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  • Publication Date: 01-2016
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: This special report is prepared for the North American Forum (NAF). In 2015, CIGI’s Global Security & Politics Program became the Secretariat for the Canadian leadership within the NAF. CIGI will be undertaking a program of research to support the Canadian contribution to the NAF in cooperation with our American and Mexican partners. In the coming months, CIGI will publish additional reports to support the work of the NAF. Since the 1994 North American Free Trade Agreement, trade, investment and migration flows among Canada, Mexico and the United States have helped turn North America into one of the most dynamic and prosperous trade blocs on the planet. With a new government in Ottawa, it is an ideal time for Canada to make a stronger, deeper relationship with Mexico a crucial plank of a plan to secure a prosperous future for North America. Better relations between Mexico and Canada not only means more opportunities to take advantage of the two countries’ economic and social complementarities, it also gives the two countries the opportunity to closely work together to get the United States on board with an ambitious North American agenda to secure the continent’s economic future.
  • Topic: Security, Economics, International Trade and Finance, Politics, Regional Cooperation
  • Political Geography: United States
  • Author: Bertrand de la Chapelle, Paul Fehlinger
  • Publication Date: 04-2016
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The past 20 years have witnessed a profound change in the types of non-resident investors who provide funding to emerging market economies (EMEs) and the financial instruments through which emerging market (EM) corporations borrow from abroad. Until the beginning of the new millennium, private capital flows to EMEs were mainly intermediated by large global banks, and EMEs were subjected to massive volatility in their external payments balances, exchange rates and domestic financial systems. But since the early 2000s the role of bank-intermediated credit has declined, as the base of investors willing to take on exposure to EM corporate debt has become much larger and more diverse. These structural changes have encouraged a vast growth in flows of funds, not only from the mature economies to EMEs as a group, but also among EMEs themselves.
  • Topic: Debt, Economics, Emerging Markets, International Trade and Finance, Financial Crisis
  • Political Geography: Global Focus
  • Author: Jeff Rubin
  • Publication Date: 03-2016
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Canadian Prime Minister Justin Trudeau and Alberta premier Rachel Notley have both argued that improving Canada’s emissions record will safeguard the future development of the oil sands. The perspective offers little recognition of the current problems facing the country’s largest energy resource, and even less recognition of the problems that the oil sands will encounter as a result of actions taken by other countries to limit their own carbon emissions as pledged recently at the twenty-first session of the Conference of the Parties (COP21) to the United Nations Framework Convention on Climate Change (UNFCCC). As climate change compels deep decarbonization of the global economy, emission restrictions around the world will destroy demand for billions of barrels of oil over the coming decades, severely impairing the economic viability of high-cost producers.
  • Topic: Climate Change, Energy Policy, Environment, International Trade and Finance, Oil, United Nations, Natural Resources
  • Political Geography: Canada
  • Author: Patricia Goff
  • Publication Date: 02-2016
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) is noteworthy for the expanded role that Canadian provinces and territories played in the negotiation. In this particular instance, these sub-federal actors had a seat at the negotiating table at the request of their European Union partners. However, this paper argues that CETA is exceptional in this regard. Despite the fact that regional trade agreements increasingly contain provisions that relate to areas of provincial and territorial jurisdiction, each trade negotiation is distinct. The CETA experience should not create the expectation that provinces and territories will always participate in the same capacity. Any enhanced role will depend on the federal government’s strategic assessment of any specific trade negotiation.
  • Topic: International Trade and Finance, Markets, Political Economy, Treaties and Agreements, Regulation
  • Political Geography: Canada, European Union
  • Author: John Whalley, Daqing Yao
  • Publication Date: 03-2016
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The effects of the termination of the Multifibre Arrangement (MFA) on the trade of clothing and textiles are assessed in this paper, based on world trade date and US trade data. The findings from the data analyzed indicate that the effects of the termination of the MFA on the clothing trade was more significant for clothing than for the textiles trade. With the end of the MFA, the freer trade in these sectors shed light on other sectors that are still protected under trade agreements.
