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.