The Korea-US Free Trade Agreement: A Summary Assessment

The Korea-United States Free Trade Agreement (KORUS FTA) opens up substantial new opportunities for bilateral trade and investment in goods and services and promotes important foreign policy interests of both countries. The FTA quickly removes most tariff barriers to auto trade and substantially reduces tax and regulatory burdens that impede sales of US cars in Korea; improves access to the Korean market for a wide range of US farm products; and opens up the Korean services market in key areas such as financial services, insurance, express delivery, and legal and accounting services. Nonetheless the ratification of the KORUS FTA has been controversial. In the United States attention has focused on both the auto sector, which accounts for almost one-quarter of bilateral trade and a large share of the US trade deficit with Korea, and Korean restrictions on US beef imports due to bovine spongiform encephalopathy (BSE) concerns. Several automakers and auto unions have opposed the deal, and the Democratic leadership in the US House of Representatives has demanded that the auto provisions be recast. In the US Senate, the resolution of the beef problem--which is now being addressed by Korean regulators--is a prerequisite to passage of implementing legislation. No clear timetable exists for the congressional vote and action may be deferred until 2008. The Bush administration will have to respond constructively to Democratic concerns about the FTA before the deal can be ratified and should consider new federal programs to help promote the competitiveness of US automakers. Doing so should attract a substantial minority of Democrats in the House, along with the majority of Republicans, to support the FTA. The stakes--in terms of both US economic and security interests in East Asia--are too great, and the costs too high, to reject the pact or defer a decision.

Reforming the International Monetary System in the 1970s and 2000s: Would an SDR Substitution Account Have Worked

This paper analyzes the discussion of a substitution account in the 1970s and how the account might have performed had it been agreed in 1980. The substitution account would have allowed central banks to diversify away from the dollar into the IMF’s Special Drawing Right (SDR), comprised of US dollar, Deutschmark, French franc (later euro), Japanese yen and British pound, through transactions conducted off the market. The account’s dollar assets could fall short of the value of its SDR liabilities, and hedging would have defeated the purpose of preventing dollar sales. In the event, negotiators were unable to agree on how to distribute the open-ended cost of covering any shortfall if the dollar’s depreciation were to exceed the value of any cumulative interest rate premium on the dollar. As it turned out, the substitution account would have encountered solvency problems had the US dollar return been based on US treasury bill yields, even if a substantial fraction of the IMF’s gold had been devoted to meet the shortfall at recent high prices for gold. However, had the US dollar return been based on US treasury bond yields, the substitution account would have been solvent even without any gold backing

Management of Cluster Policies: Case Studies of Japanese, German, and French Bio-clusters

This paper provides a detailed comparison of the following five cases of Japanese and European clusters in biotechnology: (1) Kobe Biomedical Innovation Cluster (KBIC) in Kobe (Japan), (2) Fuji Pharma Valley Cluster in Shizuoka Prefecture (Japan), (3) BioM Biotech Cluster in Munich (Germany), (4) BioRegion Rhine-Neckar in Heidelberg (Germany), and (5) Alsace BioValley Cluster in Strasbourg (France). We pay special attention to the cluster policy and its management by each region's core cluster management organization. Information on the focal clusters and the management of cluster policies has been obtained through interviews with the cluster directors and core staff in 2010 and 2011. We find several similarities and differences among the five cases of Japanese and European clusters. We also discuss how the management of cluster policies by the core management organizations may be related with the performance of regional clusters.management, cluster policy, regional cluster, R&D, biotechnology, international comparison

NAVIES, COAST GUARDS, THE MARITIME COMMUNITY AND INTERNATIONAL STABILITY

The maritime security environment in East Asia is a policy priority for both private and state actors. The strategic and economic importance of the sea ensures that its stability is of primary concern. Yet competing visions of how stability should be achieved and what a new ‘status-quo’ looks like has created uncertainty and competition. Naval forces in the region are growing as littoral states seek to ensure their interests at sea are met. Concurrently, many of the same states have looked to maritime law enforcement agencies to supplement their maritime security capabilities. Through cases studies of littoral states in Asia and beyond this policy brief examines how states in the region have integrated maritime law enforcement agencies into their existing maritime security architecture and how successful these efforts have been. This Policy Brief also determines how maritime stability is impacted by these developments and how it can be maintained in this hybrid maritime operating environmen

Aspects of Inner-Korean relations examined from a German viewpoint

This paper series takes a look at several aspects of inner-Korean relations, primarily in the area of international relations and economic cooperation, from a German viewpoint. In fact, the complexity of the respective subjects touched in this frame would require a deeper and more comprehensive analysis than developed here. The underlying idea is to stimulate further thought in several areas of pre- and post unification aspects by deriving inspiration from Germany's historical experience. The pre-unification phase and, specifically, the post-unification experience in Germany are of value to both Koreas. Further joint research is recommended on historical and contemporary aspects of German reunification that is relevant and suitable to Korea. --international relations,policy,economic development,Korea,Germany