  • Topic: International Trade and Finance, Markets, Treaties and Agreements, Regulation
  • Political Geography: Global Focus
  • Author: James M. Boughton
  • Publication Date: 02-2016
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The International Monetary Fund (IMF) has 188 member countries. The United Nations has 193. The difference is not economically or politically trivial. Although none of the members missing from the IMF is a large country, two of the five are potentially important in their regions: Cuba and North Korea. What would it take to complete the process to have both countries included as IMF member countries? What are the obstacles to becoming members, and how can they be overcome? For three years, 1997 to 2000, tentative moves toward membership for North Korea were encouraged by South Korea and were tolerated by most Western powers. The détente did not last, but the episode offers a model for a resumption of progress if conditions improve. Notably, the IMF could provide technical assistance and training, collect economic data and provide information on its membership requirements and obligations. Cuban membership faces additional hurdles because of US laws that were targeted specifically at the government of Fidel Castro. Moreover, to this date, neither country has applied to join the IMF. Because every other country in the world, aside from the very smallest and those not generally recognized as states, has joined the IMF, it is virtually certain that Cuba will apply eventually, as will North Korea, unless that prospect is preempted by reunification of the Korean Peninsula. When they do apply, a concerted political commitment will be needed to overcome the remaining technical obstacles.
  • Topic: Economics, International Trade and Finance, Political Economy, United Nations, International Monetary Fund
  • Political Geography: North Korea, Cuba
  • Author: Wendy Dobson
  • Publication Date: 02-2016
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: This paper reviews Indonesia’s economic prospects and what these imply for a closer relationship with Canada. By posing the question “Is Indonesia the next China?,” the author suggests that Indonesia has the considerable economic potential envisaged by foreign investors, but conveys uncertainty as to whether Southeast Asia’s most populous country can make the changes necessary to realize that potential. A review of the economic record and comparison of China’s and Indonesia’s economic structures, endowments and institutions show major differences between the two countries. The paper further questions what it will take to realize Indonesia’s potential, finding the answers to be: human capital development; increased participation in the region’s global value chains; meeting the growing middle-class demand for modern services; raising productivity in agriculture and fishing; and increasing use of the Internet. Failure to make these changes will increase the chances of Indonesia’s growth in per capita incomes slowing and falling into the middle-income trap. Canada’s role will be to monitor closely how Indonesia tackles its five priorities at the same time as it responds to the opportunities to exploit Indonesia’s abundant natural resources, urbanization and its expanding consumer demand for modern services and educational opportunities.
  • Topic: Economics, Emerging Markets, Human Welfare, International Trade and Finance, Natural Resources, Regulation
  • Political Geography: China, Indonesia
  • Author: Patrick Leblond
  • Publication Date: 02-2016
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) is possibly the most ambitious regional free trade agreement that Canada and the European Union have negotiated so far. One of its main components is a chapter that seeks to liberalize trade and investment in financial services between Canada and the European Union, while ensuring that markets and their agents will be properly regulated and protected through prudential regulation. However, this chapter is unlikely to have a significant impact on the financial services sector in Canada and the European Union in the short and medium term. Although some observers fear that CETA might undermine the high quality of financial regulations in Canada or the European Union, this paper’s analysis demonstrates that such concerns are unfounded.
  • Topic: International Trade and Finance, Markets, Treaties and Agreements, Regulation
  • Political Geography: Canada, European Union
  • Publication Date: 02-2016
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: This paper analyzes the impact of four major financial sector sustainability codes of conduct, the UN Environmental Programme Finance Initiative, the UN Principles for Responsible Investment, the Equator Principles and the Global Alliance for Banking on Values with regard to their impact on the sustainability of their members. The codes of conduct focus on the integration of environmental, social and governance criteria into financial decision making in lending, investment, asset management and project finance. corporate sustainability voluntary codes of conduct have a positive impact on their members. The effectiveness, however, depends on the quality and content of a code, as well as on implementation and compliance mechanisms.
