Monthly Archives: July 2009

Carbon tariffs, permits and subsidies

Gary Horlick, Washington trade attorney, former senior official of the Commerce Department and a very fine analyst of WTO law, sets out some of the impossibly tricky technical questions in plain langugage

“Perhaps the biggest international trade challenge — and one on which a lot more work needs to be done — is how the mechanics of international trade will work if each of the hundred and ninety countries (or even 10-15 regional groupings) has its own individual climate change implementation. What if some of them have border taxes, some require permits for imports, and others instead offset the costs for their domestic industry. Or each country has a cap- and-trade system with different limitations on the permits?” Extract from testimony to the U.S. Senate Finance Committee

A short paper that asks the right questions (to which there are few, if any, satisfactory answers). Thanks to Simon Lester for finding this.

The life of Robert McNamara

McNamara and Lyndon Johnson

Dead at 93 years of age. The last survivor (? I’m pretty sure) of Kennedy’s clever, risk-taking, technocracy of the early 1960s.

A man who, like Lyndon Johnson, struggled with the terrible consequences of the wrong choices he helped to make in Vietnam, but unlike Johnson survived them. His unlikely translation to the World Bank from the U.S. Defense Department was (in contrast to the recent Wolfowitz debacle) a remarkable success, expanding the role and scope and intelligence of the Bank during the classic era of ‘industrializing’ development while pushing it strongly toward preferential support for the poor.

Modeling a Doha agreement on agriculture

Building an ATPSM simulation

To conclude my series of posts on modeling a critical mass agreement on agriculture, I would like to show you how I set up UNCTAD’s Agricultural Trade Policy Simulation Model (ATPSM) to project the economic impacts of an agreement to liberalize agricultural trade based on WTO’s December, 2008, draft ‘modalities’. In my previous post, I compared the results of this simulation with the results of a simulated critical mass agreement, also modeled in ATPSM.

In this video (click the thumbnail image: 17.5 minutes, about 25mb.), I walk through the setup of the simulation. Because the ATPSM program uses a graphic interface to the modeling tools, a video seems to be the best way to give you a feeling for what’s going on and, perhaps, prompt you to think of ways to use the program yourself.

How bad is global deforestation?

Deforestation, selected countries 1990-2005

The short answer: if the data is reliable (it may not be) annual forest ‘loss’—mostly conversion of land to agriculture—is small: a fifth of one percent and slowing. Does this small loss of forest add to net CO2 emissions, or reduce them, or make no difference? It’s not clear.

In this post I take a look at the FAO data on global deforestation rates, just to get a feeling for the size of the problem from a climate-change perspective (there are other perspectives, of course, including land-care). The data on the loss rate seems is questionable because of the difficulty of collecting it. Given the uncertainty about the net-emissions of forests—see over the fold—the reported rate of forest loss looks to be insignificant for climate change (only).

Another small step

But it’s impossible to ignore the significance of this continuing internationalization of the remminbi.

“Although it has no short-term implications for the full convertibility of the renminbi, the announcement provides ballast to the volley of political signals Beijing has been sending in recent months over its dissatisfaction with the US dollar.” Extract from Financial Times

Ex-PMs attack Defense White Paper

Malcolm Fraser and Paul Keating, who would have believed it? Both criticize the obscurely Sino-phobic tone of the White Paper and advocate—in place of a more belligerent regionalism, or reliance on the US alliance (for something it is not designed to deliver)—a more effective regional engagement.

Doesn’t convince the Colonel Blimps, of course, who imagine that with sufficient expensive and obsolescing weaponry, Australia could run a “totally independent foreign policy” (independent of those pesky foreigners, presumably).

Global Trade Alert

Global Trade Alert website

Just before the London G-20 Meeting in April, Andy Stoler and I wrote a paper for a booklet published by the Center for Economic Policy Research in which we suggested that the best way to make G-20 governments live up to their promises was to expose their misdeeds on trade policy—including those that nominally complied with their WTO obligation—using a public website.

Specifically, we recommended that the site should not be run by one of the global institutions (WTO, World Bank) that are owned by governments, but should be a private venture open to contributions from individuals around the world. Why? Well, as the FT notes, in an editorial today, sovereigns are not likely to put much pressure on themselves:

“The problem with naming and shaming wrongdoers is that, all too often, they turn out to be shameless.” Extract from Financial Times

I am delighted to learn that the co-editor of the booklet (Simon Evenett) and the publishers (CEPR) have created just such a website: Global Trade Alert. It has been launched in the past couple of weeks with the backing of institutional sponsors (government funds, mostly) and an advisory board of distinguished analysts. GTA already lists a couple of dozen measures with useful details including the trading partners and tariff lines affected (for goods measures).

A nicely implemented and potentially intriguing experiment in global transparency. Please visit and contribute.