Publication: From Doha to the Next Bretton Woods : A New Multilateral Trade Agenda
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Published
2009
ISSN
00157120
Date
2012-03-30
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Abstract
Trade problems are an underlying cause of the financial crisis. To truly revive the world economy, a new trade consensus is necessary.
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Publication Multilateralism beyond Doha(World Bank, Washington, DC, 2008-09)There is a fundamental shift taking place in the world economy to which the multilateral trading system has failed to adapt. The Doha process focused on issues of limited significance while the burning issues of the day were not even on the negotiating agenda. This paper advances five propositions: (i) the traditional negotiating dynamic, driven by private sector interests largely in the rich countries, is running out of steam; (ii) the world economy is moving broadly from conditions of relative abundance to relative scarcity, and so economic security has become a paramount concern for consumers, workers, and ordinary citizens; (iii) international economic integration can contribute to enhanced security; (iv) addressing these new concerns - relating to food, energy, and economic security - requires a wider agenda of multilateral cooperation, involving not just the WTO but other multilateral institutions; and (v) despite shifts in economic power across countries, the commonality of interests and scope for give-and-take on these new issues make multilateral cooperation worth attempting.Publication India and the Multilateral Trading System after Seattle : Toward a Proactive Role(World Bank, Washington, DC, 2000-06)The authors argue that India should engage more actively in the multilateral trading system for four reasons: First, such engagement could facilitate domestic reform, and improve access to export markets. If the government could show that domestic reform would pay off with increased access to markets abroad, those who gain from such access - whether they export textiles, software, professional services, or other products - could represent a countervailing voice to reform's opponents. In turn, the need for this external payoff to secure domestic reform makes India a credible bargainer, which could induce trading partners, to open their markets to India. Second, external commitments can foster good domestic policies, by providing guarantees against the reversal of current policies, or lending credibility to promises of future reform. Such pre-commitments could help strike a balance between the reluctance to unleash competition immediately, and the desire not to be held perpetual hostage to vested interests, or weak domestic industries. Third, engagement can help enforce India's market access rights. If other countries do not eliminate quotas on textiles, and clothing as scheduled, India can credibly threaten to withdraw its obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). Fourth, multilateral tariff reduction could reduce the disadvantage (to India) of not being part of regional agreements. The value of multilateral engagement might be limited, if the prospects for securing increased market access are dim, as the failed Seattle negotiations might appear to suggest. India must credibly test negotiating pessimism by showing its willingness to open its markets in return for improved access to foreign markets. Success is not certain, but India's chances are improved if aligns itself with countries pressing for sound policies of open trade.Publication China and the World Trading System(2011-12-01)The World Trade Organization has been until recently an effective framework for cooperation because it has continually adapted to changing economic realities. The current Doha Agenda is an aberration because it does not reflect one of the largest shifts in the international economic and trading system: the rise of China. Although China will have a stake in maintaining trade openness, an initiative that builds on but redefines the Doha Agenda would anchor China more fully in the multilateral trading system. Such an initiative would have two pillars. The first is a new negotiating agenda that would include the major issues of interest to China and its trading partners, and thus unleash the powerful reciprocal liberalization mechanism that has driven the World Trade Organization process to previous successes. The second is new restraints on bilateralism and regionalism that would help preserve incentives for maintaining the current broadly non-discriminatory trading order.Publication Currency Undervaluation and Sovereign Wealth Funds : A New Role for the World Trade Organization(World Bank, Washington, DC, 2008-07)Two aspects of global imbalances - undervalued exchange rates and sovereign wealth funds - require a multilateral response. For reasons of inadequate leverage and eroding legitimacy, the International Monetary Fund has not been effective in dealing with undervalued exchange rates. This paper proposes new rules in the World Trade Organization 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 World Trade Organization would not be involved in exchange rate management, and would not displace the International Monetary Fund. Rather, the authors suggest ways to harness the comparative advantage of the two institutions, with the International Monetary Fund providing the essential technical expertise in the World Trade Organization's enforcement process. There is a bargain to be struck between countries with sovereign wealth funds, which want secure and liberal access for their capital, and capital-importing countries, which have concerns about the objectives and operations of sovereign wealth funds. The World Trade Organization is the natural place to strike this bargain. Its General Agreement on Trade in Services, already covers investments by sovereign wealth funds, and other agreements offer a precedent for designing disciplines for these funds. Placing exchange rates and sovereign wealth funds on the trade negotiating agenda may help revive the Doha Round by rekindling the interest of a wide variety of groups.Publication Currency Undervaluation and Sovereign Wealth Funds: A New Role for the World Trade Organization(2009)Two aspects of global imbalances--undervalued exchange rates and sovereign wealth funds--require a multilateral response. For reasons of inadequate leverage and eroding legitimacy, the International Monetary Fund has not been effective in dealing with undervalued exchange rates. This paper proposes new rules in the World Trade Organization 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 World Trade Organization would not be involved in exchange rate management, and would not displace the International Monetary Fund. Rather, the authors suggest ways to harness the comparative advantage of the two institutions, with the International Monetary Fund providing the essential technical expertise in the World Trade Organization's enforcement process. There is a bargain to be struck between countries with sovereign wealth funds, which want secure and liberal access for their capital, and capital-importing countries, which have concerns about the objectives and operations of sovereign wealth funds. The World Trade Organization is the natural place to strike this bargain. Its General Agreement on Trade in Services already covers investments by sovereign wealth funds, and other agreements offer a precedent for designing disciplines for these funds. Placing exchange rates and sovereign wealth funds on the trade negotiating agenda may help revive the Doha Round by rekindling the interest of a wide variety of groups.
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