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  • Author: Masahito Ambashi
  • Publication Date: 01-2017
  • Content Type: Policy Brief
  • Institution: Economic Research Institute for ASEAN and East Asia (ERIA)
  • Abstract: This policy brief presents an overview of the ASEAN economy in terms of its economic relationship with multinationals, particularly Japanese companies, that have long invested in this region. ASEAN has been an attractor of foreign direct investment (FDI). Business interest in ASEAN has increased again recently due to the (i) relatively low wage of ASEAN compared to China, (ii) establishment of the ASEAN Economic Community (AEC), (iii) economic partnership network with a core of ASEAN countries, (iv) large-scale market covered by ASEAN, and (v) rise of CLMV countries (Cambodia, Lao PDR, Myanmar, and Viet Nam). In these trends, ASEAN has established a reciprocal economic relationship with other countries and regions. To develop its economy, ASEAN member states are expected to further advance the AEC at a high level. Hence, ASEAN must address challenges such as deepening further economic integration and narrowing development gaps in the region. Most importantly, ASEAN still needs to increase the attractiveness of its 'whole region' as an essential and integral part of global value chains to draw further FDI.
  • Topic: Economics, International Political Economy, International Trade and Finance, Global Political Economy
  • Political Geography: Japan, Southeast Asia
  • Author: Mark Hallerberg, Christopher Gandrud
  • Publication Date: 03-2017
  • Content Type: Policy Brief
  • Institution: Bruegel
  • Abstract: Japan serves as a cautionary tale for Italy on how to clean up banking-sector problems. A general lesson is the need for policies to forthrightly address non-performing loans (NPLs) in countries with widespread banking problems. This helps address zombie banks and sluggish economic growth. The Japanese experience indicates that three elements are necessary to address NPLs: (a) sufficiently capitalised banks that can take losses from NPL write-downs; (b) an independent regulator that can identify problems and force action; and (c) tools to manage the orderly disposal of NPLs. The problem is not that this combination of policy tools is unknown, but that banks and governments lack incentives to use them in combination. Italy’s December 2016 package providing €20 billion for recapitalisation of banks is a step in the right direction. Similarly, pressure from the European Central Bank on Italian authori- ties and on banks to address NPLs is welcome. However, policy tools to manage and dispose of NPLs and, just as importantly, incentives to use them, are lacking. In January 2017, the European Banking Authority published a set of policy proposals for NPL resolution. Those include national and European-level public asset management companies (AMC), also known as ‘bad banks’. We argue that in Italy, the incentives to use such tools and dispose of NPLs have been weak.
  • Topic: International Trade and Finance, Political Economy, Economic structure, Global Political Economy
  • Political Geography: Japan, Italy
  • Author: Uuriintuya Batsaikhan, Robert Kalcik, Dirk Schoenmaker
  • Publication Date: 02-2017
  • Content Type: Policy Brief
  • Institution: Bruegel
  • Abstract: London is an international financial centre, serving European and global clients. A hard Brexit would lead to a partial migration of financial firms from London to the EU27 (EU minus UK) to ensure they can continue to serve their EU27 clients. Four major cities will host most of the new EU27 wholesale markets: Frankfurt, Paris, Dublin and Amsterdam. These cities have far fewer people employed in finance than London. Moreover, they host the European headquarters of fewer large companies. The partial migra- tion of financial firms will thus have a major impact on these cities and their infrastructures. Banks are the key players in wholesale markets. United States and Swiss investment banks, together with one large German and three large French banks, will make up the core of the new EU27 wholesale markets. Some Dutch, Italian and Spanish banks are in the second tier. The forex, securities and derivatives trading markets are now in London. We map the current, limited market share of the four major cities that might host the EU27 client business. The expected migration of financial trading will lead to a large increase in trading capacity (eg bank trading floors). Clearing is the backbone of modern financial markets. A comparative overview of clearing facilities in the EU27 shows that Germany and France have some clearing capacity, but this will need to be expanded. The ownership of clearing is often intertwined with stock exchanges. Were the planned LSE-Deutsche Börse merger to go ahead, LSE would sell the Paris subsidiary of its clearinghouse. In terms of legal systems, there is an expectation that trading activities will be able to continue under English contract law, also in the EU27. A particular challenge is to develop FinTech (financial technology) in the EU27, as this innovative part of the market is currently based in London. We estimate that some 30,000 jobs might move from London to the EU27. This will put pressure on the facilities (infrastructure, offices, residential housing) in the recipient cities. The more the European Union market for financial services is integrated, the less need there will be for financial firms to move to one location, reducing the pressure for all facilities to be in one city (see Sapir et al, 2017, which is a companion piece to this paper).
  • Topic: International Political Economy, International Trade and Finance, Brexit
  • Political Geography: Britain, Europe
  • Author: Maria Demertzis, André Sapir, Guntram Wolff
  • Publication Date: 02-2017
  • Content Type: Policy Brief
  • Institution: Bruegel
  • Abstract: The United States is the European Union’s most important trade and bilateral investment partner, which has, until now, supported a multilateral trade system and European integration and has provided a security guarantee to the countries of the EU. But like other advanced economies, the US’s relative weight in the global economy has declined. The new US administration seems intent on replacing multilateralism with bilateral deals. In trade, it aims to secure new trade deals in order to reduce bilateral trade deficits and to protect, in particular, the US manufacturing sector. In climate policy, the US commitment to the Paris Agreement is being questioned. In defence, the security umbrella appears less certain than previously. The overall promise behind this change of direction is to put ‘America first’ and deliver better results for US citizens.
  • Topic: International Political Economy, International Trade and Finance, Bilateral Relations, Multilateral Relatons, Political stability
  • Political Geography: Europe, United States of America
  • Author: Andre Sapir, Dirk Schoenmaker, Nicolas Veron
  • Publication Date: 02-2017
  • Content Type: Policy Brief
  • Institution: Bruegel
  • Abstract: The United Kingdom’s exit from the European Union creates an opportunity for the remaining EU27 to accelerate the development of its financial markets and to increase its resilience against shocks. Equally, Brexit involves risks for market integrity and stability, because the EU including the UK has been crucially dependent on the Bank of England and the UK Financial Conduct Authority for oversight of its wholesale markets. Without the UK, the EU27 must swiftly upgrade its capacity to ensure market integrity and financial stability. Furthermore, losing even partial access to the efficient London financial centre could entail a loss of efficiency for the EU27 economy, especially if financial developments inside the EU27 remain limited and uneven.
  • Topic: Economics, International Political Economy, International Trade and Finance, Political stability, Brexit
  • Political Geography: Britain, Europe
  • Author: Zsolt Darvus
  • Publication Date: 01-2017
  • Content Type: Policy Brief
  • Institution: Bruegel
  • Abstract: The ‘poverty’ target set by the European Commission aims to lift “over 20 million people out of poverty” between 2008 and 2020 in the EU27. Progress to date against this target has been disappointing. Why is it so hard to reach the Europe 2020 ‘poverty’ target? What does the poverty indicator actually measure?
  • Topic: Economics, International Political Economy, International Trade and Finance, Poverty
  • Political Geography: Europe
  • Author: Antoni Estevadeordal
  • Publication Date: 04-2017
  • Content Type: Policy Brief
  • Institution: The Brookings Institution
  • Abstract: On February 22, 2017, the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA) entered into force. The TFA was concluded at the WTO Bali Ministerial Conference in 2013. Since then, countries have been working on implementing the agreement in their domestic markets to reach the two-thirds requirement for implementation.[1] As of March 2017, 113 members (or 69 percent of WTO members) have ratified the agreement—including 19 Latin American and Caribbean (LAC) countries—and another 93 countries have notified the WTO of their timeline for each TFA provision, giving a comprehensive picture of the state of the agreement.
  • Topic: International Political Economy, International Trade and Finance
  • Political Geography: Global Focus
  • Author: Colin I. Bradford, Roger Burkhardt
  • Publication Date: 03-2017
  • Content Type: Policy Brief
  • Institution: The Brookings Institution
  • Abstract: In this policy brief, we discuss the importance of accelerated private investment in skill development of labor as a means to increase the competitiveness of firms, to create value added by workers, and to boost wages and social mobility. This brief was used at the VISION 20 Workshop held at the Brookings Institution on February 27, 2017, to help generate new “big picture” policy approaches for the German G-20 Summit in Hamburg in July. The workshop was sponsored by the University of British Columbia Institute for Asia Research, the Munk School at the University of Toronto, the Boell Foundation, and the Friedrich Ebert Stiftung with the participation of the Kiel Institute for the World Economy and the German Development Institute.
  • Topic: International Trade and Finance, Social Movement, International Development
  • Political Geography: Global Focus
  • Author: Susan Schadler
  • Publication Date: 10-2017
  • Content Type: Policy Brief
  • Institution: Centre for International Governance Innovation
  • Abstract: So far, the International Monetary Fund (IMF) has defied the odds in its relations with the administration of US President Donald Trump. In contrast to the administration’s at times stormy ride with some other international organizations and agreements, relations have been rather calm — even friendly — between the United States and the IMF. There has been no talk of cutting US funding to the IMF, no threat of pulling out of the organization, no statements casting aspersions on the IMF and no “tweet storms” on specific events involving the IMF. In fact, although not directly from President Trump, statements in support of actions or positions of the IMF have surfaced. Why has the IMF escaped the antagonism of the new administration, and can it continue to do so?
  • Topic: International Political Economy, International Trade and Finance
  • Political Geography: Global Focus
  • Author: Carolina Salgado, Marek Wasinski
  • Publication Date: 03-2016
  • Content Type: Policy Brief
  • Institution: The Polish Institute of International Affairs
  • Abstract: The Visegrad Group is still a new label among policy makers as well as public and private investors, scholars and media in Brazil. However, since their accession to the EU in 2004, and the financial crisis that started in 2008, the four Central European countries in this group have started to look beyond Europe in order to formulate their economic and political agenda, aiming to boost partnerships, for example among the biggest South American countries such as Brazil. V4 and Brazil should build momentum to deepen cooperation in the most promising prospective areas such as trade, military, tourism and education.
