Bolstering Global Trade: Governance A Work Program for the WTO presented by the High-Level Board of Experts on the Future of Global Trade Governance

The WTO provides the foundation of the rules-based global trading system that has played a critical role in sup- porting growth in global GDP during recent decades. Preserving the salience of the WTO is vital in managing the adjustment pressures from globalization and sustaining the cooperation needed to govern trade relations in a world in which the transformation towards a global digital economy and associated servicification of production creates new policy challenges. Efforts to address these challenges are stymied by disagreements between WTO members regarding the priorities for the multilateral trading system. These disagreements reflect differences in views on the extent to which national policies have adverse international effects and the costs and benefits of ne- gotiating additional trade policy rules. The result has been to impede progress on rule-making for both long- standing core policies of concern to many WTO members (e.g., agriculture) as well as new policy areas. Matters have been compounded by dissatisfaction by some Members regarding the functioning of the WTO dispute set- tlement body and transparency mechanisms. While preferential trade agreements are important complementary vehicles for countries to pursue deeper coop- eration on trade policy matters than has been possible in the WTO, such initiatives depend on the strong foundation of basic rules provided by the WTO. Moreover, they only offer partial solutions – many of the emerging policy areas of concern to business and civil society call for multilateral cooperation. Re-vitalizing such coopera- tion does not require major changes in the organization. What is needed is willingness to engage in candid, substantive discussion of perceived problems and possible solutions. The recent Agreement on Trade Facilitation, with its positive approach to addressing development concerns, and the success of Members in incrementally deepening cooperation on some matters under the purview of some WTO agreements – e.g., addressing specific trade concerns arising from proposed new product regulations – show that WTO Members can innovate and agree to common approaches towards trade policies while recogniz- ing differences in social preferences and national circumstances

Revitalizing Multilateral Governance at the World Trade Organization Report of the High-Level Board of Experts on the Future of Global Trade Governance. Bertelsmann Policy Brief 2018

If international trade is not governed by rules, mere might dictates what is right. The World Trade Organization (WTO) serves as a place where trade policy issues are addressed, disputes arbitrated, legal frameworks derived and enforced. Through these functions, the WTO ensures that the rules of trade policy are inspired by fairness and reciprocity rather than national interest. It is more important than ever to vitalize the global public good that it rep-resents against various threats that have been undermining it. Therefore, the Global Economic Dynamics project of the Bertelsmann Stiftung has called into life a High-Level Board of Experts on the Future of Global Trade Governance. Composed of eminent experts and seasoned trade diplomats, it elaborated a series of feasible policy recommendations that will increase the effectiveness and sali-ence of the WTO. We hope that this Report provides helpful suggestions in a time marked by increasing trade disputes and protectionism and instead contributes to stronger multilateral institutions and fora.1 The Bertelsmann Stiftung owes a debt of gratitude to Prof Bernard Hoekman, the Chairman of the Expert Board and author of this report. His invaluable expertise and experience, guidance and ability to bridge controversial opinions have been crucial in defining the work of the Board. We would also like to express our sincere thanks to all our Board Members, who generously contributed their expertise, time and networks. Without their dedication, this Report would not have been possible. Finally, we would like to thank Robert Koopman and Aik Hoe Lim of the WTO for their support throughout the whole process and Christian Bluth of Bertelsmann Stiftung for managing this common endeavour

British Balance of Competence Reviews, Part I: ‘Competences about right, so far’. EPIN Working Paper No. 35, October 2013

The first in a series for a CEPS-EPIN project entitled “The British Question and the Search for a Fresh European Narrative” this paper is pegged on an ambitious ongoing exercise by the British government to review all the competences of the European Union. The intention is that this should provide a basis for informed debate before the referendum on the UK remaining in the EU or not, which is scheduled for 2017. This paper summarises the first six reviews, each of which runs to around 80 pages, covering foreign policy, development policy, taxation, the single market, food safety, and public health. The present authors then add their own assessments of these materials. While understandably giving due place to British interests, they are of general European relevance. The substantive conclusions of this first set of reviews are that the competences of the EU are judged by respondents to be ‘about right’ on the whole, which came as a surprise to eurosceptic MPs and the tabloid media. Our own view is that the reviews are objective and impressively researched, and these populist complaints are illustrating the huge gap between the views of informed stakeholders and general public opinion, and therefore also the hazard of subjecting the ‘in or out’ choice for decision by referendum. If the referendum is to endorse the UK’s continuing membership there will have to emerge some fresh popular narratives about the EU. The paper therefore concludes with some thoughts along these lines, both for the UK and the EU as a whole

