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33631. Revitalizing the Economies of Japan and the United States

Author:
C. Fred Bergsten
Publication Date:
06-2003
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
The United States and Japan are the two largest national economies in the world. Since the early 1990s, they have been moving in opposite directions. The United States enjoyed an expansion of record duration from the end of the Gulf War in 1991 until early 2001, growing much faster than any other G-7 country and much faster than it had at any time since the Second World War. Japan's economy, by contrast, has been virtually stagnant since its financial bubble burst in the early 1990s and has clearly experienced its worst performance since its recovery from the ravages of the Pacific War.
Topic:
Economics and International Trade and Finance
Political Geography:
United States, Japan, Israel, and East Asia

33632. NAFTA Dispute Settlement Systems

Author:
Gary Hufbauer and Jeffrey J. Schott
Publication Date:
06-2003
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Drawing on the 1989 Canada-US Free Trade Agreement (CUSFTA), the North American Free Trade Agreement (NAFTA) extended dispute settlement provisions to cover more ground. In fact, within NAFTA there are six dispute settlement systems. NAFTA Chapter 11 is designed to resolve investor-state disputes over property rights; Chapter 14 creates special provisions for handling disputes in the financial sector via the Chapter 20 dispute settlement process (DSP); Chapter 19 establishes a review mechanism to determine whether final antidumping (AD) and countervailing duty (CVD) decisions made in domestic tribunals are consistent with national laws; and Chapter 20 provides government-to-government consultation, at the ministerial level, to resolve high-level disputes. In addition, the NAFTA partners created interstate dispute mechanisms regarding domestic environmental and labor laws under the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAAL C), respectively. This chapter examines the first four dispute settlement systems; the NAAEC and NAALC systems are evaluated elsewhere in this book.
Topic:
Economics and International Trade and Finance
Political Geography:
United States, Latin America, and North America

33633. Survival of the Best Fit: Exposure to Low-Wage Countries and the (Uneven) Growth of US Manufacturing Plants

Author:
J. Bradford Jensen, Andrew B. Bernard, and Peter K. Schott
Publication Date:
05-2003
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper examines the role of international trade in the reallocation of U.S. manufacturing activity within and across industries from 1977 to 1997. It introduces a new measure of industry exposure to international trade, motivated by the Heckscher-Ohlin model, which focuses on where imports originate rather than their overall level. Results demonstrate that plant survival as well as output and employment growth are negatively associated with the share of industry imports sourced from the world's lowest-wage countries. Within industries, activity is reallocated towards capital-intensive plants. Plants are also more likely to alter their product mix (i.e. switch industries) in response to trade with low-wage countries. Plants altering their product mix switch to industries that are more capital-and skill-intensive.
Topic:
Economics, Government, and International Trade and Finance
Political Geography:
United States

33634. Falling Trade Costs, Heterogeneous Firms, and Industry Dynamics

Author:
J. Bradford Jensen, Andrew B. Bernard, and Peter K. Schott
Publication Date:
05-2003
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper examines the response of industries and firms to changes in trade costs. Several new firm-level models of international trade with heterogeneous firms predict that industry productivity will rise as trade costs fall due to the reallocation of activity across plants within an industry. Using disaggregated U.S. import data, we create a new measure of trade costs over time and industries. As the models predict, productivity growth is faster in industries with falling trade costs. We also find evidence supporting the major hypotheses of the heterogenous- firm models. Plants in industries with falling trade costs are more likely to die or become exporters. Existing exporters increase their shipments abroad. The results do not apply equally across all sectors but are strongest for industries most likely to be producing horizontally-differentiated tradeable goods.
Topic:
Economics, Government, and International Trade and Finance
Political Geography:
United States

33635. Improving The Sovereign Debt Restructuring Process

Author:
Brad Setser and Nouriel Roubini
Publication Date:
03-2003
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
The recent debate on reforming the international financial system has focused on the need to improve the sovereign debt restructuring process, and in particular on steps that could limit the risk that litigation could disrupt or delay a sovereign debt restructuring. This debate increasingly has focused on the debt restructuring process in those cases where debt reduction is needed to produce a sustainable debt profile. Less attention has been given to those cases where a sovereign lacks the reserves needed to cover its near-term obligations and, absent international support, has a clear need for debt rescheduling to push out near-term maturities.
Topic:
Economics, Government, and International Trade and Finance

33636. 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

33637. 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

33638. "Animal Spirits" and Policy Stimulants

Author:
John H. Makin
Publication Date:
12-2003
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
The policy stimulants administered in very large doses to the U.S. economy at midyear are wearing off fast. China's boom, while not ending, is cooling. The result of those two facts will be U.S. growth of 3 percent or less in the final quarter of this year and the first quarter of next before tax rebates kick in to provide a lone quarter of 4 percent growth next spring. Then it will be back to 3 percent, plus or minus half a percent, in the second half of 2004 as the boost from tax cuts fades, provided stock markets hold up.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
United States and China

33639. The World Economy after Dubai

Author:
John H. Makin
Publication Date:
11-2003
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
The outlook for the global economy has become clouded since the September annual meetings of the International Monetary Fund and World Bank in Dubai. Going into the meetings, views were broadly optimistic, tied to the familiar, reassuring sense of a recovering U.S. economy, the prospect of rising exports, and a firm dollar. America, an oasis of firmer demand growth in a desert of global excess capacity, was back— again, for the second time since the bubble economy burst in March 2000. Only this time, it was for real, not like the false, post-9/11 recovery that fizzled out in the spring of 2002. Or, so it seemed.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
United States, America, and Dubai

33640. Time to Shut Down the PKK: Why the United States and Turkey Should Work Together

Author:
Soner Cagaptay
Publication Date:
09-2003
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
A U.S. government team is in Ankara today for talks with members of the Turkish military and intelligence services regarding the future of the Kurdistan Workers Party (PKK), an organization on the State Department's Foreign Terrorist Organization (FTO) list. On September 2, 2003, the PKK, whose past attacks have cost Turkey 35,000 lives, renounced a unilateral ceasefire it had declared in February 2000. This is a dangerous development for three reasons. First, PKK violence could throw Turkey back into the political maelstrom of the 1990s, and it is in Washington's best interests to help preserve democratic Turkey's stability. Second, if the PKK attacks Turkey from U.S.-controlled northern Iraq, where it has an estimated 4,000-5,000 terrorists, this could put Washington and Ankara at loggerheads. Third, Turkey considers joint action against the PKK a sine qua non for U.S.-Turkish cooperation in Iraq; it is unlikely that Ankara will send troops to Iraq unless the PKK issue is tackled. Given all of these reasons, the threat that the PKK poses to U.S. national interests is now at such a level that the organization is a legitimate target in the war on terror. Therefore, it is time to take action against the PKK.
Topic:
Security and Religion
Political Geography:
United States, Iraq, Washington, Turkey, and Middle East