  • Topic: Economics, International Trade and Finance, Politics, Financial Crisis
  • Political Geography: Brazil
  • Author: Justyna Szczudlik
  • Publication Date: 02-2016
  • Content Type: Policy Brief
  • Institution: The Polish Institute of International Affairs
  • Abstract: Asia could be described as the world’s great construction site, and is already the focus of a scramble for infrastructure projects. Among countries competing for investments are not only China with its Silk Road initiative, but also Korea, Japan, India and ASEAN, which have prepared their own infrastructural strategies. The plethora of initiatives may have a positive impact on Asia, offering diverse solutions to the infrastructural bottleneck and reforms of existing institutions and modes of assistance. But there is also the risk that fierce competition may result in unprofitable projects, while economic slowdown could cause a decline in funding. For Europe these initiatives create opportunities to take part in new projects, but the EU should be aware that the projects will be implemented mainly in Asia and by Asian countries.
  • Topic: Economics, International Trade and Finance, Infrastructure, Reform
  • Political Geography: Asia
  • Author: Damian Wnukowski
  • Publication Date: 02-2016
  • Content Type: Policy Brief
  • Institution: The Polish Institute of International Affairs
  • Abstract: The transformation of ASEAN into an economic community is a significant step in the organisation’s integration process. The project, formally launched at the beginning of 2016, aims at creation of a single market of more than 620 million people, loosens the flow of goods, services and investment, which should underpin regional economic growth and catch the attention of foreign businesses. However, obstacles to economic cooperation remain, such as limitations on the movement of labour or capital, which shows that the integration process is not yet complete. The EU, which can benefit from a well-functioning market in this region, should share its own experience to support the ASEAN integration process.
  • Topic: Economics, International Trade and Finance, Markets, Politics, Labor Issues
  • Political Geography: Europe
  • Author: Stanislav Secrieru
  • Publication Date: 01-2016
  • Content Type: Policy Brief
  • Institution: The Polish Institute of International Affairs
  • Abstract: Although Transnistria, in exchange for meeting certain conditions, was allowed to benefit from the free trade agreement that Moldova signed with the EU, there are plenty of obstacles which could derail the deal. The business community in the breakaway republic is eager to enjoy the fruits of the DCFTA but is reluctant to shoulder the price of necessary reforms, the outgoing leader of the separatist enclave could undermine the agreement for electoral reasons, Russia might be tempted to test the EU’s resolve to defend its trade-related norms, and Moldova could erect bureaucratic barriers for producers from the left bank of the Nistru River. In the light of these many risks, the EU should persistently encourage all sides to stick to their commitments while averting disputes that would undermine enforcement of the DCFTA in Transnistria in a timely manner.
  • Topic: Economics, International Trade and Finance, Politics, Elections, European Union
  • Political Geography: Moldova, Transnistria
  • Author: Wei Wang, Gemma Estrada, Jurgen Conrad, Sang-Hyop Lee, Donghyun Park
  • Publication Date: 05-2016
  • Content Type: Policy Brief
  • Institution: East-West Center
  • Abstract: As demand from global markets declines, slowing exports of manufactured goods from the People's Republic of China means the country must increasingly rely on domestic markets for growth. Unlike manufactured goods, services—those "intangible" products that include everything from transportation to scientific research to real estate services—are geared more toward domestic markets. Services, then, will be key to the rebalancing process. However, while the service sector has grown rapidly in the PRC, it continues to lag behind other countries at similar stages of development. In addition, the sector is dominated by traditional low-end types of services, rather than knowledge-intensive services. Heavy regulatory burdens, barriers to trade in services, and an unfavorable policy environment have been major obstacles to upgrading the sector and improving its competitiveness. Policy reform should focus on strengthening competition to raise productivity, with the goal of increasing not only the number of jobs and contribution to GDP, but also of positioning the service sector to compete internationally and spur export growth.
  • Topic: International Trade and Finance, Markets, Political Economy, Reform, GDP
  • Political Geography: China
  • Author: Maaike Okano-Heijmans
  • Publication Date: 11-2016
  • Content Type: Policy Brief
  • Institution: Clingendael Netherlands Institute for International Relations
  • Abstract: Today’s uncertainty in cross-Strait relations is not without consequence for third parties that maintain ties with both China and Taiwan. To what extent does (and should) the situation also impact on EU’s trade diplomacy with both sides? This policy brief argues that under today’s circumstances, the cold peace in cross-Strait relations is reason to tread carefully — and to stay on course. The May 2016 inauguration of the Taiwanese government led by Democratic Progressive Party (DPP) leader Tsai Ing-wen placed a big question mark over the future of cross-Strait relations. Within weeks, Beijing had unilaterally imposed a freeze on (semi-)official talks until the new Taiwanese President acknowledges the so-called 1992 Consensus. While confirming its ‘one China’ policy, the EU may contribute to the stability of cross-Strait relations by being a partner in China’s economic reform and by negotiating EU–China and EU–Taiwan investment agreements in parallel. In this policy brief author Maaike Okano-Heijmans builds on discussions during the 13th Symposium on ‘Sino–EU Relations and the Taiwan Question’, which was held in Shanghai from 9–11 October 2016 and in Taipei from 12–14 October 2016. These second-track dialogues were supported by the Friedrich Ebert Stiftung, the Shanghai Institute of International Studies and the Taiwanese Ministry of Foreign Affairs.
  • Topic: International Relations, Foreign Policy, Diplomacy, International Political Economy, International Trade and Finance
  • Political Geography: China, Taiwan, European Union
  • Author: Fukunari Kimura, Lurong Chen
  • Publication Date: 03-2016
  • Content Type: Policy Brief
  • Institution: Economic Research Institute for ASEAN and East Asia (ERIA)
  • Abstract: As mega free trade agreements (FTAs) are reshaping the rules of global governance, there is urgency for member states of the Association of Southeast Asian Nations (ASEAN) to take proper actions in response to the changing world economic order. On one hand, they should closely observe the progress of negotiations and follow up the issues that are under discussion in mega FTAs. On the other hand, they have to accelerate the pace in concluding the negotiations of the Regional Comprehensive Economic Partnership (RCEP).
  • Topic: Economics, International Trade and Finance, Global Political Economy
  • Political Geography: Southeast Asia, Global Focus
  • Author: Fukunari Kimura, Lurong Chen, Maura Ada Iliuteanu, Shimpei Yamamoto, Masahito Ambashi
  • Publication Date: 04-2016
  • Content Type: Policy Brief
  • Institution: Economic Research Institute for ASEAN and East Asia (ERIA)
  • Abstract: Intellectual property rights (IPR) protection is essential for economic growth, innovation, and competitiveness. As the global economy is increasingly organised within global value chains, disciplining and enforcing IPR in a coherent manner internationally has become a critical issue in the 21st century trade system. The Trans-Pacific Partnership (TPP) agreement flags America's achievement in setting new standards on international IPR enforcement under a plurilateral framework that involves countries from Asia-Pacific. Yet such standards run the risk of becoming the new norm at the international level. Reaching agreement on the text of the TPP signals emerging Asian economies' heightened commitment to IPR enforcement. Some factors that policymakers may want to consider include the following: Efficient IPR protection at the domestic level is integral to efforts that facilitate technology adoption and stimulate incremental innovations. It is crucial to increase public awareness of intellectual property (IP) in general and its associated rights in particular. IP laws and regulations must at least meet the requirements of the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) and always aim for higher-level standards. IPR disciplines must be binding and practically enforceable. Asian countries should actively participate in global IPR rule-making. The abundance and quality of human capital will affect not only the level of invention and other innovative activities but also the efficiency of IPR enforcemen
  • Topic: Emerging Markets, International Trade and Finance, Global Political Economy
  • Political Geography: Southeast Asia, Global Focus
  • Author: Dirk Schoenmaker
  • Publication Date: 12-2016
  • Content Type: Policy Brief
  • Institution: Bruegel
  • Abstract: What are the arguments for and against centralisation of insurance supervision? What would be the scope of a possible insurance union, and what would the legal basis be? How rapid should the move to insurance union be? This Policy Brief sets out to answer these questions.
  • Topic: Economics, International Trade and Finance
  • Political Geography: Europe
  • Author: Anubhav Gupta
  • Publication Date: 03-2016
  • Content Type: Policy Brief
  • Institution: Asia Society
  • Abstract: India’s membership in APEC would mitigate two significant problems: 1) India’s relatively poor integration into the global economy; and 2) the emergence of a divisive trade agenda in the Asia-Pacific. This issue brief outlines these challenges and highlights the obstacles and opportunities related to India’s inclusion in APEC. It concludes that this is the right time to start considering India’s membership in the forum and that a strategy is needed to chart a pathway for the country’s eventual accession to APEC.
  • Topic: International Trade and Finance, Global Political Economy
  • Political Geography: India
  • Publication Date: 10-2016
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: This paper explores both the role that local content measures can play in advancing sustainable development, and the impact that trade and investment treaties concluded over the past 20 years have had and will continue to have on the ability of governments to employ those tools. Certain local content measures had been restricted under the WTO due to wide agreement by negotiating parties that their costs outweigh their benefits. But the WTO also left a number of local content measures in governments’ policy toolboxes. As is discussed in this paper, however, that is changing, with the range of permissible actions for many countries being significantly smaller than it was even a decade ago. This narrowed policy space, in turn, can limit the steps governments can take to make progress on the universally adopted Sustainable Development Goals.
  • Topic: International Trade and Finance, International Affairs
  • Political Geography: Global Focus
  • Author: Ishrat Husain, Muhammad Ather Elahi
  • Publication Date: 08-2015
  • Content Type: Policy Brief
  • Institution: United States Institute of Peace
  • Abstract: Pakistan and Afghanistan are among each other’s largest trading partners. Though an agreement was signed in 2010 to strengthen trade relations and facilitate Afghan transit trade through Pakistan, implementation has been mixed, with many on both sides of the border complaining of continued barriers to exchange. Both nations need to improve trade facilitation through streamlined payments settlement and improved insurance mechanisms, the use of bonded carriers, visa issuance, trade financing, tax collection, and documentation.
  • Topic: Economics, Foreign Exchange, International Trade and Finance, Bilateral Relations
  • Political Geography: Pakistan, Afghanistan
  • Author: Edwin M. Truman
  • Publication Date: 01-2015
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: After the Obama administration's four failed attempts to win congressional approval of the 2010 quota and governance reform for the International Monetary Fund (IMF), it is time to recognize that implementation of the agreement may be indefinitely delayed. The international community must therefore prepare for the likelihood of a new world order in which the IMF augments its funding and reforms its governing structure without US participation. This Policy Brief examines four options for the IMF: First, wait for the US Congress to pass the necessary legislation. Second, complete a new, augmented IMF quota and governance package and again wait for the United States to give its formal approval. Third, bypass the US Congress and risk losing the US veto over a few important decisions on the structure of the IMF. Fourth, let the Fund adopt a reform and financing package within a structure that potentially excludes US participation and eliminates the US veto in the new entity.