Changes and challenges: The Royal Navy's China Station and Britain's East Asian empire during the 1920s

Examining Britain’s position in 1920s East Asia at a point amid changes in the international balance of power, this thesis bridges the gap between the existing imperial and naval accounts of a key transition point in global history. In doing so, it focuses upon the foremost organisation involved in maintaining and supporting the peripheral regions of imperial influence, the Royal Navy’s China Station. The thesis provides an important new segment to help in explaining the wider story of the slow decline of British imperial and naval dominance in the 1920s. Foremost among the findings is an emphasis on how heavily inter-related Britain’s strategies for China and Japan were during the decade. Indeed, China was expected by the Admiralty to play a pivotal role in any future relationship between the British Empire and the increasingly expansionist Japan, which adds a significant new angle to existing discussion of Britain’s far eastern defence strategy. Providing fresh insights into how those grand strategies were implemented in practice, the thesis shows how naval officers serving in the region willingly and repeatedly deviated from official policy on a day-to-day basis in order to assist their counterparts from friendly powers. Likewise, the evolving threats posed by state and sub-state actors in China are shown to have led to the deployment of vast Royal Navy task force to Shanghai in 1927, which is now generally overlooked and misunderstood. That event marked the last time Britain was able to confidently display its global naval dominance to the world. Among the more controversial findings, the thesis reveals how the Admiralty secretly circumvented the Washington Treaty by developing military aviation capabilities at Hong Kong under the guise of imperial policing. In doing so it provides the first clear evidence that alongside Germany and Japan, Britain was also actively contravening the post-1918 disarmament treaties it had only recently signed. Away from preparations for another major conflict, the thesis also provides a fresh examination of the contrasting accounts of two violent clashes involving Britain in 1920s China. In doing so, the thesis shows that it is possible to establish a more balanced understanding of events such as the Nanjing and Wanxian incidents, despite the highly polarised accounts of what happened. Finally, the human side of the story is explored, during which the thesis discusses changing attitudes towards and use of Victorian gunboat diplomacy. Moreover, the stresses of commanding gunboats in such isolated circumstances are shown to have pushed some young officers beyond breaking point, with disastrous consequences for themselves and others. Archival material that is entirely new to histories of the Royal Navy has been used throughout the thesis, adding crucial details such as the important role of Treaty Port volunteer corps in influencing warship deployments. Likewise, by delving deep into the naval archives, the thesis helps to move the imperial histories beyond the wall of steel and blue uniforms to consider the Royal Navy as a complex entity containing a diverse set of individuals. In combination the thesis provides the first detailed examination of the Royal Navy’s everyday work maintaining the British Empire in East Asia against the wider backdrop of the transformative changes in world geopolitics

Managerial discretion and optimal financing policies with cash flow uncertainty

Building on the work of Stulz (1990), this paper analyzes the impact of managerial discretion on optimal leverage within an agency cost model of corporate financing. Under the assumption that stockholders do not know with certainty the mean of the cash flow distribution, we argue that leverage fails to control for the amount of cash the manager can misappropriate in personal projects. We develop a model of a firm’s value maximization problem that predicts that as expected earnings uncertainty increases the firm will decrease its optimal level of borrowing. In a second part, we test this proposition on a panel of non–financial UK firms, by investigating the determinants of firms’ performance and allowing for endogeneity of capital structure decisions. The estimates confirm that earnings uncertainty, as measured by the volatility in monthly consensus forecasts of individual companies’ earnings per share, negatively affects corporate leverage. Furthermore, new empirical support is found to the agency cost view that corporate performance is positively correlated with leverage when poorly managed firms are selected.

Labour mobility and diaspora: An overview of Solomon Islands’ historical regulatory experience, 1850s-2013

With less than 4,500 of its population of around 600,000 living overseas in 2013, the Solomon Islands ranks 138th in the world for diaspora formation. At these levels the scale of the diaspora as a proportion of population (0.8 percent) remains lower than it was in the early 20th century, when more than 5,000 Solomon islanders were compulsorily repatriated from Queensland under early Australian Commonwealth legislation. This working paper retraces and reframes the history of Solomon Islands labour mobility and diaspora formation since the 1850s, considering it in relation to the wider institutional and macro-regulatory machineries of three phases or regimes of economic, trade and mobility regulation. These regimes are referred to in this paper as: 1.liberal imperial, 2. national territorial and 3. International neoliberal. We argue that Solomon Islanders’ participation in labour mobility has been substantial under all three phases, but that international mobility and diaspora formation only developed significantly under the liberal imperial regime. Even then, however, its development proved precarious. The ways regional actors and governments acting within the different regimes have framed and segmented labour markets continue to powerfully shape mobility and diaspora outcomes. The paper concludes with a discussion of the implications of the situation to date for future economic development and security in Solomon Islands