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1451. Agricultural Dumping Under NAFTA: Estimating the Costs of U.S. Agricultural Policies to Mexican Producers

Author:
Timothy A. Wise
Publication Date:
12-2009
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
With the opening of the Mexican economy under the North American Free Trade Agreement (NAFTA), Mexican agriculture came under new competitive pressures from U.S. exports. It was widely recognized at the beginning of NAFTA that Mexico had geographically-based comparative advantages in supplying off-season fruits and vegetables to a hungry U.S. market. NAFTA's liberalization of agricultural trade produced the expected results, with more staple crops and meats flowing south and more seasonal fruits and vegetables flowing north. In agriculture, tariffs and quotas have now mostly been eliminated. Not so agricultural subsidies, which were left largely undisciplined by NAFTA. High U.S. farm subsidies for exported crops, which compete with Mexican products, have prompted charges that the level playing field NAFTA was supposed to create is in fact tilted heavily in favor of the United States.
Topic:
Agriculture, International Trade and Finance, and Treaties and Agreements
Political Geography:
United States and North America

1452. Closing the Mission Gap: Effectively Communicating the President's New Afghanistan Strategy

Author:
Andy Johnson, Kyle Spector, Scott Payne, and Matt Bennett
Publication Date:
12-2009
Content Type:
Policy Brief
Institution:
Third Way
Abstract:
Speaking at West Point, President Obama clarified America's mission in Afghanistan and announced a new strategy designed to defeat al Qaeda, respond to the security threat posed by chaos in the Afghanistan-Pakistan region, and set a clear path for turning the war over to the Afghans. Third Way believes that the President's approach is worthy of strong support from Congress and other leaders.
Topic:
Foreign Policy and Military Strategy
Political Geography:
Pakistan, Afghanistan, United States, and North America

1453. New Transatlantic Compact for NATO

Author:
Kurt Volker
Publication Date:
12-2009
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
Twenty years after the fall of the Berlin Wall, NATO stands at a crossroads. Will it reinvent itself yet again, to serve as the foundation for the security and defense of Europe and North America in a world of diverse, non-conventional threats, many of which come from outside of Europe? Will it return to a passive, geographically defined approach of protecting the territory of European Allies against armed attack? Will it merge these visions into a new hybrid? Will it retain the political will and resource commitments of its members, whether in Europe or North America?
Topic:
NATO, International Cooperation, and Reform
Political Geography:
Europe and North America

1454. Alliance Reborn: An Atlantic Compact for the 21st Century

Author:
Hans Binnendijk, Julianne Smith, Daniel Hamilton, Charles Barry, Stephen Flanagan, and James Townsend
Publication Date:
01-2009
Content Type:
Working Paper
Institution:
Atlantic Council
Abstract:
We have an open but fleeting moment to forge a more effective Atlantic partnership. We must seize it now. European and North American allies have allowed their relations to become discordant, yet the times demand vigor and unity. Courageous decisions need to be taken to breathe new life and relevance into the Atlantic partnership, which must be recast to tackle a diverse range of serious challenges at home and abroad.
Topic:
International Cooperation, Border Control, and Reform
Political Geography:
Europe, North America, and Atlantic Ocean

1455. NATO and the Economic and Financial Crisis

Author:
Keith Hartley and Binyam Solomon
Publication Date:
10-2009
Content Type:
Working Paper
Institution:
NATO Defense College
Abstract:
These is some consensus among economic forecasters and international economic organizations that the world economy is stabilizing after the worst global contraction since the end of the Second World War. While it is difficult to ascertain empirically whether the massive fiscal policy support played a role or not, the improving credit conditions and the return of demand in the housing market in North America and the UK point to some evidence that the stimulus is providing the necessary short-term boost. Nonetheless, there remain significant challenges that may constrain a quick recovery including the decline in household wealth (debt-laden consumers rebuilding their savings), persistent unemployment and deleveraging (decreasing the amount of debt a firm holds by paying it off) in the financial system together with future long-term prospects of inflation.
Topic:
Economics, International Trade and Finance, and Financial Crisis
Political Geography:
United Kingdom and North America