  • Topic: Economics, International Trade and Finance, International Monetary Fund, Governance, Reform
  • Author: Ryan Rutkowski
  • Publication Date: 01-2015
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: Faced with slowing economic growth, Chinese policymakers now recognize that the service sector of the economy—transportation, communications, finance, and health care—could spur economic activity and employment. The catch is that China must reform these and other areas to accomplish this goal. Chinese leaders have outlined an ambitious agenda for reform, but myriad vested interests could slow or block their plans. This Policy Brief evaluates the steps taken so far and the difficulties that lie ahead in implementing them. If policymakers fail to reform and open up the service sector, they run the risk of seriously impairing China's growth prospects.
  • Topic: Economics, International Trade and Finance, Labor Issues, Financial Crisis, Reform
  • Political Geography: China
  • Author: Avinash D. Persaud
  • Publication Date: 04-2015
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: Solvency II, which the European Parliament adopted in March 2014, codifies and harmonizes insurance regulations in Europe to reduce the risk of an insurer defaulting on its obligations and producing dangerous systemic side effects. The new directive tries to achieve these aims primarily by setting capital requirements for the assets of insurers and pension funds based on the annual volatility of the price of these assets. Persaud argues that these capital requirements will impose an asset allocation on life insurers and pension funds that does not serve the interests of consumers, the financial system, or the economy. The main problem with Solvency II is that the riskiness of the assets of a life insurer or pension fund with liabilities that will not materialize before 10 or sometimes 20 years is not well measured by the amount by which prices may fall during the next year. Solvency II fails to take account of the fact that institutions with different liabilities have different capacities for absorbing different risks and that it is the exploitation of these differences that creates systemic resilience. To correct this problem, Persaud offers an alternative approach that is more attuned to the risk that a pension fund or life insurer would fail to meet its obligations when they come due and less focused on the short-term volatility of asset prices.
  • Topic: Economics, International Trade and Finance, Budget
  • Author: Jose De Gregorio
  • Publication Date: 04-2015
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: Latin America's recent economic performance has been disappointing. After a very strong recovery from the Great Recession, growth has slowed considerably, and prospects for 2015 are dim. Among the seven largest economies in the region, output is expected to contract in Argentina, Brazil, and Venezuela, and Chile, Colombia, Mexico, and Peru are projected to grow by only about 3 percent. The decline was not caused by external factors but was mostly cyclical in nature and a result of low productivity. Although monetary and fiscal policies may still have a role in supporting demand in some instances, the main problem in the region is not a lack of demand but low productivity growth. Efforts must be made to foster productivity. Institutional weakness must be addressed and inequality reduced if sustainable high growth is to resume.
  • Topic: Economics, International Trade and Finance, Monetary Policy, Financial Crisis
  • Political Geography: Latin America
  • Author: William R. Cline
  • Publication Date: 06-2015
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: For nearly three decades, the dominant view on the role of the financial sector in economic development has been that greater financial depth facilitates faster growth. However, the Great Recession has shaken confidence in that view because of the contributing role of high leverage and such financial innovations as collateralized subprime mortgage-backed assets and derivatives on them. Recent studies from the International Monetary Fund and Bank for International Settlements have argued that "too much finance" reduces growth. In an environment of new doubts about finance following the Great Recession, these studies finding that there can be too much of it seem to have struck a responsive chord. Cline warns that these findings should be viewed with considerable caution. He first shows that correlation without causation could similarly lead to the conclusion that too many doctors spoil growth, for example. He the demonstrates algebraically that if the variable of interest, be it financial depth, doctors, or any other good or service that rises along with per capita income, is incorporated in a quadratic form into a regression of growth on per capita income, there will be a necessary but spurious finding that above a certain point more of the good or service in question causes growth to decline. In some situations, finance can become excessive; the crises of Iceland and Ireland come to mind. But it is highly premature to adopt as a new stylized fact the recent studies' supposed thresholds beyond which more finance reduces growth.
  • Topic: Economics, International Trade and Finance, International Monetary Fund, Financial Crisis
  • Author: Caroline Freund, Sarah Oliver
  • Publication Date: 06-2015
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: Regulatory standards protect consumers from defective products, but they impede trade when they differ across countries. The Transatlantic Trade and Investment Partnership (TTIP) seeks to reduce distortions in the automobile and other industries. Freund and Oliver evaluate the equivalence of automobile regulations in the United States and the European Union in terms of catastrophe avoidance and estimate the trade gains from harmonization. The UN 1958 Agreement on automobiles, which harmonizes regulations among signatories, is used to quantify the trade effect of regulatory convergence. The removal of regulatory differences in autos is estimated to increase trade by 20 percent or more. The effect on trade from harmonizing standards is only slightly smaller than the effect of EU accession on auto trade. The large economic gains from regulatory harmonization imply that TTIP has the potential to improve productivity while lowering prices and enhancing variety for consumers.
  • Topic: Economics, International Trade and Finance, Treaties and Agreements, European Union
  • Political Geography: Global Focus
  • Author: Lindsay Oldenski
  • Publication Date: 09-2015
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: Reshoring—when firms shift manufacturing production back to the United States—has been getting a great deal of publicity lately. Oldenski examines the most recent data on the global operations of US firms and concludes that although some companies have reversed their previous offshoring decisions, there is no evidence of a widespread reshoring trend. But this should not be considered a defeat for US competitiveness. US multinationals continue to move operations offshore, but they also continue to grow stronger, producing more in their US operations and adding more to total US exports. The structure of US manufacturing has changed, but the ability to adapt to the changing nature of global business has been and will continue to be crucial to the continued growth of US manufacturing.
  • Topic: Economics, International Trade and Finance
  • Political Geography: United States
  • Author: Monica de Bolle
  • Publication Date: 09-2015
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: Public lending by the Brazilian Development Bank (BNDES) may have done more harm than good in Brazil, adversely affecting real interest rates and productivity growth. Specifically, BNDES's large amounts of subsidized lending are responsible for substantial credit market segmentation, choking off monetary policy transmission. As a result, to maintain price stability the Central Bank of Brazil is forced to raise interest rates more than it might do otherwise in the absence of BNDES lending. Restoring Brazil's capacity to grow in the medium term requires a thorough rethinking of the role of BNDES. In particular, the bank's lending rates should be aligned with market prices, term and risk premia, while taking into account that, with an adequate transparency framework, public development banks can increase private sector participation instead of crowding it out.
  • Topic: Development, Economics, International Trade and Finance, Markets
  • Political Geography: Brazil, Latin America
  • Author: David Manley
  • Publication Date: 10-2015
  • Content Type: Policy Brief
  • Institution: Natural Resource Governance Institute
  • Abstract: There has rarely been as large a commodity boom, with such resounding effects, as the one that has recently ended. Policy makers and commentators saw the boom as an opportunity to pull hundreds of millions of people out of poverty. But, after the crash of commodity prices, one might ask whether this opportunity been largely missed. Policymakers and citizens of resource-rich countries should draw lessons from the experience and ascertain what risks and opportunities they now face in a period of depressed prices. To contribute to this thinking, NRGI gathered more than 180 experts for two days of discussion at St. Catherine’s College, Oxford, in June 2015. Key questions addressed in this conference summary paper include: Were countries prepared for the bust? Was a lack of accountability and transparency really to blame for countries’ poor resource governance efforts? How can transparency be more useful? Has the price slump closed the door on new investment? Is there a “race to the bottom” to stem capital flight? Can we turn the crisis into an opportunity?
  • Topic: Development, International Trade and Finance, Oil, Poverty, Natural Resources, Financial Crisis
  • Political Geography: Global Focus
  • Publication Date: 10-2015
  • Content Type: Policy Brief
  • Institution: Natural Resource Governance Institute
  • Abstract: Commodity trading and the activities of trading companies influence economic and governance outcomes in developing countries. Typically privately owned with flexible business models, many trading companies work extensively in “high-risk” environments – including countries with weak institutions, conflicts or other challenges that scare away more risk-averse companies. Given the size of this footprint, and its prevalence in countries with high levels of corruption or poverty (or both), the quality of trading companies’ business practices is of serious concern. Trading companies play several roles through which they influence public institutions and public revenues, and they frequently build close relationships with top officials and political elites. They are major buyers of raw materials sold by governments and state-owned companies worldwide, and these transactions generate significant public revenues. Traders also provide large loans to governments, sell refined products, and enter into joint ventures with state-owned entities. They are expanding their upstream and downstream operations in developing countries as well.
  • Topic: Economics, International Trade and Finance, Natural Resources, Governance
  • Political Geography: Global Focus
  • Author: Aaron Sayne, Erica Westenberg, Amir Shafaie
  • Publication Date: 08-2015
  • Content Type: Policy Brief
  • Institution: Natural Resource Governance Institute
  • Abstract: Global interest in ownership transparency is growing, with the G8 adopting principles on beneficial ownership; a dozen EITI countries participating in a beneficial ownership pilot; and the US, UK and EU taking steps toward making more beneficial ownership information available. The aim of such initiatives is to shed light on secret ownership structures that enable some extractive companies to evade tax payments or hide improper relationships with government officials. While a complex and opaque ownership structure is no sure sign that an extractives company is engaging in financial misconduct, the publication of beneficial ownership information can help to deter improper practices and enable detection. This briefing explores options open to countries for collecting, publishing and using information on the beneficial owners of oil, gas and mining companies. It provides background on how beneficial ownership works in the extractive industries and why it matters. The briefing also offers governments, companies and civil society members a framework for deciding what information to publish, and considers the critical question of what more disclosure could realistically achieve.
  • Topic: Industrial Policy, International Cooperation, International Trade and Finance, Oil, Natural Resources
  • Political Geography: Global Focus
  • Author: Domenico Lombardi , Kelsey Shantz
  • Publication Date: 11-2015
  • Content Type: Policy Brief
  • Institution: Centre for International Governance Innovation
  • Abstract: The annual CIGI Survey of Progress in International Economic Governance assesses progress in five areas of international economic governance: macroeconomic and financial cooperation; cooperation on financial regulation; cooperation on development; cooperation on trade; and cooperation on climate change. In this year’s survey, 31 CIGI experts conclude that international economic arrangements continue to show a level of “status quo,” averaging a score of 50% across all five areas. The 2015 survey indicates a slight improvement to the result of last year’s survey, which suggested a minimal regression overall. The experts’ assessment of progress was most promising in the area of climate change cooperation, with an average score of 57%, whereas the least promising area was macroeconomic and financial cooperation, with a score of 44%, indicating minimal regression. The remaining three areas polled all fell within the “status quo” range, with trade at 46%, development at 48% and international cooperation on financial regulation at 53%. Interestingly, in the area of cooperation on development, CIGI’s experts provided a relatively mixed assessment. Responses varied based on experts’ perception of the effectiveness of current rhetoric, from 70% (indicating some progress) to 10% (suggesting major regression). Compared to last year, climate change governance has made the greatest improvement, but the remaining three areas (with the exception of development, which was not included in the 2014 survey) have all, on average, regressed further or remained stagnant. This trend is cause for concern.
