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.