Tag Archives: surveillance

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.

Empty words won’t limit the ‘wriggle room’

Democ­ra­cy ensures we get the gov­ern­ments we deserve.

Gideon Rach­man seems to think we deserve only to be con­soled for the polit­i­cal dilem­ma of G20 lead­ers rather than offered real solu­tions to the frail­ties of the glob­al trade frame­work. He agrees the prob­lem is the threat of ‘wig­gle room’ pro­tec­tion:

[I]f the world’s polit­i­cal lead­ers start delib­er­ate­ly increas­ing bar­ri­ers to trade, they will deep­en and wors­en the eco­nom­ic cri­sis – and risk mak­ing the process of deglob­al­i­sa­tion a per­ma­nent shift. Most polit­i­cal lead­ers know this – and so they are still a lit­tle embar­rassed about direct mea­sures to increase tar­iffs. So a new wave of pro­tec­tion­ism will take indi­rect forms.” Extract from Gideon Rach­man in the Finan­cial Times

But he’s sat­is­fied with the appear­ance of col­lab­o­ra­tion to expose and pro­hib­it pro­tec­tion, being con­vinced there’s no resolve to take real action.

It will be tempt­ing to laugh, if and when the com­mu­niqué from the Lon­don sum­mit con­tains the famil­iar pledges to avoid pro­tec­tion­ism and to com­plete the Doha round. But it is prob­a­bly impor­tant that world lead­ers at least promise to fol­low the path of virtue – even if they know that they may sin.”

That’s too sophis­ti­cat­ed a dish for me, GR. If you say that you’re hap­py to eat smoke, then smoke is what you’ll be served.

This is the worst mar­ket reces­sion since the glob­al trad­ing frame­work was cre­at­ed six­ty years ago. We know what the threats are, we know what it means to avoid them. Don’t we deserve more than ‘emp­ty words’ from gov­ern­ments?

Would web surveillance of protection work?

Graphic from Reserve Bank of Australia

In our paper for the Evenett and Bald­win book on ‘murky pro­tec­tion­ism’, Andrew Stol­er and I out­line a sur­veil­lance mech­a­nism for the G20 that we think will dis­suade gov­ern­ments from mak­ing reg­u­la­tions that would harm world trade (fur­ther, see the graph at left.)

The mech­a­nism we pro­pose has not been used pre­vi­ous­ly to expose pro­tec­tion­ism but it is cer­tain­ly in use in oth­er con­texts to bring poli­cies under the spot­light of pub­lic scruti­ny.

For exam­ple, I referred a cou­ple of weeks ago to recovery.gov which the Oba­ma admin­is­tra­tion is using to report on ‘stim­u­lus’ spend­ing. Now there’s an open sur­veil­lance web­site that is track­ing and exam­in­ing projects that are can­di­dates for some of the ‘pork’

StimulusWatch.org was built to help the new admin­is­tra­tion keep its pledge to invest stim­u­lus mon­ey smart­ly, and to hold pub­lic offi­cials to account for the tax­pay­er mon­ey they spend. We do this by allow­ing you, cit­i­zens around the coun­try with local knowl­edge about the pro­posed ‘shov­el-ready’ projects in your city, to find, dis­cuss and rate those projects.” Extract from Stim­u­lus Watch: Keep­ing an Eye on Eco­nom­ic Recov­ery Spend­ing

Can the G20 halt ‘murky’ protectionism?


What should the G20 do, when they meet in Lon­don next month, to put an end to the grow­ing use of what I’ve been call­ing ‘wig­gle-room’ pro­tec­tion? Is ‘murky’ pro­tec­tion­ism caus­ing the com­ing col­lapse in trade vol­umes? Or will pro­tec­tion­ism rise as a result? Sup­pos­ing that they want­ed to, could the G20 real­ly crack-down on actions that close mar­kets or dis­crim­i­nate against imports but are not clear­ly pro­hib­it­ed by WTO?

Richard Bald­win and Simon Evenett’s book, now avail­able for down­load (free) at the VoxEU site, com­pris­es brief essays by trade Min­is­ters (notably, Australia’s Trade Min­is­ter, Simon Cre­an), high pro­file ana­lysts and a num­ber of lead­ing trade experts.