  • Topic: Climate Change, Development, Economics, International Cooperation, International Trade and Finance
  • Political Geography: Global Focus
  • Author: Jeffrey Schott, Eujiin Jung, Cathleen Cimino-Isaacs
  • Publication Date: 12-2015
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: Of all the free trade agreements (FTAs) concluded by Korea with its major trading partners since the turn of the century, the Korea-China FTA may be the largest in trade terms. It is, however, far from the best in terms of the depth of liberalization and the scope of obligations on trade and investment policies. Korea and China agreed to liberalize a large share of bilateral trade within 20 years, but both sides incorporated extensive exceptions to basic tariff reforms and deferred important market access negotiations on services and investment for several years. Political interests trumped economic objectives, and the negotiated outcome cut too many corners to achieve such a comprehensive result. The limited outcome in the Korea-China talks has two clear implications for economic integration among the northeast Asian countries. First, prospects for the ongoing China-Japan-Korea talks will be limited and unlikely to exceed the Korea-China outcome. Second, Korea and Japan need to strengthen their bilateral leg of the northeast Asian trilateral and the best way is by negotiating a deal in the context of the Trans-Pacific Partnership.
  • Topic: Economics, International Trade and Finance, Politics, Bilateral Relations
  • Political Geography: United States, China, Asia, Korea
  • Author: Tomas Hellebrandt, Paolo Mauro
  • Publication Date: 12-2015
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: In the next two decades, hundreds of millions of people in emerging economies are projected to reach income levels at which they will be able to afford cars and air travel. As purchasing power increases worldwide, people will spend proportionately less on food and beverages and more on transportation. Higher spending on transportation, especially in China, India, and Sub-Saharan Africa, will increase pressures on the infrastructure in these economies and aggravate global climate change. Governments will need to respond to these challenges in a fiscally sustainable and environmentally responsible way.
  • Topic: Emerging Markets, International Trade and Finance, Politics, Economies
  • Political Geography: Global Focus
  • Author: William R. Cline
  • Publication Date: 11-2015
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: The latest semiannual fundamental equilibrium exchange rate (FEER) estimates find that the US dollar is now overvalued by about 10 percent, comparable to levels in 2008 through early 2010 and again in 2011. Unlike then, the current strong dollar does not reflect a weak renminbi kept undervalued by major exchange rate intervention by China. Instead, China's current account surplus has fallen sharply relative to GDP, and its recent intervention has been to prevent excessive depreciation rather than to prevent appreciation. Additionally, declines in the real effective exchange rates (REERs) for major emerging-market economies and resource-based advanced economies, driven by falling commodity prices in recent months, have strengthened the dollar. Recent increases in the REERs for the euro area and Japan have removed their modest undervaluation identified in the last FEERs estimates in May, and the Chinese renminbi remains consistent with its FEER. The dollar's rise by nearly 15 percent in real effective terms over the past two years could impose a drag of nearly one-half percent annually on US demand growth over the next five years. As the Federal Reserve moves to normalize US monetary policy, it may need to consider a gentler rise in interest rates than it might otherwise have pursued, both to temper possible further strengthening of the dollar in response to higher interest rates and to help offset the demand compression from falling net export
  • Topic: Economics, International Trade and Finance, Monetary Policy, GDP
  • Political Geography: United States, China
  • Author: Angel Ubide
  • Publication Date: 12-2015
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: The rules and buffers created in the last few years to enable the euro area to withstand another sudden stop of credit and market-driven panic in one or more of its member states are welcome steps, but they are widely recognized as inadequate. Ubide proposes creating a system of stability bonds in the euro area, to be issued by a new European Debt Agency, to partially finance the debt of euro area countries—up to 25 percent of GDP. These stability bonds should be initially backed by tax revenues transferred from national treasuries, but ultimately by the creation of euro area–wide tax revenues, and used to fund the operations of national governments. They could also be used for euro area–wide fiscal stimulus, to complement the fiscal policies of member states. Such bonds would strengthen the euro area economic infrastructure, creating incentives for countries to reduce their deficits but not forcing them to do so when such actions would drive their economies further into a downturn. The bonds would permit the euro area to adopt a more flexible or expansionary fiscal policy during recessions.
  • Topic: Economics, International Trade and Finance, Monetary Policy, GDP
  • Political Geography: Europe
  • Author: Alan Riley
  • Publication Date: 11-2015
  • Content Type: Policy Brief
  • Institution: Atlantic Council
  • Abstract: Germany may be seeking to expedite the construction of Russia's Nordstream 2 pipeline by shielding the controversial project from tough the laws of the European Union (EU), according to a transcript of talks between Russian President Vladimir Putin and German Energy Minster Sigmar Gabriel, Atlantic Council Senior Fellow Alan Riley writes in "Nordstream 2: Too Many Obstacles, Legal, Economic, and Political to Be Delivered?".
  • Topic: Energy Policy, International Law, International Trade and Finance, Natural Resources, European Union
  • Political Geography: Russia, Europe
  • Author: Susan Schadler
  • Publication Date: 11-2015
  • Content Type: Policy Brief
  • Institution: Centre for International Governance Innovation
  • Abstract: This policy brief examines a number of poses key challenges in the evolution of a coherent role for the IMF in future crises.
  • Topic: Economics, International Trade and Finance, International Monetary Fund
  • Political Geography: Ukraine
  • Author: Céline Bak
  • Publication Date: 10-2015
  • Content Type: Policy Brief
  • Institution: Centre for International Governance Innovation
  • Abstract: Reporting on global trade in environmental goods would provide a comprehensive lens into diversification that will be needed for the transition to low-carbon economies, help countries benchmark the shorter- and longer-term impact of policies such as regulation and fiscal stimulus targeted at green growth, as well as innovation, and strengthen the G20 leaders’ commitment to inclusive and sustainable growth by providing visibility into the pace of investments to address climate change.
  • Topic: Climate Change, Economics, International Trade and Finance, G20
  • Political Geography: Global Focus
  • Author: Penelope Hawkins, Olaf Weber
  • Publication Date: 09-2015
  • Content Type: Policy Brief
  • Institution: Centre for International Governance Innovation
  • Abstract: One of the most important and topical discussions within the global multilateral arena is the challenge of meeting the world’s climate finance needs in order to reduce carbon emissions to sustainable levels and support adaptation strategies. The mobilization of finance is key in supporting the transition away from traditional high-carbon or business-as-usual economic pathways toward low-carbon, climate-resilient economic systems. A conference, Global Sustainability, Climate Change and Finance Policy, organized by the Centre for International Governance Innovation and the South African Institute for International Affairs and held in Johannesburg from July 1 to July 3, considered aspects of the debate.
  • Topic: Climate Change, Economics, Environment, International Trade and Finance
  • Political Geography: Global Focus
  • Author: Marko Lovec
  • Publication Date: 11-2015
  • Content Type: Policy Brief
  • Institution: IEMed/EuroMeSCo
  • Abstract: The recent food security crisis has shed light on the importance of agricultural development in the South Mediterranean countries. An ‘urban bias’ and ‘trade liberalisation’ policies have resulted in growing dependence on imports, narrow specialisations and unsustainable production practices. The Euro-Mediterranean integration process has put trade liberalisation in the centre of attention, while the progress in agriculture has been limited. The purpose of this paper is to analyse the challenges faced by agro-food systems in Southern and Eastern Mediterranean Countries, with specific attention to the role of the Euro-Mediterranean integration and the reform of the Common Agricultural Policy. The paper also reviews relevant economic and environmental data in selected South and East Mediterranean countries.
  • Topic: Security, Agriculture, Development, Economics, International Trade and Finance, Food
  • Political Geography: Europe
  • Author: Jeffrey Schott, Euijin Jung, Cathleen Cimino-Isaacs
  • Publication Date: 12-2015
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: Of all the free trade agreements (FTAs) concluded by Korea with its major trading partners since the turn of the century, the Korea-China FTA may be the largest in trade terms. It is, however, far from the best in terms of the depth of liberalization and the scope of obligations on trade and investment policies. Korea and China agreed to liberalize a large share of bilateral trade within 20 years, but both sides incorporated extensive exceptions to basic tariff reforms and deferred important market access negotiations on services and investment for several years. Political interests trumped economic objectives, and the negotiated outcome cut too many corners to achieve such a comprehensive result. The limited outcome in the Korea-China talks has two clear implications for economic integration among the northeast Asian countries. First, prospects for the ongoing China-Japan-Korea talks will be limited and unlikely to exceed the Korea-China outcome. Second, Korea and Japan need to strengthen their bilateral leg of the northeast Asian trilateral and the best way is by negotiating a deal in the context of the Trans-Pacific Partnership.
  • Topic: Economics, International Trade and Finance, Markets, Treaties and Agreements, Bilateral Relations
  • Political Geography: Korea
  • Publication Date: 01-2015
  • Content Type: Policy Brief
  • Institution: Aspen Institute
  • Abstract: In New York City on October 16-17, 2014, the Aspen Institute Business & Society Program hosted a Symposium focused on exemplary teaching at the business and society interface with a particular emphasis on sourcing and employment practices-leveraging increased consumer demand for "responsible" labor practices and supply chains, and employer demand for graduates with strong operational skills. This meeting brought together an impressive roster of corporate, academic and non-profit leaders, and identified ways for business schools to effectively prepare future leaders for the challenges of our complex economy, and to lead companies in ways that help build a vibrant economy for all.
  • Topic: Economics, Education, International Trade and Finance, Politics, Labor Issues
  • Political Geography: Global Focus
  • Author: Peter Harrell
  • Publication Date: 09-2015
  • Content Type: Policy Brief
  • Institution: Center for a New American Security
  • Abstract: U.S. and European sanctions on Russia mark a significant evolution in the sanctions toolkit. Officials deployed novel types of financial and energy sanctions to create a regime that imposed significant costs on Russia while minimizing collateral impacts on the U.S. and European economies. The U.S. and European decision to create these new tools was driven by the need to take an innovative approach to sanctions against an economy twice the size of the combined gross domestic products (GDPs) of all other countries subject to significant U.S. economic sanctions and on Russian companies that play an important role in global markets. These developments, while tailored to Russia’s unique circumstances, hold important lessons for the future of sanctions policy.
