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.
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20 Mar 2009 / Simon Evenett
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20 Mar 2009 / Marcelo de Paiva Abreu
Bold trade and financial initiatives will be required to control the damage that the current crisis imposes on developing countries and to assure their economic recovery. At the highest level, the G20 will need to consolidate its position as a forum where substantive coordinating efforts can take place. A positive, concrete, action agenda needs to replace the emphasis on declarations of principle and the reassertion of willingness to cooperate. In addition to these efforts to provide substance to the agenda, two political challenges must be faced. The first is how to consolidate in developed countries a view that the enhanced role of the G20 over that of the G8 should become a permanent feature of global economic governance rather than a stop gap maintained only during the crisis. The second, similarly daunting challenge, is one of ensuring that developing countries are convinced that their interests are adequately represented by the developing countries that are G20 members.
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20 Mar 2009 / Arunabha Ghosh
Trade is one of the first casualties of a global economic crisis. We saw this happen during the Great Depression, after the oil shocks of the 1970s, in the early 1980s, and now the first contraction in global trade since 1982. A reformed and robust trade monitoring system should be among the top priorities for world leaders meeting in London in April and beyond. Many argue that the priority for governments should be to ‘fix’ the crisis first; reforming the governance of the global trade (and financial) system could come later. That would indeed be a mistaken strategy and a lost opportunity. It would be mistaken because better trade monitoring could determine the difference between a coordinated response and a deepening crisis. It would be a lost opportunity for reform because the current crisis sharply exposes the deficiencies in trade governance, which if tolerated any longer would only serve to delegitimise a rule-based trade system.
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20 Mar 2009 / Steve Charnovitz
The motto of the G20 leader’s forthcoming London Summit is “Stability Growth Jobs.” The world economy is producing an insufficient amount of all three of these economic virtues and so it is appropriate for powerful governments to get together in London to try to improve and coordinate their social, economic, and environmental policies.
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20 Mar 2009 / Jean-Pierre Lehmann
In the last 30 years since the onset of the Chinese open economic reform program, the world has experienced profound systemic shifts, with arguably more in the past two centuries. Much of this change/transformation has had highly positive impacts. The misnamed “emerging economies,” many of which in fact are old civilizations with long histories of sustained and dynamic trading activities, have definitively ended the long period of exclusive Western global economic dominance. As the global market has expanded well beyond anyone’s imagination, the world, especially the developing world, has experienced unprecedented rates of growth. However, as Jean-François Rischard has argued in his compelling book High Noon: Twenty Global Problems – Twenty Years to Solve Them (2002), while markets and new information technologies experienced exponential change, the development of institutions and mentalities has been linear at best. This dissonance is at the origin of the gaping global governance gap that characterises the world today; it is well illustrated by the continued failure of the WTO Doha Round negotiations, extending over eight years-in fact, for virtually the whole of the 21st century to date! This is not an auspicious first decade to a new century.
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17 Mar 2009 / Bernard Hoekman
The recent food, fuel and financial crises have imposed large external shocks on households and firms in all developing countries. They have prompted questioning of the risks and rewards of globalization and identified areas where the global governance of trade urgently needs improvement. (Here, I broadly define good global trade governance as international cooperation in the form of a set of agreed rules that reduce the negative spillovers of national policies affecting international flows of products and production factors.) At the same time, the financial crisis has revealed the robustness and importance of the trading system. A major feature of the current crisis is the dog that did not bark: that is, to date, we have not seen the widespread imposition of the types of trade protection that characterized the 1970s and early 1980s, not to mention the 1930s.
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17 Mar 2009 / Robert Wolfe
The most important trade advice one can give to leaders participating in the G-20 London Summit is, Do no harm. The risk of harm is real, since the group’s composition and preparatory process, both oriented to financial issues, are ill-suited to trade or the World Trade Organization (WTO). Some countries important in the WTO are not invited to London, but many members of the G20 have little or no role in WTO negotiations in Geneva. Officials responsible for trade policy have not been involved in developing the texts for leaders. Nevertheless many analysts want the G20 to take an activist role on trade. Leaders should resist that temptation in favour of playing a catalytic role.
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17 Mar 2009 / Kevin Gallagher and Timothy Wise
Development should be the centerpiece of reforming the global economic architecture. Pressing to conclude a World Trade Organization (WTO) deal to close the Doha Round based on the current proposals circulating in Geneva would be counter productive. Instead, we offer five policies for reforming global trade that will enable economic development and stimulate the global demand needed for a global recovery.
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17 Mar 2009 / Richard Kozul-Wright
When the latest efforts to close the Doha Round ended abruptly in December 2008, entrenched negotiating positions were a factor; but underlying systemic issues, ignored in many accounts of the stop-and-start history of the Round since 2001, were of greater significance: these include countries trading more but earning less; the dangers of premature deindustrialization; a growing technological divide and diminishing policy space. While addressing these systematic challenges will be key to the future stability of the multilateral trading system, the immediate threat to international trade comes from a deeply dysfunctional system of unregulated finance. Fixing that should be the urgent priority of the international community.
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17 Mar 2009 / Charles Gore
The most critical challenge for global economic governance is to find effective and fair ways of mitigating and adapting to climate change whilst at the same time reducing global income inequalities and realizing the development aspirations and unrealized human potential of millions of people in developing countries. Recent evidence, for example on sea level rise and the shrinking summer ice in the Arctic Ocean, suggests that climate change is occurring even faster than models pronounced by the Intergovernmental Panel on Climate Change (IPCC) have predicted. Biophysical feedback mechanisms, too often omitted from climate models, are likely to be a key factor in the underestimation and are likely to make climate change irreversible once critical atmospheric temperatures are passed. How fast we act will affect both the magnitude and reversibility of climate change. Some say 2015 will be too late; but even if they are wrong, the climate issue will certainly be at the top of the public agenda by then.
