifted in recent years. As anxieties and uncertainties have grown, the level of mutual trust has inevitably diminished. How the two countries manage a future crisis or string of crises, therefore, could have profound and prolonged consequences for the U.S.-China relationship. Given the importance of this relationship to not only the future evolution of the Asia-Pacific region but also to the management of a host of international challenges, the stakes could not be higher.
Topic:
Conflict Prevention, Foreign Policy, Arms Control and Proliferation, Diplomacy, and International Trade and Finance
Political Geography:
United States, China, Israel, and Asia

680. Curb Your Enthusiasm: Israel and Palestine after the UN

Publication Date:
09-2011
Content Type:
Working Paper
Institution:
International Crisis Group
Abstract:
In diplomatic lexicon, September 2011 is shorthand for a Palestinian statehood bid at the UN, ensuing Israeli and U.S. retaliation and, in fine, a train-wreck. There are legitimate fears about the fallout, but obsession with what will happen at the UN and the disproportionate energy invested in aborting it are getting in the way of clear thinking. This could well produce a cure more lethal than the ailment. Were Palestinian President Abbas to back down, he could decisively discredit his leadership, embolden his foes and trigger unrest among his people; quickly resuming peace talks as an alternative could lead to a breakdown with consequences far graver than anything that effort might induce. The focus should be on shaping a UN outcome that produces tangible gain for the Palestinians in their quest for statehood while providing some reassurance to Israelis, minimises risks of violence or the Palestinian Authority's collapse and enshrines core principles for a two-state solution. With little time remaining, the burden has shifted to the EU to craft this compromise. It has long sought that role. Now it must live up to it.
Topic:
Peace Studies, Treaties and Agreements, and Territorial Disputes
Political Geography:
Israel and Arabia