  • Topic: Economics, International Trade and Finance, Markets, United Nations, Ethics
  • Political Geography: Global Focus
  • Author: Malcolm D. Knight
  • Publication Date: 03-2016
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The past 20 years have witnessed a profound change in the types of non-resident investors who provide funding to emerging market economies (EMEs) and the nancial instruments through which emerging market (EM) corporations borrow from abroad. Until the beginning of the new millennium, private capital ows to EMEs were mainly intermediated by large global banks, and EMEs were subjected to massive volatility in their external payments balances, exchange rates and domestic nancial systems. But since the early 2000s the role of bank- intermediated credit has declined, as the base of investors willing to take on exposure to EM corporate debt has become much larger and more diverse. These structural changes have encouraged a vast growth in ows of funds, not only from the mature economies to EMEs as a group, but also among EMEs themselves.
  • Topic: International Political Economy, International Trade and Finance
  • Political Geography: Global Focus
  • Author: August Reinisch
  • Publication Date: 03-2016
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Since the transfer of foreign direct investment powers from the European Union member states to the European Union itself in the 2009 Treaty of Lisbon, the European Commission, the main external trade actor for the European Union, has started to negotiate international investment agreements as well as investment chapters in enlarged free trade agreements (FTAs). Both contain substantive protection standards and enforcement mechanisms in case of disputes, usually both state–state and investor–state arbitration (ISA). With regard to the latter, it was unclear whether the European Commission, the European Union’s experienced World Trade Organization (WTO) litigator, would continue to use the interstate template of trade disputes or venture into ISA. After an initial orientation period, the European Commission rmly endorsed ISA, as demonstrated by the negotiations with Canada on the Comprehensive Economic and Trade Agreement (CETA) and with the United States on the Transatlantic Trade and Investment Partnership (TTIP). Meanwhile, however, public opposition to the TTIP, and to ISA in particular, has formed in unexpected dimensions. It even led the European Commission to partially interrupt its trade negotiations with the United States in order to conduct a public consultation on the investment aspects of the TTIP. Ever since, ISA has remained one of the most controversial parts of the planned trade agreements. Most recently, the European Commission tabled a TTIP proposal to set up a permanent investment court that would replace the system of ad hoc ISA. This paper analyzes in detail the development of the European Union’s position toward the use of ISA as a means for settling investor-state disputes.
  • Topic: International Political Economy, International Trade and Finance
  • Political Geography: European Union
  • Author: Hugo Perezcano
  • Publication Date: 04-2016
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Investor-state arbitration (ISA) has been a controversial topic and a source of criticism and debate for quite some time. Yet, it continues to be a standard feature of modern international investment agreements (IIAs). While opposition to ISA has traditionally come from certain sectors of civil society, there appears to be a growing discomfort now among states as well. Some critics suggest that ISA is unnecessary and should be left out of IIAs altogether. Others argue that it may be needed in IIAs between developed nations that are mostly capital exporters, on the one hand, and developing countries that require foreign capital to promote development, on the other, but that it is unwarranted in IIAs that developed countries enter into among themselves. They reason that developed countries have robust legal frameworks and institutions, including responsive judiciaries, that adequately protect private investment and, therefore, ISA can safely be omitted from such IIAs without any detriment to foreign investors or their investments. This paper addresses some of the aws in the arguments that have been advanced in support of this position, as well as some of its implications, especially the reaction that might be expected from developing countries if developed countries were to back away from ISA in their dealings with other developed nations but continue to demand its inclusion in their agreements with developing countries.