Blockchain Technology - China\u27s Bid to High Long-Run Growth

Despite having the second largest economy at $13 trillion, China has only recently surpassed the World Bank’s definition of the ‘middle-income range’ which is a gross national income per capita between$1,000 to $12,000 (constant 2011 international$). This is a noteworthy accomplishment since many other developing nations have fallen victim to economic stagnation within this range leading to the term “middle-income trap”. This paper will argue that one of the ways in which China escaped the middle-income trap and will continue to grow its economic influence is through the support of blockchain technology. Research and development, early technological adoption and business climate all play a role in explaining how the Chinese public and private sector have used blockchain technology to encourage economic growth. While there are many questions and misconceptions about blockchain technology and its place in China, this paper seeks only to answer a select few

Peer-to-peer and community-based markets: A comprehensive review

The advent of more proactive consumers, the so-called "prosumers", with production and storage capabilities, is empowering the consumers and bringing new opportunities and challenges to the operation of power systems in a market environment. Recently, a novel proposal for the design and operation of electricity markets has emerged: these so-called peer-to-peer (P2P) electricity markets conceptually allow the prosumers to directly share their electrical energy and investment. Such P2P markets rely on a consumer-centric and bottom-up perspective by giving the opportunity to consumers to freely choose the way they are to source their electric energy. A community can also be formed by prosumers who want to collaborate, or in terms of operational energy management. This paper contributes with an overview of these new P2P markets that starts with the motivation, challenges, market designs moving to the potential future developments in this field, providing recommendations while considering a test-case

Legislative Threats

The Article presents a theory of legislative threats that pierces the fundamental concept of the legal system as a regulatory institution and more generally as a mechanism of social governance. It examines ten case studies that demonstrate the use of legislative threats in diverse areas of law and social policy. Conceptually, legislative threats encompass a variety of threats that legislators exert on firms and financial institutions, organizations and institutional shareholders, professions and industrial sectors, universities and public institutions, federal agencies, and possibly even U.S. states, according to which legislators will exercise their legislative mandate and enact adverse legislation in order to regulate the conduct or condition in question, unless the recipients of the threat alter their behavior so as to bring it in line with the legislators’ demands (Implicit in the threat is the inverse promise that the legislators will forgo the threatened legislation if, and only if the recipients of the threat comply with the demands). The Article also offers an analytic taxonomy of threats that includes explicit, implicit, and anticipatory legislative threats. Using non-cooperative game-theory, the Article models the strategic interaction between legislators and threat-recipients and generates predictions concerning the inducement effect of legislative threats on behavior. Specifically, the analysis considers conditions that may render threats credible, including (i) legislators’ pre-game commitment; (ii) legislators’ reputation; and (iii) legislators’ emotional motivations. The analysis also examines (i) the effects of the probabilistic nature of legislative threats; (ii) the effects of imperfect and asymmetric information on the threat’s inducement effects; (iii) the effects of legislative threats on the properties of regulatory bargaining in the shadow of the threat (e.g., the magnitude of transaction costs, information revelation, and degree of contractual incompleteness); and (iv) the effects of strategic interaction within homogenous and heterogeneous as well as organized and unorganized groups on threat-induced compliance. The Article considers the effects of legislative threats on (i) social control efficacy and (ii) democratic and constitutional legitimacy. To that end, the analysis highlights functional and institutional considerations pertaining, respectively, to the comparative capacity of legislative threats to effectively control behavior in an increasingly-complex and information-intensive social reality; and to various political, constitutional, and democratic implications arising from the use of legislative threats. Functional considerations include: (i) the asymmetric information of social planners and its effects on social control; (ii) the superiority of threat-induced self-regulation of conduct compared with “top down” regulation of conduct; (iii) the capacity of threat-induced self-regulation to accommodate rapidly-changing demands of social control; and (iv) the effects of threat-induced self-regulation on reducing the costs of law enforcement. In this respect, the analysis advances the following claim: legislative threats can be viewed as a spontaneous response to the institutionally-handicapped position of lawmakers and to the limits of the law in effectively controlling social activities; to that end, legislative threats are designed to reduce information and transaction costs of policy-making and regulatory bargaining. Institutional considerations encompass ways in which the use of legislative threats enables legislators and regulators to evade procedural safeguards, institutional constraints, and substantive controls designed to limit the power to make law and effect policy changes. These considerations are based upon the following observations: (i) using legislative threats, legislators opt-out of the “rules of the game,” disenfranchise fellow legislators, and are therefore able to effect policy changes notwithstanding a possible lack of majoritarian support; (ii) legislative threats disenfranchise the executive branch by preventing a possible presidential veto and by sidestepping the government’s role in law enforcement; (iii) legislative threats disenfranchise the states by redrawing the federal-state allocation of regulatory powers; (iv) legislative threats bypass constitutional safeguards by evading judicial review of statutes; and (v) legislative threats disenfranchise the judiciary by circumventing precedent-setting interpretation of statutes. The Article argues that notwithstanding the superior functional capacity of legislative threats to control behavior in an increasingly-complex and information-intensive society, the institutionally-unregulated and politically-unaccountable use of implicit and explicit threats poses formidable normative challenges for the most treasured attributes of American constitutional democracy. On balance, it seems that even though the benefits of legislative threats may exceed their short-term cost (thus becoming efficient in the short-term), in the long-term the reverse is true, thus suggesting that the best domain of legislative threats consists, in fact, of an empty set. For, any increase in individual well-being and aggregate social welfare—due to the improved efficacy of social control—is inevitably outweighed by a higher commensurate decrease in well-being and social welfare, reflecting in turn the toll of violating constitutional and democratic principles; the negative impact on societal stability and the disincentive on private investment; and the consequential decline in economic growth. In turn, the discussion develops a social control scheme that is rooted in the province of legislation and is designed to ensure the socially-optimal trade-off between regulatory efficacy and the toll on democratic accountability, namely: an outcome-oriented or risk-focused, deferred-implementation, contingent sunset legislation. Lastly, the Article argues that the exponential increase in the complexity of activities and the rapid changes in behavior across all social domains are two major sources of growth-driven social instability. Paradoxically, absent effective social control, the processes that drive well-developed market economies towards economic growth and social progress, may ultimately propel their economic decline, increase social instability, and lead to their gradual societal deterioration. Thus, the more advanced a society becomes the more demanding is the lawmakers’ role. Viewed from this perspective, the emergence of legislative threats—though institutionally illegitimate and socially unwarranted—demonstrates the limits of law and the severe limitations of lawmakers. Moreover, they underscore the growing incapacity of the legal system to deliver its pre-eminent promise: to maintain ordered liberty and to promote sound public policies. Viewed from an ever broader perspective, the widespread use of legislative threats demonstrates an increasing tendency towards (what I label) a second-order social control system, where legislators establish second-order rules designed to create the incentives necessary to induce entities and groups to adopt socially-desired rules of conduct. Inevitably, the trend toward second-order social control diminishes the traditionally-extensive role of the regulatory state, but increases the power of groups that, in shaping their regulatory environment, practically turn into islands of self-regulation