  • Topic: Foreign Policy, Cold War, Economics, International Trade and Finance, Sanctions
  • Political Geography: Russia
  • Author: Elizabeth Rosenberg, Zachary K. Goldman
  • Publication Date: 06-2015
  • Content Type: Policy Brief
  • Institution: Center for a New American Security
  • Abstract: The United States has long relied on its economic power to protect and advance its interests abroad. In an increasingly integrated international financial system, the U.S. economy and capital markets remain the largest in the world by almost every measure. This status affords the United States an important global leadership position and the ability to shape foreign policy outcomes with economic tools. The structure of the international trade and financial system, in which many significant banking and energy transactions as well as currency reserves are denominated in U.S. dollars, reinforces the central role of the United States.
  • Topic: Foreign Policy, Economics, Globalization, International Trade and Finance, Markets, Power Politics
  • Political Geography: United States
  • Author: Domenico Lombardi , Kelsey Shanty
  • Publication Date: 11-2015
  • Content Type: Policy Brief
  • Institution: Centre for International Governance Innovation
  • Abstract: The annual CIGI Survey of Progress in International Economic Governance assesses progress in five areas of international economic governance: macroeconomic and financial cooperation; cooperation on financial regulation; cooperation on development; cooperation on trade; and cooperation on climate change. In this year’s survey, 31 CIGI experts conclude that international economic arrangements continue to show a level of “status quo,” averaging a score of 50% across all five areas. The 2015 survey indicates a slight improvement to the result of last year’s survey, which suggested a minimal regression overall. The experts’ assessment of progress was most promising in the area of climate change cooperation, with an average score of 57%, whereas the least promising area was macroeconomic and financial cooperation, with a score of 44%, indicating minimal regression. The remaining three areas polled all fell within the “status quo” range, with trade at 46%, development at 48% and international cooperation on financial regulation at 53%. Interestingly, in the area of cooperation on development, CIGI’s experts provided a relatively mixed assessment. Responses varied based on experts’ perception of the effectiveness of current rhetoric, from 70% (indicating some progress) to 10% (suggesting major regression). Compared to last year, climate change governance has made the greatest improvement, but the remaining three areas (with the exception of development, which was not included in the 2014 survey) have all, on average, regressed further or remained stagnant. This trend is cause for concern.
  • Topic: Climate Change, Development, International Political Economy, International Trade and Finance, Financial Crisis
  • Political Geography: Global Focus
  • Author: Patryk Kuglel
  • Publication Date: 10-2015
  • Content Type: Policy Brief
  • Institution: The Polish Institute of International Affairs
  • Abstract: The EU-India Strategic Partnership launched in 2004 has made only modest achievements and needs a thorough rethink. Both sides must reset cooperation and base it on a more realistic footing centred on common interests, such as economic cooperation, global governance, development cooperation, and defence. The resumption of free trade negotiations, the organisation of a long overdue bilateral summit, and more frank dialogue on contentious issues is necessary in order to utilise the partnership’s potential. Poland may use this strategic drift to revitalise bilateral cooperation and play a more active role in reviving EU-India dialogue.
  • Topic: Economics, International Trade and Finance, Politics, Bilateral Relations, Governance
  • Political Geography: Europe, India
  • Author: Marcus Noland
  • Publication Date: 11-2015
  • Content Type: Policy Brief
  • Institution: East-West Center
  • Abstract: Unconventional monetary policy (UMP) has had predictable effects. How exit plays out is scenario-dependent. Quantitative easing has had the predictable effect of encouraging currency depreciation and some partner countries may have attempted to offset these exchange rate effects. Korea presents a particularly interesting case: it is relatively small and relatively open and integrated, in both trade and financial terms, with the United States and Japan, two practitioners of UMP. Authorities have acted to limit the won's appreciation primarily against the currency of China, not the US or Japan. Nevertheless, Korea's policy is a source of tension with the US. Under legislation currently being considered, the currency manipulation issue could potentially interfere with Korean efforts to attract direct investment from the US and create an obstacle to Korea joining the Trans-Pacific Partnership.
  • Topic: Economics, International Trade and Finance, Political Economy, Monetary Policy, Foreign Direct Investment
  • Political Geography: Asia
  • Author: Jon Dorsch
  • Publication Date: 09-2015
  • Content Type: Policy Brief
  • Institution: East-West Center
  • Abstract: At the end of 2015 the Association of Southeast Asian Nations (ASEAN) will announce the establishment of the ASEAN Economic Community (AEC). In theory, this agreement should produce an association-wide economic integration. However, following the announcement, and for the foreseeable future, ASEAN member states will continue in significantly less than full regional economic integration. Why? Some observers believe that the AEC plans involve an "overly ambitious timeline and too many ill-thought-out initiatives." Others point to ASEAN's traditional aversion to legally binding agreements. While progress has been made in reducing or eliminating intra-ASEAN trade tariffs, substantial non-tariff barriers to trade persist. However, for most member states, the ASEAN market is relatively small while external markets, especially China, are growing rapidly. Given this outward-orientation for ASEAN trade, is the lack of an unhindered regional market really a problem?
  • Topic: Economics, International Trade and Finance, Markets
  • Political Geography: China, Asia
  • Author: Sean P. Connell
  • Publication Date: 01-2014
  • Content Type: Policy Brief
  • Institution: East-West Center
  • Abstract: The Korean government's "creative economy" agenda reflects growing consensus that Korea's future growth and prosperity depends on its ability to become a global leader in developing and commercializing innovative new products, services, and business models. To succeed, the Korean government must address regulatory, structural, educational, and cultural obstacles that have constrained Korea's ability to fully utilize its innovative capacities. This new emphasis on innovation brings Korea into closer alignment with the United States, which has long focused on innovation in its growth strategies. Moreover, it comes during the early stages of implementation of the US-Korea Free Trade Agreement (KORUS), which intersects with important areas of Korea's innovation framework policies. Policymakers, businesses, and researchers in both countries should examine potential new opportunities to increase cooperation around initiatives aimed at fostering innovation and growth, both within the bilateral context and at a global level.
  • Topic: Economics, Industrial Policy, International Trade and Finance, Treaties and Agreements, Bilateral Relations
  • Political Geography: United States
  • Author: Bart Gaens
  • Publication Date: 02-2014
  • Content Type: Policy Brief
  • Institution: Finnish Institute of International Affairs
  • Abstract: China is challenging the regional balance of power in East Asia through a military buildup and an increasingly assertive foreign policy. The US is forced to find the right balance between cooperating with China while benefiting from its economic rise, and countering China's regional reach by carrying out its self-declared "pivot" to Asia in spite of domestic and budgetary constraints. With just over one year in office, Japan's Prime Minister Shinzo Abe has received wide domestic support for his ambitious plans to revive Japan's economy through his threefold policy of Abenomics. At the same time, however, he has implemented a number of significant policies in the defence and security sphere. In response to China's military rise, the Abe administration increased and recalibrated the defence budget. Furthermore, in order to reinforce the alliance with the US, the government approved the creation of a US-style National Security Council, passed a Secrecy Bill, and aims to reverse Japan's self-imposed ban on exercising the right to collective self-defence. Under the banner of "proactive pacifism", the Abe cabinet is seizing the momentum caused by the changing regional power dynamics in order to edge closer towards "breaking away from the postwar regime". A proposed revision of Japan's constitution, unchanged since 1947, symbolizes the ruling Liberal Democratic Party's (LDP) objective to bring about a more autonomous role for Japan both in the security alliance with the US and as an international actor.
  • Topic: Security, Foreign Policy, Defense Policy, Arms Control and Proliferation, Economics, International Trade and Finance
  • Political Geography: Japan, China, Asia
  • Author: Nicu Popescu
  • Publication Date: 01-2014
  • Content Type: Policy Brief
  • Institution: European Union Institute for Security Studies
  • Abstract: For the best part of the last two decades, EU-Russia summits have alternated between being upbeat events where new grand integration initiatives were launched – the creation of four common spaces in 2005, the partnership for modernisation in 2010 – and rather unfriendly encounters where success was seemingly measured on how impolite the partners could be to one another.
  • Topic: Economics, Energy Policy, International Trade and Finance, Bilateral Relations
  • Political Geography: Russia, Europe, Asia
  • Author: Dieter Ernst
  • Publication Date: 02-2014
  • Content Type: Policy Brief
  • Institution: East-West Center
  • Abstract: India faces a fundamental puzzle. The country is a leading exporter of information-technology services, including knowledge-intensive chip design. Yet electronics manufacturing in India is struggling despite a huge and growing domestic market and pockets of world-class capabilities. To examine this puzzle the World Bank commissioned this study in May 2013 on behalf of the Chief Economic Advisor, Government of India, Raghuram Rajan (now the governor of the Reserve Bank of India). Drawing on extensive survey questionnaires and interviews with key industry players (both domestic and foreign) and relevant government agencies, this study identifies major challenges India-based companies face in engaging in electronics manufacturing. The analysis culminates in detailed policy suggestions for regulatory reform and support policies needed to unblock barriers to investment in this industry and to fast-track its upgrading through innovation.
  • Topic: Development, Economics, Globalization, Industrial Policy, International Trade and Finance, Science and Technology
  • Political Geography: South Asia, India
  • Author: Derek M. Scissors
  • Publication Date: 01-2014
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: New data published in the American Enterprise Institute-Heritage Foundation China Global Investment Tracker show that China continues to invest heavily around the world. Outward investment excluding bonds stood at $85 billion in 2013 and is likely to reach $100 billion annually by 2015. Energy, metals, and real estate are the prime targets. The United States in particular received a record of more than $14 billion in Chinese investment in 2013. Although China has shown a pattern of focusing on one region for a time then moving on to the next, the United States could prove to be a viable long-term investment location. The economic benefits of this investment flow are notable, but US policymakers (and those in other countries) should consider national security, the treatment of state-owned enterprises, and reciprocity when deciding to encourage or limit future Chinese investment.