  • Topic: International Political Economy, International Trade and Finance
  • Political Geography: Global Focus
  • Author: Marc Lalonde
  • Publication Date: 05-2016
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: I have rarely seen, in my long life, a change as unjustified as the one represented by the new investment tribunal structure now found in the agreed text of the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union. First of all, it is a poor solution based on a faulty premise. It is the result of an ill-informed but obviously effective campaign by mainly European lobbies[1] and some groups in the European Parliament, which have argued, without proper quantitative or qualitative support, that the present system is biased in favour of foreign investors. If this were the case, how can they explain that, according to the latest statistics from the International Centre for Settlement of Investment Disputes (ICSID), only 46 percent of all ICSID awards upheld (in part or in full) investors’ claims, while 53 percent of the claims were dismissed for lack of jurisdiction or on the merits, and another one percent were rejected as manifestly without legal merit.[2] Similarly, in its 2014 World Investment Report, the United Nations Conference on Trade and Development (UNCTAD) came to the conclusion that, out of 274 concluded investment treaty cases in 2013, 43 percent were decided in favour of the state, 31 percent in favour of the investor and 26 percent were settled.[3]
  • Topic: International Political Economy, International Trade and Finance
  • Political Geography: Global Focus
  • Author: Rajeswari Sengupta, Abhuit Sen Gupta
  • Publication Date: 04-2015
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Gross capital inflows and outflows to and from emerging market economies have witnessed a significant increase since the early 2000s. This rapid increase in the volume of flows, accompanied by sharp swings in volatility, has amplified the complexity of macroeconomic management in emerging economies. This paper focuses on capital flows in selected emerging Asian economies, analyzing surge and stop episodes as well as changes in the composition of flows across these episodes, then evaluating the policy measures undertaken by these economies in response to the surge and stop of capital flows. This kind of analysis is highly relevant, especially at a time when emerging economies around the world are facing the repercussions of a potential monetary policy normalization in the United States and continuing quantitative easing measures by the European Central Bank, either of which could once again heighten the volatility of cross-border capital flows, thereby posing renewed macroeconomic challenges for major EMEs.
  • Topic: Economics, Emerging Markets, International Trade and Finance, Monetary Policy
  • Political Geography: Asia
  • Author: Isabelle Duchane, Kateryna Dzaha, James Supeene
  • Publication Date: 07-2015
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The absence of an effective international regime for cross-border resolution of financial firms led to the disorderly failure of a number of global banks during the global financial crisis, at a high cost to taxpayers and global financial stability. Many jurisdictions still lack sufficient resolution powers and arrangements for cross-border cooperation. This brief proposes that the Financial Stability Board’s Key Attributes of Effective Resolution Regimes for Financial Institutions should be fully implemented within the Group of Twenty (G20) and expanded to include non-G20 states. The FSB should develop a series of model laws on cross-border resolution and endorse a multilateral memorandum of understanding containing reciprocal commitments among the signatories.
  • Topic: International Trade and Finance, Financial Crisis, Reform, G20
  • Political Geography: Global Focus
  • Author: Bruce Muirhead
  • Publication Date: 12-2015
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: As Robert Reich, a former labor secretary under Bill Clinton, once asked, with reference to the United States, “Where does the biggest gorilla sit? Anywhere it likes.” Dairy has long been a protected sector in the United States, which has a history of constructing its own reality with respect to freeing up international trade in agricultural products, milk included, and of ignoring or renegotiating commitments when they did not suit the government of the day. This background paper explores the historical evolution of US trade and agricultural policy as seen through its position on the dairy file in international trade regulations.
  • Topic: Agriculture, International Trade and Finance, Food, Food Security
  • Political Geography: United States of America
  • Author: Maria Paniezi
  • Publication Date: 11-2015
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Carbon taxes become relevant for international trade when they are coupled with border tax adjustment (BTA) legislation for imported products. BTAs are intended to level the playing field between domestic and foreign products, but such tax schemes, if not designed properly, can be found to violate a country’s international commitments before the World Trade Organization (WTO). This paper argues that environmentally conscious governments can impose a WTO-compatible BTA to offset domestic CO2 legislation, and that federal governments need to engage in coordinated efforts to harmonize treatment of high CO2 emitters domestically, since domestic industries will not bear the burden of environmental regulation alone.