1456. Biofuels Impact on Crop and Food Prices: Using an Interactive Spreadsheet

Author:
Scott Baier, Mark Clements, and Jane Ihrig
Publication Date:
03-2009
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
This paper examines the effect that biofuels production has had on commodity and global food prices. The innovative contribution of this paper is the interactive spreadsheet that allows the reader to choose the assumptions behind the estimates. By allowing the reader to choose the country, time period, supply and demand elasticities, and the size of indirect effects we explicitly illustrate the sensitivity of the estimated effect of biofuels production on prices. Our best estimates suggest that the increase in biofuels production over the past two years has had a sizeable impact on corn, sugar, barley and soybean prices, but a much smaller impact on global food prices. Over the past two years (ending June 2008), we estimate that the increase in worldwide biofuels production pushed up corn, soybean and sugar prices by 27, 21 and 12 percentage points respectively. The countries that account for most of the upward pressure on these prices are the United States and Brazil. Our best estimates suggest that the increase in U.S. biofuels production (ethanol and biodiesel) pushed up corn prices by more than 22 percentage points and soybean prices (soybeans and soybean oil) by more than 15 percentage points, while the increase in EU biofuels production pushed corn and soybean prices up around 3 percentage points. Brazil’s increase in sugar-based ethanol production accounts for the entire rise in the price of sugar. Although biofuels had a noticeable impact on individual crop prices, they had a much smaller impact on global food prices. Our best estimate suggests that the increase in worldwide biofuels production over the past two years accounts for just over 12 percent of the rise in the IMF’s food price index. The increase in U.S. biofuels production accounts for roughly 60 percent of this effect, while Brazil accounts for 14 percent and the EU accounts for 15 percent. The key take- away point is that nearly 90 percent of the rise in global food prices comes from factors other than biofuels.
Topic:
Energy Policy, Food, Biofuels, and Ethanol
Political Geography:
United States, Brazil, South America, and North America

1457. The Impact of Macroeconomic Announcements on Real Time Foreign Exchange Rates in Emerging Markets

Author:
Fang Cai and Hyunsoo Joo
Publication Date:
05-2009
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
This paper utilizes a unique high-frequency database to measure how exchange rates in nine emerging markets react to macroeconomic news in the U.S. and domestic economies from 2000 to 2006. We find that major U.S. macroeconomic news have a strong impact on the returns and volatilities of emerging market exchange rates, but many domestic news do not. Emerging market currencies have become more sensitive to U.S. news in recent years. We also find that market sentiment could sway the impact of news on these currencies systematically, as good (bad) news seems to matter more when optimism (pessimism) prevails. Market uncertainty also interacts with macroeconomic news in a statistically significant way, but its role varies across currencies and news.
Topic:
Emerging Markets, Exchange Rate Policy, and Macroeconomics
Political Geography:
North America and United States of America

1458. Did Easy Money in the Dollar Bloc Fuel the Global Commodity Boom?

Author:
Christopher Erceg, Luca Guerrieri, and Steven B. Kamin
Publication Date:
08-2009
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Among the various explanations for the runup in oil and commodity prices of recent years, one story focuses on the role of monetary policy in the United States and in developing economies. In this view, developing countries that peg their currencies to the dollar were forced to ease their monetary policies after reductions in U.S. interest rates, leading to economic overheating, excess demand for oil and other commodities, and rising commodity prices. We assess that hypothesis using the Federal Reserve staff’s forward-looking, multi- country, dynamic general equilibrium model, SIGMA. We find that even if many developing country currencies were pegged to the dollar, an easing of U.S. monetary policy would lead to only a transitory runup in oil prices. Instead, strong economic growth in many developing economies, as well as shortfalls in oil production, better explain the sustained runup in oil prices observed until earlier this year. Moreover, a closer look at exchange rates and interest rates around the world suggests that the monetary policies of many developing economies, including in East Asia, are less closely influenced by U.S. policies than is frequently assumed.
Topic:
Energy Policy, Oil, Commodities, and Interest Rates
Political Geography:
United States and North America

