Predictions for 2006

Some of my guess­es for trade and pub­lic pol­i­cy out­comes next year h4. A few pre­dic­tions for 2006 #(relaxed) The WTO nego­ti­a­tions will con­clude in Gene­va in the third quar­ter, bare­ly leav­ing time to cre­ate and ver­i­fy a hun­dred-thou­sand pages of com­mit­ment sched­ules before the US nego­ti­at­ing author­i­ty expires. After five years of talks, the end will come in a rush bring­ing con­fu­sion for many includ­ing the Pacif­ic Islands, most of Africa and even some ASEANs.
#(relaxed) The over­all shape of the WTO deals on agri­cul­ture and ser­vices will not change much: but there’ll be a lot of obscure bar­gains made to con­trol imports in ‘sen­si­tive’ and ‘spe­cial’ mar­kets in both sec­tors. Indus­tries that start ear­ly in 2006 to iden­ti­fy traps and loop­holes in the all-impor­tant sched­ules will have the advan­tage.
#(relaxed) Food health and safe­ty (quar­an­tine) bar­ri­ers will loom larg­er than ever in world trade thanks to fears about the spread of epi­zoot­ic dis­ease (includ­ing ‘bird flu’). These bar­ri­ers rep­re­sent an enor­mous threat to to mar­kets because few gov­ern­ments man­age them in a ratio­nal way based on a cost-ben­e­fit assess­ment of risk mit­i­ga­tion strate­gies.
#(relaxed) Trade fric­tion with the USA will grow, but Chi­na is still like­ly to jump to sec­ond on the trade ranks because the resur­gent Japan­ese econ­o­my will spur con­tin­u­ing growth—as well as offer­ing renewed oppor­tu­ni­ties for Aus­tralia. The Aus­tralian ‘FTA fea­si­blilty’ study with Japan won’t lead to an FTA but will iden­ti­fy sev­er­al ways to expand invest­ment and the com­po­si­tion of our trade includ­ing in ser­vices and food.
#(relaxed) Indone­sia has new, com­pe­tent eco­nom­ic man­age­ment to go with the strongest real GDP growth out­look in ASEAN; infla­tion threat­ens, but cor­rup­tion appears less and the gov­ern­ment is man­ag­ing secu­ri­ty prob­lems more adroit­ly. Domes­tic con­fi­dence will vis­i­bly improve. It’s time to recon­sid­er Indone­sian mar­ket strate­gies.
#(relaxed) Gov­ern­ments will stum­ble bad­ly in the “new” cli­mate change debate over the ques­tion of what are we will­ing to pay for the ben­e­fits of adap­tion to high­er tem­per­a­tures and reduc­tion of green­house gas emis­sions. Some will again endorse mit­i­ga­tion plans that cost much more than they are worth; oth­ers will take a bet, at very long odds, that a mar­ket price (for car­bon emis­sions) will be suf­fi­cient incen­tive for a tech­no­log­i­cal solu­tion.

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