  • Topic: Climate Change, Environment, International Trade and Finance, World Trade Organization
  • Political Geography: Global Focus
  • Author: James Hinton, Kent Howe
  • Publication Date: 04-2015
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: This report outlines the impetus behind the Centre for International Governance Innovation (CIGI) International Intellectual Property Law Clinic, which operated for three months in 2014. It consisted of a partnership among the CIGI International Law Research Program (ILRP), Communitech (the Region of Waterloo’s hub for commercialization of innovative technologies) and leading intellectual property (IP) law firms. The report describes the new innovator’s commercialization dilemma — a multifaceted dilemma arising from lack of IP legal knowledge, lack of financial resources and the high costs associated with IP protection, all of which combine to place the new innovator in a vulnerable position at the early stages of their commercialization timeline. After briefly surveying the current environment for entrepreneurship-based clinics, the report describes the elements and structure of the CIGI clinic. The advantages for participating students as well as first-hand accounts of the benefits of the CIGI clinic are also detailed. Taking lessons learned from the CIGI clinic, the report illustrates how an IP-focused law clinic can help to address the commercialization dilemma. The report describes the manner in which IP clinics might be structured, while reviewing the associated benefits and challenges for each structure. The report also makes brief recommendations for governments, law societies, law schools and IP offices to support the provision of IP legal services through the law clinic model.
  • Topic: Environment, International Trade and Finance, Intellectual Property/Copyright, Governance, Entrepreneurship
  • Political Geography: Global Focus
  • Author: Barry Eichengreen, Domenico Lombardi , Malcolm D. Knight, Yu Yongding, Stephen G. Cecchetti, Diane De Gramont, Şebnem Kalemli-Özcan, Phillip R. Lane, Ugo Panizza, Viral V. Acharya
  • Publication Date: 09-2015
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: During 1999-2007, the international balance sheets of emerging economies grew stronger through a combination of current account surpluses, a shift from debt funding to equity funding, and the stockpiling of liquid foreign reserves. This risk-mitigating strategy improved the international financial standing of many emerging economies and helped these economies withstand the 2008-2009 global financial crisis. However, a combination of domestic and external factors has led to a partial reversal of this strategy, with some emerging economies accumulating significant external debt since 2010. Previewed by the May 2013 “taper tantrum,” there has been considerable speculation that a tightening of dollar-funding conditions and a macroeconomic slowdown in emerging economies may result in financial instability in some emerging economies.
  • Topic: Debt, Economics, Emerging Markets, International Trade and Finance, Financial Crisis, Global Markets
  • Political Geography: Global Focus
  • Author: Renuka Sane
  • Publication Date: 04-2015
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: This paper provides a brief description of the principles of cross-border resolution that have emerged after the 2008 global financial crisis, and the progress that has been achieved. The paper then provides an overview of developments on resolution of financial firms in India. It finds that while there is cognizance of the need for international cooperation on resolution, the focus is on first developing institutional capacity on domestic resolution that can interact with the international community in the future. The policy choices of India may be reflective of the thinking in a large number of emerging markets, which considerably lag behind the more developed markets, partly due to lower interconnectedness and partly due to limited experience in domestic resolution.
  • Topic: Development, Emerging Markets, International Trade and Finance, Political Economy, Financial Crisis
  • Political Geography: India
  • Author: Leonard Edwards, Peter Jennings
  • Publication Date: 02-2014
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Canada and Australia have shared interests in bolstering economic prosperity and security cooperation across East Asia. The focus of the world economy has shifted to Asia; Canada should follow the path Australia has taken for decades and orient itself — in economic and security terms — toward the emerging economies of East Asia. The risk of regional instability is growing, however, due to China's re-emergence, continued speculation about US strategic engagement in Asia and increased competition over disputed maritime boundaries. These developments provide opportunities for collaboration between countries like Canada and Australia. Non-traditional security threats, including natural disasters, climate change, food security and cyber security, point to a range of areas where the two countries can work more closely together.