1459. A Smart Alliance in the Age of Complexity

Author:
Seongho Sheen
Publication Date:
06-2009
Content Type:
Working Paper
Institution:
East Asia Institute (EAI)
Abstract:
The alliance between the Republic of Korea and the United States today faces a complex security environment, in which the threats it confronts are more diverse, more complicated, and require a more delicately balanced approach than ever before. In particular, expectations—even demands—are growing for South Korea to contribute to world peace and stability as a global partner for the United States in pursuing their mutual security interests (Campbell et al. 2009). Do the ROK and the United States share enough strategic interests to sustain such an alliance in the twenty-first century? And should South Korea assume an increasing role in maintaining regional and global peace? During the Cold War, the two countries' alliance was a military one, focused on the clear and direct threat from North Korea. Now, in the twenty-first century, the two security partners must transform their hard alliance into a "smart" alliance to meet more diverse security challenges together. A different set of hard and soft approaches are required, and a smart alliance will call for a more flexible combination of roles played by each partner, depending on the circumstances.
Topic:
Security, Diplomacy, International Cooperation, and Military Strategy
Political Geography:
Asia, South Korea, North Korea, North America, and United States of America

1460. Assessment and Future Challenges of the U.S.-ROK Summit: From a Policy of Sanctions to a Policy of `Coevolution`

Author:
EAI Security Net
Publication Date:
06-2009
Content Type:
Working Paper
Institution:
East Asia Institute (EAI)
Abstract:
Since the end of the Cold War, the U.S.-ROK alliance has gone through the greatest and most rapid changes in its fifty-six-year history. Yet the United States and South Korea have both failed to establish any strategic "Joint Vision" for the alliance in this new era. The Roh Moo-hyun administration dealt with many issues of alliance transformation. These included the relocation of U.S. military bases, the transfer of Wartime Operational Control (WOC) from the United States to South Korea, and efforts to facilitate the strategic flexibility of U.S. forces in Korea. None of these changes, however, were fully based on any shared strategic vision between the two countries; rather, the alterations were limited bottom-up approaches. The Lee Myung-bak administration has managed to restore the previously damaged U.S.-ROK relations with the Bush administration in 2008. It also dealt with many issues affecting the future of the alliance. But an overall reenvisioning of the alliance only came about under the current Lee-Obama partnership. The culmination of the June 2009 U.S.-ROK Summit was the joint statement released by the two presidents entitled "Joint Vision for the Alliance of the U.S. and the ROK." This statement has been long overdue. It set out clearly the security problem confronting the two countries, and established their shared strategic interests. In a simple and concise way, the "Joint Vision" laid out the future direction of the alliance in a wide range of areas, including not only military issues but also international values, the economy, the environment, and human rights. Fundamentally, the document recognized that the geographic range of the alliance has expanded globally, beyond both the Korean Peninsula and the Asia-Pacific region. The future of the alliance is significant not just for the United States but also for South Korea. Korea’s diplomatic outlook can no longer be limited to the Peninsula, because its national power has matured enough to warrant a new diplomatic strategy in its approach to its region and the world. As part of this vision, the Lee administration has issued a new strategic motto, "Global Korea." But the government still has a long way to go. It needs a more complete set of specific policies supported by a strong domestic consensus. The new vision for the U.S.-ROK alliance will help facilitate South Korea’s diplomatic leap forward. At this critical time, the United States needs assistance from its allies, including South Korea. Currently, global leadership faces numerous transnational problems such as the unprecedented global economic crisis, an insurgency in Afghanistan that is at its highest levels since the U.S. invasion in 2001, and a weakened U.S. global leadership in need of revitalization. If these major challenges are to be met, the "Joint Vision" needs to be converted into specific policies. The recent summit allowed a comprehensive discussion of both the new vision’s principles and the issues related to those principles, including the North Korean nuclear crisis, provisions for the global role of the alliance, and nonmilitary issues like the KORUS FTA (Korea-United States Free Trade Agreement). Naturally, given today’s circumstances, the North Korean nuclear program dominated the meetings. President Obama and President Lee have found considerable common ground in setting the strategic goals and policy direction that will be required to resolve the nuclear issue.
Topic:
Security, Diplomacy, International Cooperation, Military Strategy, and Sanctions
Political Geography:
Asia, South Korea, North America, and United States of America