Consumers First: Smart Regulation for Digital Australia

This paper investigates principles-based regulation and whether or not it should be adopted as an appropriate regulatory framework for consumer protection in Australian digital communications. It argues that principles-based regulation is superior to rules-based regulation because it gives each business the flexibility to meet regulatory obligations in the most efficient way while also empowering the regulator to playa more effective role in ensuring consumer protection in a fast moving sector. Such an approach helps consumers by making their welfare, rather than compliance with a set of rules, the focus of regulation and helps business by focusing regulation on outcomes rather than detailed regulatory procedures

Currency Undervaluation and Sovereign Wealth Funds: A New Role for the World Trade Organization

Two aspects of global imbalances—undervalued exchange rates and sovereign wealth funds (SWFs)—require a multilateral response. For reasons of inadequate leverage and eroding legitimacy, the International Monetary Fund (IMF) has not been effective in dealing with undervalued exchange rates. We propose new rules in the World Trade Organization (WTO) to discipline cases of significant undervaluation that are clearly attributable to government action. The rationale for WTO involvement is that there are large trade consequences of undervalued exchange rates, which act as both import tariffs and export subsidies, and that the WTO's enforcement mechanism is credible and effective. The WTO would not be involved in exchange rate management, and our proposals do not entail the WTO displacing the IMF: Rather, they would harness the comparative advantage of the two institutions, with the IMF providing the essential technical expertise in the WTO enforcement process. On SWFs, there is a bargain to be struck between countries with SWFs, which want secure and liberal access for their capital, and capital-importing countries that have concerns about the objectives and operations of SWFs. The WTO is the natural place to strike this bargain. Its services agreement, the General Agreement on Trade in Services (GATS), already covers investments by SWFs, and other agreements offer a precedent for designing disciplines for SWFs. Placing exchange rates and SWFs on the trade negotiating agenda may help revive the Doha Round by rekindling the interest of a wide variety of groups, many of whom are currently disengaged from the round.exchange rates, undervaluation, sovereign wealth funds, World Trade Organization, International Monetary Fund

Efficient Relocation of Spectrum Incumbents

Changes in technologies and in consumer demands have made prior radio spectrum allocations far from efficient. To address this problem the FCC has recently reallocated spectrum for more flexible use in bands that are partially occupied by incumbent license holders. Often, it is necessary for the new license holder to relocate incumbents to make efficient use of the spectrum. Regulations structuring the negotiation between incumbent and new entrant can promote efficiency. In particular, giving the new entrant the right to move the incumbent with compensation can reduce negotiation costs and promote efficiency when there is private information about spectrum values but good public information about the cost of relocating the incumbent. We examine the experience of broadband PCS entrants in relocating microwave incumbents. We conclude with some remarks on how these ideas might be applied to digital television spectrum.Bargaining; Auctions; Spectrum Auctions; Telecommunications Policy