  • Topic: Security, Diplomacy, Economics, International Trade and Finance, Bilateral Relations, Governance
  • Political Geography: America, Canada, Australia
  • Author: Pierre Siklos
  • Publication Date: 02-2014
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Reforms of the financial system in the wake of the global financial crisis are incomplete. Beyond reforms, good judgment is essential in a crisis. Short-termism in finance cannot be completely controlled by regulation and supervision. Financial crises are inevitable but need not be as virulent at the global financial crisis. Central banks will have to rethink their policies and how they interact with other agencies partially responsible for maintaining financial system stability.
  • Topic: Economics, Globalization, International Trade and Finance, Financial Crisis, Governance, Reform
  • Political Geography: Europe
  • Author: James M. Boughton
  • Publication Date: 03-2014
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Canadians have long harboured a desire to "punch above their weight" in international diplomacy, an aspiration justified by Canada's position in the world both geographically and culturally. This paper examines one aspect of that effort: Canada's role in international financial governance, particularly within the International Monetary Fund. The key issue for the future is whether Canada will continue to have the capacity and the will to take leading positions and actions in the face of increasing competition from the rapidly growing emerging market countries.
  • Topic: Economics, Emerging Markets, International Trade and Finance, International Monetary Fund, Governance
  • Political Geography: United States, Canada
  • Author: Bruce Muirhead
  • Publication Date: 04-2014
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Canada's system of dairy supply management, where domestic supply is matched with domestic demand, has come under fire in recent years, criticized for being a regulated model in an increasingly deregulated world. This background paper explores the historical evolution of dairy in Canada, and why supply management was eventually implemented in the 1960s, bringing rationality and organization to an industry where none had existed before. It also examines the role of international trade negotiations, largely sponsored by the General Agreement on Tariffs and Trade (GATT) and, after 1995, by the World Trade Organization (WTO), in addressing issues of agricultural protectionism and exceptionalism. It was not until the Uruguay Round (1986–1993), however, that agriculture was included in these negotiations, as neither the European Union (and its antecedents) nor the United States demonstrated any interest. While Uruguay was a tentative beginning, the subsequent Doha Round has dissolved over agricultural problems. In all these venues, supply management has been protected by Canadian governments, but rising international pressure has led Canada to begin to reconsider its support, especially as bilateral trade negotiations and partners are unequivocally opposed to dairy supply management.
  • Topic: Agriculture, Economics, International Trade and Finance, World Trade Organization, Bilateral Relations
  • Political Geography: Canada, North America
  • Author: James A. Haley
  • Publication Date: 05-2014
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Ten years ago, in the wake of the Asian financial crisis and subsequent Argentine default, the international community debated how to best promote the timely, effective restructuring of sovereign debt. The debate then focused largely on the relative merits of a so-called statutory approach for sovereign restructurings, with features of domestic bankruptcy regimes, versus the voluntary use of contractual terms designed to facilitate restructurings. At the time, the statutory approach did not have the support necessary to move from proposal to policy and efforts to improve the framework of sovereign debt restructuring rested on the contractual approach.
  • Topic: Economics, International Trade and Finance, Financial Crisis
  • Political Geography: Asia
  • Author: Aaron Shull
  • Publication Date: 06-2014
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Examining global cybercrime as solely a legal issue misses an important facet of the problem. Understanding the applicable legal rules, both domestically and internationally, is important. However, major state actors are using concerted efforts to engage in nefarious cyber activities with the intention of advancing their economic and geostrategic interests. This attempt to advance a narrow set of economic interests through cybercrime and economic cyber espionage holds to the potential to erode the trust in the digital economy that has been a necessary condition for the success of the Internet as an economic engine for innovation and growth. By pursuing these efforts, states are prioritizing short-term interests over long-term stability and a responsibly governed, safe and secure Internet platform. This paper explores the recent unsealing of a 31-count indictment against five Chinese government officials and a significant cyber breach, perpetrated by Chinese actors against Western oil, energy and petrochemical companies. The paper concludes by noting that increased cooperation among governments is necessary, but unlikely to occur as long as the discourse surrounding cybercrime remains so heavily politicized and securitized. If governments coalesced around the notion of trying to prevent the long-term degradation of trust in the online economy, they may profitably advance the dialogue away from mutual suspicion and toward mutual cooperation.
