world trade regime, the WTO and large scale crises: Perspectives after the Pittsburg G20 Summit.

One year after the collapse of Lehman Brothers and three years after the start of the food and commodities crisis, time seems ripe to make a provisional assessment of the resilience of the open trade policies to this severe downturn, and to draw the main lessons. In attempting to answer this question, we need to make a distinction between the “world trade regime” and the World Trade Organization (WTO). The former consists in all the multilateral, plurilateral and unilateral trade policies. Sometimes such policies amplify WTO weaknesses. But, sometimes they amplify WTO disciplines, as during the past year (see section 1). The WTO, with its key disciplines and its dispute settlement mechanism, is the undisputed legal skeleton of the world trade architecture. But, it is in a great need to adjust to a faster-moving, often chaotic, world trade regime. The distinction between the WTO and the world trade regime is even more crucial since the designation of the G20 as the “premier forum” for the international economic cooperation between the largest world economies [Pittsburgh Summit communiqué]. Korea which holds the G20 Chair for 2010 (and Canada the host the G20 in Spring) will have the major task to develop this new architecture—weaving together the G20, the WTO and the other traderelated international institutions.

Three variations on 'The Future on the WTO'.

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Tariff rebalancing helps both Europe and Doha.

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Agriculture in the Doha Agenda

The author looks at the OECD domestic political economy associated with ongoing WTO farm negotiations, focusing on the OECD-based coalitions which could be helpful for WTO negotiators. Support from individual final consumers and taxpayers is far from guaranteed because consumers are spending less and less on food, and because taxpayers support, more or less willingly, non-trade concerns, such as environment or food safety, that they tend (wrongly) to associate with domestic farmers. As a result, trade negotiators should look at other allies. A natural candidate is a powerful group of consumers-the agribusiness industries-for which a reduction of the still high protection of their products under the Doha Round requires a corresponding reduction of protection in their farm inputs. They should also talk to farmers, hence sharpen their arguments, in particular by focusing on the distinction between small and large farmers, the latter being by far the main beneficiaries of the current OECD farm protectionist policies.Agribusiness&Markets,Environmental Economics&Policies,Agricultural Research,Economic Theory&Research,Agricultural Knowledge&Information Systems,Agribusiness&Markets,Crops&Crop Management Systems,Economic Theory&Research,Livestock&Animal Husbandry,Environmental Economics&Policies

Need for Coherence Among the WTO’s Escape Clauses.

MANY governments think they could not secure the support of domestic producer interests for the trade-liberalizing agreements they negotiate with other countries without provisions in them that permit a degree of flexibility in implementing the core obligations they undertake in the event of unforeseeable or even foreseeable problems. 1 Thus in the General Agreement on Tariffs and Trade (GATT) there are “escape clauses” that, as exceptio ns to the rules, allow members to exceed their tariff bindings and impose import restrictions that would otherwise violate GATT articles.2 The result is a constant tension between the rules drawn to permit limited exceptions to general GATT obligations and constant pressures in member countries of the World Trade Organization (WTO) to expand the escape clauses to provide protection to politically powerful constituencies – often without much regard for the limits within the GATT – in the other direction. General GATT obligations include Articles I, II, II and XI. Politics dictate the pressures that predominate, but, to ensure that protectionist pressures do not gain excessively, the different escape clauses in the WTO must be narrowly defined. They are justified in various ways. There is little or no coordination or consistency left, however, between the terms under which they are applicable, given all the changes that have taken place with the rapid integration of the world economy since the GATT came into being in 1948.

Impact of Trade and Capital Movements on Labour: Evidence on the French Case.

This paper examines the impact of trade and capital movements on French employment and relative wages. It provides three results. First, trade has a modest impact on total employment. Second, trade has a strong impact on relative wages; the paper provides evidence supporting the saying that liberal trade is associated with better jobs rather than more jobs. Lastly, the paper shows that outward FDI is essentially done by exporting sectors and that inward FDI (which is broadly the same magnitude) occurs in the downsizing industries as well as in the exporting sectors.

Problems of transposition and Members States “screening” process and timetable.

As requested by the Committee on the Internal Market and Consumer Protection, this note focuses on Articles 14 and 15 of the proposed Directive on services. These two provisions are crucial: they define the “screening” process and the timetable which will make operational the “country of origin” principle (Article 16) on which the Directive crucially relies. As these two provisions raise economic more than legal questions, this note focuses on the economics of the Directive.

Agricultural Liberalization in the Doha Round.

The analysis of agricultural liberalization reveals very large potential gains for both developed and developing countries that will come especially from own-country liberalization as well as from inter-country trade, significant benefits that may be realized by the poorest developing countries, and limited benefits from existing preferential agricultural arrangements. An ideal program for agricultural liberalization in the Doha Round would involve substantial reductions in the high tariffs that exist in both developed and developing countries using the Swiss formula approach and limiting exceptions and special and differential treatment, elimination of agricultural export subsidies, and making meaningful reductions in domestic supports. The negotiations should not get hung up on issues of food security and the effects of higher prices for low-income consumers, and a special safeguard for agriculture is not recommended. It is imperative that agricultural liberalization should be combined with appropriate domestic policies and actions and international assistance, if needed, to help finance emergency food inventories and aid to disadvantaged groups.agriculture;Doha;WTO;

Climate change and trade policy : from mutual destruction to mutual support

Contrary to what is still often believed, the climate and trade communities have a lot in common: a common problem (a global"public good"), common foes (vested interests using protection for slowing down climate change policies), and common friends (firms delivering goods, services, and equipment that are both cleaner and cheaper). They have thus many reasons to buttress each other. The climate community would enormously benefit from adopting the principle of"national treatment,"which would legitimize and discipline the use of carbon border tax adjustment and the principle of"most-favored nation,"which would ban carbon tariffs. The main effect of this would be to fuel a dual world economy of clean countries trading between themselves and dirty countries trading between themselves at a great cost for climate change. And the trade community would enormously benefit from a climate community capable of designing instruments that would support the adjustment efforts to be made by carbon-intensive firms much better than instruments such as antidumping or safeguards, which have proved to be ineffective and perverse. That said, implementing these principles will be difficult. The paper focuses on two key problems. First, the way carbon border taxes are defined has a huge impact on the joint outcome from climate change, trade, and development perspectives. Second, the multilateral climate change regime could easily become too complex to be manageable. Focusing on carbon-intensive sectors and building"clusters"of production processes considered as having"like carbon-intensity"are the two main ways for keeping the regime manageable.Developing them in a multilateral framework would make them more transparent and unbiased.Climate Change Mitigation and Green House Gases,Climate Change Economics,Emerging Markets,Carbon Policy and Trading,Debt Markets

Preparing Negotiations in Services: EC Audiovisuals in the Millenium Round. The World Services Congress on “Services: Generating Global Growth and Opportunity'.

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