The current media discourse around the G20 summit can broadly be divided into two camps: There are those who are critical of the agenda because it neglects issues such as climate change and international development; and there are those who doubt whether any substantive agreement can be reached amongst such a diverse set of nations with diverse interests. A worrying trend lamented by both camps is the 47 major measures to restrict trade which have been implemented by several countries since the last G20 leaders’ summit in Washington.

What is missing from the discourse and what underpins all of these concerns is the endogenous nature of the global financial crisis.

Read the rest of this entry »

Guest blogger Lawrence J. Lau makes the case for keeping the trade door open, outlining options for China and the world.

The “open door” policy was a critical component of the economic reforms China introduced in 1978, opening the country to the outward and inward flow of goods and services, of capital, and of people.

Deng Xiaoping’s government brought China into the globalised economy, expanding international trade and attracting foreign direct investment, which brought with it capital, technology, markets, new business models and methods needed after decades of relative isolation. It permitted hundreds of thousands of Chinese scholars to go abroad for exchange and advanced study, and let foreign experts become involved with China. The “open door” underpinned the extraordinary growth of the Chinese economy over the past three decades.

Read the rest of this entry »

Guest blogger Sylvia Ostry reflects on the challenges for the trade system amidst the financial crisis

If there was ever any doubt about the close, even intimate, relationship between trade and finance in the global economy, the statement issued by the G20 leaders on 15 November 2008 put that doubt to rest. In that document – wide ranging and complex – the G20 tasked several national and international organisations with implementing enunciated principles for reform of financial markets and an initial set of specific measures, including high-priority actions to be completed by the end of March 2009.

Read the rest of this entry »

Guest blogger Dominique Njinkeu sets out the challenges facing Africa in the current economic crisis, highlights the and makes the case for a stimulus package for Africa to address shrinking trade.

The current global downturn is a crisis emanating from advanced economies rather than from bad policies on the part of Sub-Saharan African (SSA) countries. African economies will nevertheless be affected through a variety of international trade-related channels, including reduced commodities prices and exports receipts, foreign direct investment and equity flows, exchange rate fluctuations, and remittances. Trade is already shrinking, growth declining, and unemployment rising. The associated losses for SSA countries are forecasted at over USD 50 billion in 2008-2009. Unless appropriate solutions are identified and swiftly implemented, the crisis risks undermining the achievements of three decades of policy reform, thus further reducing the possibility of achieving the UN Millennium Development Goals. Fortunately, such solutions exist that could even turn the crisis into opportunity for African countries.

Read the rest of this entry »

Roberto Bouzas

The challenges faced by developing countries and sustainable development regarding global economic governance are not substantially different from those faced by the developed world. In fact, both groups of countries share common challenges.

The first and most urgent challenge is to revive the multilateral trade regime. In the last half century, trade has been the policy area in which the international community has made the most strident progress towards cooperation. In the last decade, however, the effectiveness of the international trade regime has eroded under the weight of a changing international and domestic landscape (a new balance of power, an expanded membership, the emergence of new constituencies, and the development of uncharted regulatory areas). These structural transformations were underway well in advance of the financial crisis, but a creeping recession and mounting protectionist pressures have sharply deepened existing tensions.

Read the rest of this entry »

Guest blogger Shuaihua Cheng provides a Chinese perspective on global trade governance and the economic crisis, focusing on the upside of a downturn.

The most critical problem facing global trade governance at this moment is that we have focused too much on problems at the World Trade Organization (WTO). It is dangerous to disregard the fact that the WTO has functioned well as a stabilizer of basic global economic order amidst economic turmoil.

Read the rest of this entry »

Guest blogger Yash Tandon sets out a forward-looking agenda for global trade governance and sustainable development from a Southern perspective.

The world’s multilateral negotiations on trade and on sustainable development over the last decade yield two important lessons for the multilateral system.

The first lesson concerns the interconnectedness of things: trade, security, employment, human rights, development, terrorism, migration, poverty, climate change are all interconnected. For the developing countries of the South, trade and climate change are a dual facet of their continuing sustainable development challenges.

Read the rest of this entry »

Guest blogger Richard Higgott sets out the challenges and priorities for G-20 leaders to contain the spread of the financial crisis to the trade sector.

The governance of global trade and the international trade regime will clearly be affected by the fallout from the current wider economic and financial turmoil. Enhanced global economic policy coordination is needed. Existing institutions do not currently offer enough – in either sufficient quantity or quality. Amidst efforts to stabilise the global economy, the multilateral trade system is threatened by the perception that globalization has been tarnished by speculative investment and other excesses in financial markets seeking ever larger profits at the expense of sound business practice.

Read the rest of this entry »

President Obama’s chief of staff, Rahm Emmanuel, is famous for saying that we should “never let a good crisis go to waste”. And let’s make no mistake about it, we are in crisis. While the world’s attention is largely focused on the financial meltdown, with a side order of climate change, we may soon need to face up to the fact that we are living what Australian environmental business expert Paul Gilding calls “The Great Disruption” – the confluence of a major economic breakdown and the unraveling of the global environment. And, while our leaders are busily wheeling out stimulus packages in a desperate attempt to kick-start the faltering economy, the same is not possible for the global environment. In the words of Glen Prickett of Conservation International: “Mother Nature doesn’t do bailouts”.

Read the rest of this entry »

Even though the global economic crisis is far from over and may unfold in hitherto unexpected ways, the interests of developing countries, especially as they relate to the multilateral trading system, have definitely been implicated in ways that ought to force a rethink of national priorities. The purpose of this note is to identify a number of matters where crisis-related considerations should alter national calculations.

Read the rest of this entry »