This ebook presents con­crete steps that G20 lead­ers should take to avoid a neg­a­tive pro­tec­tion-reces­sion spi­ral and the threat it would pose to a glob­al recov­ery.” Extract from The col­lapse of glob­al trade, murky pro­tec­tion­ism, and the cri­sis: Rec­om­men­da­tions for the G20

Andrew Stol­er (for­mer Deputy Direc­tor Gen­er­al of WTO) and I have a paper in the col­lec­tion: “G20 sur­veil­lance of harm­ful trade mea­sures” that pro­pos­es a nov­el but poten­tial­ly high­ly effec­tive ‘crowd-sourc­ing’ approach to the expo­sure of harm­ful ‘wig­gle-room’ mea­sures.

We pro­pose an open, pub­lic sur­veil­lance sys­tem whose com­po­nents already exist—some of them in this web­site among thou­sands of oth­ers. Unlike the WTO sur­veil­lance mech­a­nisms of the past, it allows those who have most at stake in a pros­per­ous glob­al economy—firms and house­holds in rich coun­tries and poor—to help safe­guard the glob­al recov­ery. Please check it out and let me know what you think.

Next round of trade protection (Part II)

In this ear­li­er post, I looked at three of the ‘old stand­bys’ that are like­ly to pro­vide gov­ern­ments with all the ‘wig­gle-room’ they need to increase pro­tec­tion while remain­ing nom­i­nal­ly com­pli­ant with their WTO oblig­a­tions.

This time, two more oldies but good­ies that are still more like­ly, in my view, to fig­ure in the com­ing round of trade pro­tec­tion. These two threat­en high lev­els of ‘tai­lor-made’ pro­tec­tion for firms that are strug­gling through the reces­sion, but they do so at the cost of low­er lev­els of demand at home (so much for ‘stim­u­lus’!), increased pres­sure on com­peti­tors in oth­er coun­tries and a fur­ther cut in world trade vol­umes. Bad for almost every­one.

At the end of this post I start to look at some defens­es against the com­ing round of pro­tec­tion.

The next round of trade protection

Change in employment compared to earlier recessionsChange in employment compared to earlier recessions

Will there be one? You bet! The only ques­tions are: how soon and how big?

With employ­ment num­bers in both indus­tri­al­ized and indus­tri­al­iz­ing coun­tries falling, world mar­kets seiz­ing up as a con­se­quence of the cred­it squeeze, icons of glob­al­iza­tion like Dubai bleed­ing debt (and emi­grants) and gov­ern­ments rush­ing out ‘stim­u­lus’ pack­ages to prop up domes­tic demand, the scene is set for some un-neigh­bor­ly action at every inter­na­tion­al bor­der. Nev­er mind that some of these “neg­a­tives” are like­ly to be part of the cre­ative destruc­tion that brings new ideas, new mar­ket entrants and, even­tu­al­ly, new growth.


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Why don’t they say what they mean?

It’s often open to ques­tion whether the G7—represented by their Finance Min­is­ters in this case—mean what they say when it comes to trade poli­cies. But it’s a real puz­zle that, despite the gen­er­al skep­ti­cism of which they must be aware, they con­tin­ue to think that they can get away with this by nev­er say­ing what they mean.

An open sys­tem of glob­al trade and invest­ment is indis­pens­able for glob­al pros­per­i­ty. The G7 remains com­mit­ted to avoid­ing pro­tec­tion­ist mea­sures, which would only exac­er­bate the down­turn, to refrain­ing from rais­ing new bar­ri­ers and to work­ing towards a quick and ambi­tious con­clu­sion of the Doha round.” Extract from Finan­cial Times

Avoid­ing pro­tec­tion­ist mea­sures” sim­ply isn’t good enough as a com­mit­ment to ensure that the recov­ery of world trade is not prej­u­diced by sly devices such as sub­si­dies, ‘buy-local’ restric­tions, stan­dards bar­ri­ers and ‘safe­guards’ (not for­get­ting cap­i­tal account pro­tec­tion via com­pet­i­tive exchange rate man­age­ment).

If the G7 real­ly did intend to foreswear “pro­tec­tion­ism” they’d spell out what pre­cise­ly they meant they would not do.