  • Topic: Security, Foreign Policy, Development, Economics, Emerging Markets, International Trade and Finance, Foreign Direct Investment, Sovereign Wealth Funds
  • Political Geography: United States, China, Asia
  • Author: Caroline Freund
  • Publication Date: 02-2014
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: As the United States struggled with unemployment and other effects of the Great Recession in January 2010, President Barack Obama set the goal of doubling exports within five years and creating 2 million new export-related jobs. Four years later, however, exports are less than halfway toward that goal and the rate of export growth is slowing. More worrisome, the administration's strategy failed to boost average export growth from historical levels, despite the robust recovery in international trade after the collapse of 2009. The National Export Initiative (NEI) has come up short.
  • Topic: Economics, Industrial Policy, International Trade and Finance, Markets, Maritime Commerce
  • Political Geography: United States
  • Author: Gary Clyde Hufbauer, Jeffrey J. Schott, Cathleen Cimino
  • Publication Date: 02-2014
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: Proponents of liberalized trade and finance were relieved when the global economic crisis in 2008 produced a broad range of pledges from countries around the world to avoid new barriers to trade and investment (see Evenett 2013). These promises, designed to avert a replay of the Great Depression of the 1930s, were largely honored when it came to classic forms of protection (tariffs and quotas). But the spirit of that pledge was violated as countries shifted from traditional forms of protection to behind-the-border nontariff barriers (NTBs), including local content requirements (LCRs)—policies mandating that local suppliers of goods, services, and even entire projects be favored by governments and private firms, even when foreign firms offer lower costs, better quality, and faster delivery.
  • Topic: Debt, Economics, International Trade and Finance, Markets, Financial Crisis, Reform
  • Author: Ángel Ubide
  • Publication Date: 02-2014
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: Inflation in the euro area is too low, just 0.9 percent year-on-year in December 2013, and inflation expectations, measured from inflation derivative contracts, have shifted lower, indicating that markets expect some small probability of deflation in 2014 and average inflation over the next five years in the 1.25 to 1.5 percent range. The European Central Bank (ECB), however, seems to be content with this outlook. Its current projections show a very slow economic recovery and inflation at just 1.3 percent in two years' time. Yet the ECB describes the risks to inflation as balanced. This puzzling assessment might be due to the fact that the ECB's definition of price stability is less precise than that employed by other central banks, and some ECB members may interpret the definition as setting a ceiling, rather than a target, for inflation at close to but below 2 percent. But if one considers the ECB's self-assessment of success since its creation—achieving 2 percent inflation on average—its current inflation forecast of 1.3 percent would fall short of achieving its price stability mandate.
  • Topic: Economics, International Trade and Finance, Markets, Monetary Policy
  • Political Geography: Europe
  • Author: Joseph E. Gagnon, Brian Sack
  • Publication Date: 01-2014
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: The dramatic increase in the Federal Reserve's balance sheet since 2009 has attracted the attention of economists, pundits, and ordinary citizens. The amount of assets held by the Fed recently crossed $4 trillion and will likely continue to rise to a peak of about $4.5 trillion. This run-up in asset holdings has resulted from the Fed's large-scale asset purchase programs, which were intended to support economic growth. However, a side-effect of these asset purchases is the creation of unprecedented amounts of liquidity in the financial system.
  • Topic: Economics, International Trade and Finance, Markets, Monetary Policy
  • Political Geography: United States
  • Author: Tomas Hellebrandt
  • Publication Date: 01-2014
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: The Great Recession, which cost tens of millions of jobs, a collapse of asset values around the world, and threatened the global financial system, has generated renewed concern over the long-standing issue of the fairness of the distribution of wealth and income in many societies. Economic inequality has increased in the United States and many other advanced economies over the past 20 to 30 years. This trend generated less worry in the boom years, when unemployment rates were low and cheap credit enabled consumers to borrow and maintain higher standards of living, masking the impact of growing income disparity on consumption patterns and perceptions of well-being.
  • Topic: Debt, Economics, International Trade and Finance, Poverty, Social Stratification, Financial Crisis
  • Political Geography: United States, United Kingdom, Germany, Spain, Italy, Ireland
  • Author: C. Fred Bergsten
  • Publication Date: 01-2014
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: A bipartisan majority in both Houses of Congress is insisting that the United States include a provision in future trade agreements that would bar currency manipulation. A letter from 60 senators to Secretary of the Treasury Jacob Lew and United States Trade Representative (USTR) Michael From an on September 23, 2013, called for "strong and enforceable foreign currency manipulation disciplines" in the Trans-Pacific Partnership (TPP) while 230 members of the House of Representatives told President Barack Obama on June 6, 2013, that "it is imperative that (the TPP) address currency manipulation.to create a level playing field for American businesses and prevent more US jobs from being shipped overseas." The trade promotion authority (TPA) legislation proposed by congressional trade leaders on January 9, 2014, establishes the avoidance of currency manipulation as a "principal US negotiating objective" in its future trade agreements.
  • Topic: Economics, Emerging Markets, International Trade and Finance, Monetary Policy
  • Political Geography: United States
  • Author: Jacob Funk Kirkegaard
  • Publication Date: 01-2014
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: Mark Twain once wrote an essay about the difficulties of learning what he called "The Awful German Language." Similar barriers to comprehension seem to plague those trying to explain recent German economic performance. By most measures, Germany has the best functioning labor market among large economies in the West, with levels of employment reaching those in the United States at the end of the turbo-charged 1990s. A debate has stirred, however, about whether this success has come with a price—specifically, whether Germany's domestic structural reforms have lowered living standards for Germany's low income workers and worsened income inequality and whether Germany is fortuitously and perhaps selfishly riding a wave of strong foreign demand for German exports.
  • Topic: Economics, Industrial Policy, International Trade and Finance, Markets, Labor Issues
  • Political Geography: United States, Europe, Germany
  • Author: Peter A. Petri, Michael G. Plummer
  • Publication Date: 03-2014
  • Content Type: Policy Brief
  • Institution: East-West Center
  • Abstract: ASEAN has become a focal point of the rapidly changing economic architecture of the Asia-Pacific region. ASEAN members are increasingly stable and politically confident, and constitute an emerging economic powerhouse. The region is dynamic, with 600 million citizens and a gross domestic product (GDP) that exceeds $2 trillion and is expected to grow 6 percent annually for the next two decades. (The Appendix at the end of this paper reports detailed output and trade projections to 2025.) Through deeper internal integration via the ASEAN Economic Community (AEC) and external initiatives such as the Regional Comprehensive Economic Partnership (RCEP), ASEAN is becoming a driving force in regional cooperation and a much-courted economic partner. The AEC and the RCEP projects are globally significant: the AEC could generate powerful demonstration effects for other developing regions, and the RCEP could become an important building bloc of the multilateral trading system.
  • Topic: Security, Economics, International Trade and Finance, Markets
  • Political Geography: United States, East Asia, Asia, Asia-Pacific
  • Author: Jeong Yeon Lee
  • Publication Date: 03-2014
  • Content Type: Policy Brief
  • Institution: East-West Center
  • Abstract: Multi-factor productivity (MFP) compares the growth of gross domestic product with the growth of combined capital and labor inputs. The growth rate of MFP assumes theoretical significance because it represents the slope of the steady-state growth path, and hence is a major determinant of the long-term growth trend. This paper offers the balanced panel of the estimated growth rates of MFP for 24 OECD countries over 1986-2011. Based on the estimates of MFP growth, a number of notable trends in productivity growth are identified for the entire OECD area as well as three major economies – the United States, the Eurozone and Japan – within the OECD.
  • Topic: Economics, Industrial Policy, International Trade and Finance, Labor Issues
  • Political Geography: United States, Japan, Europe
  • Author: Luke Simon Jordan, Katerina Koinis
  • Publication Date: 04-2014
  • Content Type: Policy Brief
  • Institution: East-West Center
  • Abstract: Despite the region's economic growth over the last few decades, countries across Asia still face the complex challenge of structural transformation. Low-income economies must build formal industrial and service sectors from agricultural and informal bases; middle-income economies must move up the value chain; and high-income economies must continually generate new capabilities at the frontier of innovation.
  • Topic: Development, Economics, Industrial Policy, International Trade and Finance
  • Political Geography: Asia
  • Author: Peter Nunnenkamp, Wan-Hsin Liu, Frank Bickenbach
  • Publication Date: 03-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: P. Chidambaram, India's Minister of Finance, claimed that "FDI worked wonders in China and can do so in India." However, China's example may also point to the limitations of foreign direct investment (FDI) liberalization in promoting the host country's economic development. FDI in China is heavily concentrated in the coastal areas, and previous studies have suggested that this has contributed to the increasing disparity in regional income and growth since the late 1970s.
  • Topic: Development, Economics, International Trade and Finance, Foreign Direct Investment
  • Political Geography: China, South Asia, India
  • Author: Rudolf Adlung
  • Publication Date: 03-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: A number of recent studies have discussed the implications of most-favored-nation (MFN) clauses in bilateral investment treaties (BIT s) and the possible need for, and role of, a multilateral framework for investment. Surprisingly, the relevance of existing multilateral disciplines, in particular under the General Agreement on Trade in Services (GATS), is seldom acknowledged in this context.
  • Topic: Economics, International Trade and Finance, Treaties and Agreements, Foreign Direct Investment
  • Author: Gary Hufbauer, Sherry Stephenson
  • Publication Date: 03-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: In Columbia FDI Perspectives, No. 102, Axel Berger claimed that the debate over a multilateral framework for investment is futile. We disagree. Following its achievements at the 9th Ministerial Conference in Bali, Indonesia, the World Trade Organization (WTO) should launch negotiations to draft a 21st century Investment Framework Agreement (IFA).
  • Topic: Economics, International Trade and Finance, Markets, Treaties and Agreements, Foreign Direct Investment
  • Political Geography: Colombia
  • Author: Joachim Karl
  • Publication Date: 02-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: In his famous book, "The End of History and the Last Man", published in 1992, Francis Fukuyama argued that Western democracy represents the end point of the socio-cultural evolution of humanity and the final form of government.
  • Topic: Economics, International Trade and Finance, Markets, Treaties and Agreements, Foreign Direct Investment
  • Political Geography: France
  • Author: Anthea Roberts
  • Publication Date: 01-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: There have been many calls for a rebalancing of investor protection and state sovereignty in the investment treaty system. However, another equally important shift is underway: the recalibration of interpretive authority between treaty parties and arbitral tribunals. In newer-style investment treaties, states are increasingly protecting and enhancing their role in interpreting and applying their treaties.