  • Topic: Defense Policy, Crime, International Trade and Finance, Terrorism, Bilateral Relations
  • Political Geography: United States, China, Asia
  • Author: Patricia M. Goff
  • Publication Date: 07-2014
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: In October 2013, Prime Minister Stephen Harper announced that the Government of Canada had reached a "political agreement" with the European Union on the Comprehensive Economic and Trade Agreement (CETA). The timing of Mr. Harper's statement was not coincidental. Evidence suggests that talks between Canada and the European Union are actually continuing several months after his announcement, if only on technical elements. Nonetheless, it seems the Government of Canada wanted to signal that a successful end to Canada-EU talks was in sight, just as talks between the United States and the European Union were getting under way towards the Trans-Atlantic Trade and Investment Partnership (TTIP). The Canadian government did not want to risk a redirection of European energies away from the Canadian negotiation toward their American counterparts.
  • Topic: Economics, International Trade and Finance
  • Political Geography: Europe, Canada
  • Author: Steven L. Schwarcz
  • Publication Date: 11-2014
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The International Law Research Program (ILRP) of the Centre for International Governance Innovation (CIGI) welcomes the opportunity to comment on the Financial Stability Board's (FSB's) Consultative Document, “Cross-Border Recognition of Resolution Action” (hereafter referred to as the “Consultative Document”) that was released on September 29, 2014.
  • Topic: International Trade and Finance, Financial Crisis, Reform
  • Author: Jason Thistlethwaite
  • Publication Date: 10-2014
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: In recent years, a plurality of different governance initiatives has emerged that are designed to expand the disclosure of environmental risk within financial markets. The emergence of these initiatives represents an important policy development, and it has the potential to reduce environmental risk within the financial sector by incentivizing investments in sustainable economic activity capable of long-term value creation. Unfortunately, environmental risk disclosure has yet to be assessed as a field of governance activity in addition to its potential effectiveness in improving disclosure within financial markets. This paper addresses this gap by describing environmental risk disclosure as a “regime complex” that is defined by a field of fragmented but related governance initiatives that lacks an overarching hierarchy. While this regime complex does reveal evidence for policy convergence among different initiatives, it lacks the enforcement necessary to produce a coherent and comparable disclosure and contributes to uncertainty within the financial sector over the impact of environmental risk. This uncertainty justifies an expanded role of international financial regulations in establishing a mandatory and harmonized disclosure standard that can be applied across different domestic jurisdictions.
  • Topic: Environment, International Trade and Finance, Markets
  • Political Geography: United Nations
  • Author: John Whalley, Hejing Chen
  • Publication Date: 10-2014
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: China, in the next few years, faces the prospect of major regional and bilateral trade negotiations possibly including the Trans-Pacific Partnership (TPP), the Regional Comprehensive Economic Partnership with the Association of Southeast Asian Nations (ASEAN) and Japan, Korea, India, Australia and New Zealand and separate negotiations with India, Korea and Japan, potentially the United States and even possibly the European Union. A likely key element in such negotiations, and one already raised by the United States in the TPP negotiations, is that of trade arrangements involving state-owned enterprises (SOEs). China is viewed from outside as having a large SOE sector, and large SOEs are viewed as having a protected monopoly position in domestic Chinese markets.
