Monthly Archives: July 2008

Insiders advise against car subsidies

Fight­ing over the remain­ing ten-per­cent tar­iff is point­less in the current—and medium-term—market con­di­tions. The strong exchange rate, the strength of our terms-of-trade vis-a-vis man­u­fac­tures and the remark­able com­pet­i­tive­ness of Chi­na makes an import tax of five or even ten per­cent utter­ly irrel­e­vant.

The real eco­nom­ic debate is over the size of the pro­posed sub­si­dies to cap­i­tal that the Labour gov­ern­ment is con­sid­er­ing. Why on earth…? There can hard­ly be a stronger exam­ple of throw­ing good mon­ey after bad.

Doha round autopsy

An OpEd piece com­mis­sioned by the Aus­tralian Finan­cial Review for today’s paper

The collapse of the Doha Round negotiations

logo of the Doha roundThere’s no joy in hav­ing pre­dict­ed this out­come.

As explained (at some length) in my ear­li­er post, I don’t believe that the draft agree­ment on the table rep­re­sent­ed any­thing like the ‘sub­stan­tial improve­ment’ in glob­al mar­kets that was the goal of the Doha Dec­la­ra­tion that launched the talks in 2001. There were too many sta­tus excep­tions, cat­e­go­ry excep­tions, and oppor­tu­ni­ties for manip­u­la­tion.

But the repeat­ed col­lapse of these nego­ti­a­tions is a blow to con­fi­dence in the abil­i­ty of the glob­al com­mu­ni­ty and lead­er­ship to man­age glob­al com­mons like the world trad­ing sys­tem and, for that mat­ter, the glob­al envi­ron­ment and cli­mate (assum­ing the lat­ter is a man­age­able com­mons).

The world com­mu­ni­ty last agreed to open goods and ser­vices mar­kets on the basis of com­pro­mis­es struck at the end of the 1980s. The cen­ters of world wealth, eco­nom­ic and trade growth and even pop­u­la­tion growth have moved far since then. The man­age­ment of glob­al com­mons needs to move, too

Devices such as WTO’s ‘sin­gle undertaking’—that saw one huge set of com­plex rules applied in a mono­lith­ic way to all economies—no longer bridge the real dif­fer­ences in inter­ests that, for the present and for some years to come, will affect agree­ments between the worlds largest economies. Giant, poor, ‘emerg­ing’ economies such as Chi­na, India and Indone­sia are mak­ing choic­es that can­not be accom­mo­dat­ed in the frame­work WTO built in the 1980s.

We can no longer go on pre­tend­ing that with fur­ther ‘tweak­ing’ of excep­tions and con­ces­sions we can make their oblig­a­tions and needs fit into the col­lab­o­ra­tive man­age­ment frame­work. The frame­work is valu­able; but it must change or it will con­tin­ue to seize up—as it has this week—and be aban­doned.

Its time to reengi­neer the process­es of WTO.

Spencer’s ‘smoking gun’

Dr. Roy Spencer, for­mer NASA cli­mate researcher, now man­ag­ing the satel­lite tem­per­a­ture data col­lec­tion at the Uni­ver­si­ty of Alaba­ma, Huntsville, claims to have found a ‘smok­ing gun’sig­nal on cli­mate sen­si­tiv­i­ty

[W]e now have new satel­lite evi­dence which strong­ly sug­gests that…the real cli­mate sys­tem appears to be dom­i­nat­ed by neg­a­tive feedbacks’—instead of the pos­i­tive feed­backs…

Monckton’s litany

Christo­pher, Vis­count Monk­ton of Brench­ley, is a good schol­ar and a fine writer. This clever recital pulls no punch­es but you may feel like respond­ing ‘amen’ (at least you might…if you were a ‘dis­senter’)

CSIRO’s (ab)use of intellectual property

SheepRoad.jpgThe pri­vate abuse of copy­right is con­sid­ered in some industry—and even offi­cial—quar­ters as an epi­dem­ic wave of crim­i­nal behav­ior. The evi­dence for this view is very dubi­ous. But there is anoth­er form of copy­right abuse that also has a debil­i­tat­ing impact on our econ­o­my and our soci­ety. That is the claim that gov­ern­ments some­times make that they are unable to main­tain open and account­able stan­dards of deci­sion-mak­ing because they must pro­tect some intel­lec­tu­al prop­er­ty or oth­er. This is often arrant non­sense and an excuse to shirk respon­si­bil­i­ty. But worse, it abus­es the copy­right sys­tem whose objec­tive above all is to bal­ance the pub­lic inter­est in the cre­ation and dis­sem­i­na­tion of knowl­edge against the rights of the cre­ator and own­er.

The CSIRO has told David Stock­well, a math­e­mati­cian and cli­mate sci­en­tist, that it can­not release tem­per­a­ture and soil-mois­ture data behind its report to Gov­ern­ment on the mul­ti-bil­lion dol­lar ‘Excep­tion­al Cir­cum­stances’ drought-relief sub­sidy pro­gram “due to restric­tions on Intel­lec­tu­al Prop­er­ty”. David Stock­well believes, with some rea­son, that an exam­i­na­tion of the data would show that the con­clu­sions drawn in the report are wrong and that the Prime Min­is­ter has been mis­led in his belief that the CSIRO has found a cause for alarm about future drought pat­terns in Aus­tralia.

Here is what the Prime Min­is­ter said, last week­end, about the sig­nif­i­cance of the CSIRO report:

Improving the WTO’s trade framework

Bruce Bloin­gen from the Uni­ver­si­ty of Ore­gon pro­vides some details of a mono­graph for CEPR and the Kiel Insti­tute that looks like an impor­tant entry in a grow­ing lit­er­a­ture on improv­ing the effi­cien­cy of WTO process­es and glob­al trade gov­er­nance. Con­tri­bu­tions from some top ana­lysts includ­ing Patrick Messer­lin, Alan Dear­dorff and Robert Stern, Philip­pa Dee and Chris Find­lay.

The Doha Round is stag­nant, which does not bode well for trade lib­er­al­i­sa­tion in the near future and pos­si­bly for the World Trade Orga­ni­za­tion in the long run… chap­ters in this vol­ume iden­ti­fy a num­ber of impor­tant long-run trends that the WTO and its mem­bers must sim­ply come to grips with before mean­ing­ful progress can be made.”  extract from: Vox EU

Andrew Stol­er, Direc­tor of the Ade­laide Insti­tute for Inter­na­tion­al Trade (and for­mer Deputy Direc­tor-Gen­er­al WTO) and I have just embarked on a sim­i­lar project with spe­cif­ic focus on find­ing a bet­ter way to reach agree­ments on agri­cul­tur­al mar­kets. More soon.