  • Topic: Economics, Government, International Trade and Finance, Markets, Treaties and Agreements, Foreign Direct Investment
  • Author: Sheng Zhang
  • Publication Date: 01-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The China-US bilateral investment treaty (BIT) negotiations have attracted attention due to the relative size and weight of both economies. Despite broad consensus about the importance of such a treaty, there is considerable debate about its shape and content. The debate is reflected in two recent Columbia FDI Perspectives. Donnelly argued that a China-US BIT should be modeled on the US Model BIT without "splitting the difference between Chinese and US positions", and that the possibility of meaningful BIT negotiations are "really up to China at this point".
  • Topic: Economics, Globalization, International Trade and Finance, Bilateral Relations, Foreign Direct Investment, Governance
  • Political Geography: United States, China, Europe, Colombia
  • Author: Rym Ayadi, Willem Pieter De Groen
  • Publication Date: 01-2014
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: The Arab Spring, which took root in Tunisia and Egypt in the beginning of 2011 and gradually spread to other countries in the southern Mediterranean, highlighted the importance of private-sector development, job creation, improved governance and a more equitable distribution of economic opportunities. The developments led to domestic and international demands on the governments in the region to implement the reforms needed to enhance business and investment conditions, modernise their economies and support the development of enterprises.
  • Topic: Economics, International Trade and Finance, Social Movement, Reform
  • Political Geography: Arabia, Egypt, Tunisia
  • Author: Viral V. Acharya, Sascha Steffen
  • Publication Date: 01-2014
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: The eurozone is mired in a recession. In 2013, the GDP of all 17 eurozone countries fell by 0.5% and the outlook for 2014 shows considerable risks across the region. To stabilise the common currency area and its (partly insolvent) financial system, a eurozone banking union is being established. An important part of the banking union is the Single Supervisory Mechanism (SSM), which will transfer the oversight of Europe's largest banks to the European Central Bank (ECB). Before the ECB takes over this responsibility, it plans to conduct an Asset Quality Review (AQR) in 2014, which will identify the capital shortfalls of these banks.
  • Topic: Economics, International Trade and Finance, Regional Cooperation, Monetary Policy
  • Political Geography: Europe
  • Author: Domenico Lombardi, Pierre Siklos, Samantha St. Amand
  • Publication Date: 03-2014
  • Content Type: Policy Brief
  • Institution: Centre for International Governance Innovation
  • Abstract: Central banks (and policy makers more generally) should seek a global consensus before implementing policies that may have global repercussions. The global economy can only become more resilient to shocks when there is greater central bank cooperation. The G20 is a natural venue to promote cooperation and to help the global economy return to stronger economic growth, but other forums may also be appropriate. The maintenance of financial stability is a common resource and should be treated as such. Excessive reliance on sovereignty is counterproductive and contains the seeds of the next crisis.
  • Topic: Economics, International Cooperation, International Trade and Finance, Markets, Financial Crisis
  • Author: Bessma Momani, Dustyn Lanz
  • Publication Date: 03-2014
  • Content Type: Policy Brief
  • Institution: Centre for International Governance Innovation
  • Abstract: In response to the Arab uprisings in Egypt, Morocco and Tunisia, the IMF has changed its perspective on the social outcomes of its economic policy advice. The Fund now explicitly advocates inclusive growth, reduced inequality and increased attention to, and spending on, health and education services. Although this is a welcome transition, there is still room for improvement. In particular, the Fund could strengthen its commitment to the social dimensions of public policy by delivering more specific, tangible policy advice for countries to achieve inclusive growth, reduce inequality and improve health and education outcomes. More diverse expertise, achieved through wider recruitment of staff, would help the IMF achieve these goals.
  • Topic: Economics, International Trade and Finance, International Monetary Fund
  • Political Geography: Middle East, Arabia, Egypt, Morocco, Tunisia
  • Publication Date: 04-2014
  • Content Type: Policy Brief
  • Institution: Oxfam Publishing
  • Abstract: The Queen 'Mamohato Memorial Hospital, which opened in October 2011, was built to replace Lesotho's old main public hospital, the Queen Elizabeth II (QE II) Hospital, in the capital, Maseru. It is the first of its kind in Africa – and in any low-income country – because all the facilities were designed, built, financed, and operated under a public – private partnership (PPP) that includes delivery of all clinical services. The PPP was developed under the advice of the International Finance Corporation (IFC), the private sector investment arm of the World Bank Group. The promise was that the PPP would provide vastly improved, high-quality healthcare services for the same annual cost as the old public hospital.
  • Topic: Economics, International Cooperation, International Organization, International Trade and Finance, Health Care Policy
  • Political Geography: Africa
  • Author: Mike Callaghan
  • Publication Date: 02-2014
  • Content Type: Policy Brief
  • Institution: Lowy Institute for International Policy
  • Abstract: Restoring global economic growth and creating jobs has been an objective of successive G20 summits. Australia has also made it a priority for the G20 in 2014. To achieve such an outcome requires a comprehensive and agreed growth strategy. The G20 lacks such a strategy and has failed to provide a clear and consistent message about how members can or are working together to achieve such an outcome.
  • Topic: Economics, International Cooperation, International Organization, International Trade and Finance, Markets, Labor Issues
  • Political Geography: Australia
  • Author: Edwin M. Truman
  • Publication Date: 03-2014
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: The vital role played by the International Monetary Fund (IMF) in stabilizing the world economy and financial system is in serious jeopardy. The failure in mid-January by the US Congress to approve IMF reform legislation that had been pending for more than three years did not simply bring to a screeching halt a decade of slow progress reforming the governance of the Fund to make it more representative, legitimate, and therefore effective. Congress's balking on this issue also did substantial, actual damage to the US reputation around the world, as the leaders of many countries called into question Washington's ability to deliver on promises made in international economic agreements.
  • Topic: Economics, International Trade and Finance, International Monetary Fund, Reform
  • Political Geography: United States
  • Author: Hongying Wang
  • Publication Date: 04-2014
  • Content Type: Policy Brief
  • Institution: Centre for International Governance Innovation
  • Abstract: China's role in the global imbalance is closely linked to its domestic imbalance. Chinese policy makers have long been aware of the dual imbalance and the imperative to shift to economic growth driven by domestic consumption. They have taken limited steps in changing the development model, but political obstacles have slowed the pace of reform. The new leadership seems serious about deepening economic reform despite political resistance, but without political reform, the prospect of success remains dim.
  • Topic: Economics, International Trade and Finance, Monetary Policy, Governance
  • Political Geography: China, Asia
  • Author: Nicu Popescu, Iana Dreyer
  • Publication Date: 03-2014
  • Content Type: Policy Brief
  • Institution: European Union Institute for Security Studies
  • Abstract: Long ignored by the West, the Eurasian Customs Union (consisting of Russia, Belarus and Kazakhstan) has recently been brought into the international limelight. The project – an attempt by the Kremlin to create a rival to the European Union and its Eastern Partnership project – attracted attention when Moscow, with its characteristic bluntness, began to pressure Armenia, Georgia, Moldova and Ukraine to join the grouping and drop their plans to sign Association Agreements with the EU. Although Russia has not succeeded in convincing all these states to join, it managed to do so with Armenia in September 2013, and the political tussle over the issue with Ukraine played a central role in triggering the country's current crisis.
  • Topic: Economics, International Political Economy, International Trade and Finance, Power Politics
  • Political Geography: Europe, Eurasia, Asia
  • Author: Gerald Stang
  • Publication Date: 03-2014
  • Content Type: Policy Brief
  • Institution: European Union Institute for Security Studies
  • Abstract: In 2012, China was the world's seventh biggest producer of natural gas, the fourth largest oil producer, and the biggest producer of hydroelectricity. It also produced almost as much coal as the rest of the world combined. Still, this is not enough. China's domestic energy bounty has long allowed the country to keep its overall import dependency relatively low but, as the country's economy continues to boom, its import dependency is growing quickly, particularly with regard to oil.
  • Topic: Economics, Energy Policy, International Cooperation, International Trade and Finance, Markets, Natural Resources
  • Political Geography: China, Asia
  • Author: Bradley Anderson, Johan Jooste
  • Publication Date: 05-2014
  • Content Type: Policy Brief
  • Institution: Africa Center for Strategic Studies
  • Abstract: Spikes in the prices of ivory and rhino horn have propelled an escalation in killings of African elephants and rhinoceroses. Without urgent corrective measures, extinction of these populations is likely. This is not just a wildlife poaching problem but part of a global illicit trafficking network that is empowering violent groups and co-opting some elements of Africa's security sector. An immediate bolstering of Africa's wildlife ranger network is needed to slow the pace of elephant and rhino killings and buy time. Addressing this threat over the longer term will require dramatically reducing the demand for these animal parts, especially within Asian markets.
  • Topic: Security, International Trade and Finance, Regional Cooperation, Law Enforcement
  • Political Geography: Africa, Asia
  • Author: Rainer Geiger
  • Publication Date: 04-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Launched in July 2013 by the European Union and the United States, the Transatlantic Trade and Investment Partnership (TTIP) represents an important effort to reach a comprehensive economic agreement between two major trading partners. As has been pointed out, the project offers great opportunities for liberalizing trade and investment and regulatory convergence. Its level of ambition implies high risks, but despite negotiators' initial optimism, its success is far from certain. This Perspective focuses on the project's investment chapter, drawing lessons from the failed negotiations on a Multilateral Agreement on Investment (MAI), which was meant to consolidate the results of liberalization in the OECD area, establish new disciplines and introduce protection and dispute settlement.
  • Topic: Economics, International Trade and Finance, Treaties and Agreements
  • Political Geography: Europe, North America
  • Author: Nathan M. Jensen, Jeremy Caddel
  • Publication Date: 03-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Foreign direct investors increasingly use investment dispute-settlement mechanisms to resolve investment disputes and reduce political risk. Using data from the International Centre for Settlement of Investment Disputes (ICSID), the major forum of international investment arbitration, we cataloged the government actors involved in disputes and the actions that led to arbitration. Existing case-based studies of investment arbitration have provided general inferences about the actors involved, but we contribute to the literature in political science and economics by systematically documenting these patterns of behavior.
  • Topic: Economics, International Trade and Finance, Foreign Direct Investment, Governance
  • Author: Karl P. Sauvant, Victor Z. Chen
  • Publication Date: 05-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: China's rising outward foreign direct investment (OFDI) faces rising skepticism abroad. This is partly the result of the leading role of state-owned enterprises in her OFDI (and the fear that it serves non-commercial purposes), the speed with which this investment has grown, the negative image of the home country in some quarters, and the challenges it poses to established competitors. Moreover, Chinese multinational enterprises (MNEs) may not always keep in mind that host countries see FDI as a tool to advance their own development and hence seek maximum benefits from it.
  • Topic: Economics, International Trade and Finance, Foreign Direct Investment
  • Political Geography: China, Asia
  • Author: Sarah Hearn, Alejandra Kubitschek Bujones, Alischa Kugel
  • Publication Date: 05-2014
  • Content Type: Policy Brief
  • Institution: Center on International Cooperation
  • Abstract: There is a broad agreement that the United Nations' "Peacebuilding Architecture" (PBA) has failed to live up to the high hopes that existed when the 2005 World Summit agreed to establish the Peacebuilding Commission (PBC) and its related entities, the Peacebuilding Support Office (PBSO) and the Peacebuilding Fund (PBF).
  • Topic: International Cooperation, International Trade and Finance, United Nations, Peacekeeping
  • Author: Janne Salminen, Päivi Leino
  • Publication Date: 05-2014
  • Content Type: Policy Brief
  • Institution: Finnish Institute of International Affairs
  • Abstract: The actual need for Treaty amendments is open to interpretation, for example in relation to the inclusion of the recent euro crisis-related international agreements in EU law. These questions are partly political in nature, and linked to the wider legitimacy of the EU and the integrity and clarity of its legal system. The full realization of the Commission's vision for the future of the EMU would require Treaty changes in order to revise the nature of competence in the area of economic policy and the general framework of cooperation. The recent discussion on the euro crisis measures has demonstrated that many member states have constitutional 'red lines' relating, for example, to the exercise of budgetary powers or sovereignty. It seems unlikely that these hurdles will be overcome in the short term.
  • Topic: Economics, International Trade and Finance, Financial Crisis
  • Political Geography: Europe
  • Author: Edward Alden, Rebecca Strauss
  • Publication Date: 05-2014
  • Content Type: Policy Brief
  • Institution: Council on Foreign Relations
  • Abstract: Each year, U.S. state and local governments spend tens of billions of dollars to lure or retain business investment. The subsidies waste scarce taxpayer dollars that could better be used to strengthen public services such as education and infrastructure, or to lower overall tax burdens to create a more favorable investment climate. No state wants to dole out such subsidies, but most fear losing jobs to competing states if they refuse. States should take steps to curb subsidies, beginning with greater disclosure and cost-benefit analyses, and building up to a multistate agreement that creates strong disincentives for continuing subsidies. Existing international arrangements provide models and tools for achieving this.
  • Topic: Economics, International Trade and Finance, Governance, Reform
  • Political Geography: United States, North America
  • Author: Eneko Landaburu
  • Publication Date: 03-2014
  • Content Type: Policy Brief
  • Institution: EGMONT - The Royal Institute for International Relations
  • Abstract: Despite the hopes raised by the most recent Treaties, the Lisbon Treaty in particular, the European Union has been unable to strengthen, let alone develop its role on the international stage. A couple of weeks away from the European Parliament elections, we need to ask ourselves what can reasonably be done by the upcoming Parliament to ensure that significant progress is made with respect to the EU's foreign policy.
  • Topic: Security, Foreign Policy, International Trade and Finance, Regional Cooperation, Reform
  • Political Geography: Europe
  • Author: Xavier Vanden Bosch
  • Publication Date: 03-2014
  • Content Type: Policy Brief
  • Institution: EGMONT - The Royal Institute for International Relations
  • Abstract: In recent years much has been accomplished to make the EMU more resilient to banking crises, sovereign-debt crises or balance-of-payment crises. Several 'backstops' or financial safety nets were progressively put in place to absorb the shocks that could have otherwise broken the EMU as a system. These substantial advances reflected a gradual, trial-and-error approach rather than a grand design that would have completely overhauled the EMU architecture. While flexibility and realism have advantages, complacency is a clear risk. With no roadmap to follow, efforts to complete the architecture of the EMU may fade with time. Maintaining a sense of direction is crucial while potential vulnerabilities remain.
  • Topic: Economics, International Trade and Finance, Financial Crisis
  • Political Geography: Europe
  • Author: Miguel Pérez Ludeña
  • Publication Date: 05-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Multinational enterprises (MNEs) multiplied their profits made in developing countries by four between 2002 and 2011 (at current prices). In Latin America and the Caribbean, they rose from US$20 billion in 2002 to US$113 billion in 2011. The growth rate has been even higher in Africa and China, but much lower in developed countries. This rise is explained by an increase in FDI stock in developing economies and the higher average profitability of MNEs.
  • Topic: Economics, International Trade and Finance, Foreign Direct Investment
  • Political Geography: Africa, China, Latin America
  • Author: Louis T. Wells
  • Publication Date: 02-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: A recent Perspective concluded that, in countries given to sudden shifts in policy, "a host country government equity stake in a project may decrease project risk by giving the state a reason not to demand a renegotiation." An investor may benefit, but does the host country? In my experience, rarely.
  • Topic: Development, Economics, International Trade and Finance, Foreign Direct Investment
  • Author: Bruno Tertrais
  • Publication Date: 03-2014
  • Content Type: Policy Brief
  • Institution: Danish Institute for International Studies
  • Abstract: In France, natural uranium is immediately associated with the relationship to African countries. Uranium has always fed rumours, fantasies and conspiracy theories set against the background of all the colourful stories of what is known in France as the "Françafrique"; the web of personal and economic relations between Paris and its former colonies.
  • Topic: Economics, International Trade and Finance, Nuclear Power
  • Political Geography: Africa, Europe, France
  • Author: Marcus Noland
  • Publication Date: 04-2014
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: In recent years, despite a history of enmity and armed conflict that never really ended after the Korean War more than 60 years ago, South Korea has been a major investor in North Korea, and South Korean firms have employed more than 50,000 North Korean workers. South Korea's stated goal has been to encourage sufficient economic progress by North Korea, emboldening it toward establishing a meaningful basis for reconciliation and, ultimately, national unification. The expectation, or at least the hope, has been to use economic engagement to lessen the North's direct state control over the economy and to encourage the development of a middle class that might demand greater internal opening. The goal, as enunciated by former South Korean President Kim Dae-jung, has also been to foster a rise of interest groups with an enhanced stake in peaceable external relations.
  • Topic: Economics, Human Rights, International Trade and Finance, Bilateral Relations
  • Political Geography: Asia, South Korea, North Korea
  • Author: Joseph E. Gagnon
  • Publication Date: 06-2014
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: For the major advanced economies and the world as a whole, insufficient aggregate demand—that is, too little spending—impeded recovery from the Great Recession of 2008-09. By manipulating their currencies to boost their net exports, many countries made a bad situation worse for their trading partners, which saw demand shifted away. The world needs policies that increase total demand rather than policies that fight over the allocation of the existing amount of demand.
  • Topic: Economics, International Trade and Finance, International Monetary Fund
  • Political Geography: Europe, Asia, Switzerland, Singapore
  • Author: Rainer Geiger
  • Publication Date: 04-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Launched in July 2013 by the European Union and the United States, the Transatlantic Trade and Investment Partnership (TTIP) represents an important effort to reach a comprehensive economic agreement between two major trading partners. As has been pointed out, the project offers great opportunities for liberalizing trade and investment and regulatory convergence. Its level of ambition implies high risks, but despite negotiators' initial optimism, its success is far from certain.
  • Topic: Economics, International Trade and Finance, Treaties and Agreements, Foreign Direct Investment
  • Political Geography: United States, Europe
  • Author: John Gaffney, James Nicholson
  • Publication Date: 06-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: In their contribution to the FDI Perspectives series, Baiju Vasani and Anastasiya Ugale drew attention to an emerging trend in favor of the so-called "costs follow the event" (CFtE) (or loser pays) approach, which is in contrast to the more "traditional" approach under which parties share the costs of arbitration equally, with each party covering its own legal fees.
  • Topic: Economics, International Trade and Finance, Foreign Direct Investment
  • Author: Stefano Micossi, Ginevra Bruzzone, Miriam Cassella
  • Publication Date: 05-2014
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: In July 2013, the European Commission adopted a new Banking Communication – the seventh since the start of the financial crisis – updating its criteria for the evaluation of state aid in the banking sector in response to the evolving economic and institutional environment. Under this Communication, any credit institution in need of recapitalisation or 'impaired asset' measures will be required, prior to any further action, to submit a plan for restructuring or the orderly winding down the bank. Moreover, whenever there is a capital shortfall, the Commission will require that, prior to any injection of public funds, not only shareholders – as has been the case so far – but also junior creditors write down or convert into equity their claims on the bank, regardless of whether the bank is under resolution, in order to minimise the need for state aid.
  • Topic: Economics, International Trade and Finance, Monetary Policy
  • Political Geography: Europe
  • Author: Domenico Lombardi, James M. Boughton, Skylar Brooks
  • Publication Date: 06-2014
  • Content Type: Policy Brief
  • Institution: Centre for International Governance Innovation
  • Abstract: The IMF has struggled for decades to develop a set of lending practices that enable sovereign borrowers to resolve serious debt problems and restore economic growth, but also respect the right of private financial markets to enter into and enforce contractual obligations. The challenge has always been to operate under a well-defined set of principles while dealing with each situation in a way that takes account of relevant circumstances. Recently, the international financial crisis that began in 2008 and the subsequent European sovereign debt crisis have raised this challenge to new heights. In providing €30 billion to Greece — the largest financial package ever granted to a single country — the IMF invoked greater discretion in its lending decisions to counteract potential "systemic" crises. By doing so, it entered a program without a restructuring agreement.
  • Topic: Debt, Economics, International Trade and Finance, International Monetary Fund, Reform
  • Author: John Lee, Charles Horner
  • Publication Date: 04-2014
  • Content Type: Policy Brief
  • Institution: Hudson Institute
  • Abstract: U.S. administrations and officials are consistently caught flat-footed by the increasing assertiveness of the People's Republic of China (PRC) over disputed territories in the East China and South China Seas. This assertiveness is strident, yet controlled. Beijing's objectives in the region, with respect to maritime issues in particular, have been apparent for several decades. While the United States is well aware of the PRC's "talk and take" approach—speaking the language of negotiation while extending de facto control over disputed areas—U.S. policy has been tactical and responsive rather than strategic and preemptive, thus allowing China to control the pace and nature of escalation in executing talk and take.
  • Topic: International Relations, Diplomacy, Economics, International Trade and Finance, Bilateral Relations
  • Political Geography: United States, China, Asia