  • Topic: International Trade and Finance, Markets, World Trade Organization
  • Political Geography: Japan, China, Europe, India, Asia, Australia, Korea
  • Author: Alex He
  • Publication Date: 10-2014
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: As the largest emerging economy, China believes that the Group of Twenty (G20), instead of the Group of Eight (G8), is the ideal platform for its participation in global governance. This paper examines the reasons why China joined the G20 rather than the G8, and then focuses on a detailed review of China's participation in G20 summits since the enhanced forum began in 2008. China took a very active and cooperative attitude in dealing with the global financial crisis in 2008-2009. The paper observes that China also insisted on its own agenda for reforms to the international monetary system, through reforms to the international financial institutions that manage it — in particular, raising the number of voting shares and the representation of developing countries at the IMF and the World Bank. Based on the reviews of China's performance in the G20 summits since 2008, the paper explores China's policy making through its participation in the G20, determining that it is shaped by several major economic departments in addition to the Ministry of Foreign Affairs, and coordinated by a vice premier responsible for economic and financial affairs. The paper concludes that China has gained immensely from its participation in the G20. Most importantly, China entered the centre stage of global economic governance through the G20, which allowed the country to demonstrate that it is a responsible great power, and communicate and maintain relations with other major powers. The main challenges China has faced since joining the G20, from the perspective of some Chinese scholars, are a lack of capacity for agenda setting and shaping initiatives, as well as inadequate communication and coordination among different government departments and between the Sherpa and financial tracks of the G20.
  • Topic: Economics, International Political Economy, International Trade and Finance, International Monetary Fund, Global Recession, Financial Crisis, World Bank
  • Political Geography: China
  • Author: Alex He
  • Publication Date: 08-2014
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The G20 has emerged as the lynchpin of China's involvement in global economic governance. It remains the only economic institutional setting where the country can operate on par with major Western powers. China has a strong interest in maintaining the status of the G20 as the premier forum for economic cooperation, and a vested interest in ensuring that the G20 does not degrade into yet another “talk shop” of multilateral diplomacy. However, the Chinese leadership's current approach to the G20 is not driven by a desire to position the country as a leading agenda setter. Instead, China's main policy priority is ensuring that the country is treated as an equal and respected partner. China recognizes that in many ways it is still in a comparatively weak position and does not have the institutional capabilities and talents needed to operate in global financial and economic institutions such as the G20.
  • Topic: Economics, International Cooperation, International Trade and Finance
  • Political Geography: United States, China
  • Author: Malcolm D. Knight
  • Publication Date: 09-2014
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The global financial crisis that began in 2007 and deepened in 2008 exposed major weaknesses in financial and macroeconomic policy coordination, and profound flaws in financial risk management and regulation in a number of advanced countries. The severity of the crisis led global leaders to recognize that they must find a way to reform the global regulatory architecture to ensure that the financial system can absorb shocks while continuing to function efficiently.
  • Topic: International Trade and Finance, Markets, International Monetary Fund, Financial Crisis, Reform
  • Political Geography: United States, United Kingdom, Europe
  • Author: Sarah Norgrove
  • Publication Date: 09-2013
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The possibilities for future Asia-Pacific security cooperation between Australia and Canada are promising. Economic development and population growth mean that security challenges present themselves as opportunities. Australia and Canada are well positioned to influence regional approaches to transnational challenges such as crime, terrorism, piracy and environmental degradation, and to contribute to food, energy and cyber security. This paper explores the current state of security cooperation between Australia and Canada in the Asia-Pacific, and identifies opportunities to extend the relationship, focussing on collaborative efforts like economic and maritime cooperation, which may help tackle transnational security challenges.
  • Topic: Security, Development, Economics, International Trade and Finance, Treaties and Agreements
  • Political Geography: Canada, Asia, Australia
  • Author: Pierre Siklos, Martin T. Bohl, Arne C. Klein
  • Publication Date: 12-2013
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Existing models of market herding suffer from several drawbacks. Measures that assume herd behaviour is constant over time or independent of the economy are not only economically unreasonable, but describe the data poorly. First, if returns are stationary, then a two-regime model is required to describe the data. Second, existing models of time-varying herding cannot be estimated from daily or weekly data, and are unable to accommodate factors that explain changes in this behaviour. To overcome these deficiencies, this paper proposes a Markov switching herding model. By means of time-varying transition probabilities, the model is able to link variations in herding behaviour to proxies for sentiment or the macroeconomic environment. The evidence for the US stock market reveals that during periods of high volatility, investors disproportionately rely on fundamentals rather than on market consensus.
  • Topic: Economics, Globalization, International Trade and Finance, Markets, Financial Crisis
  • Political Geography: United States, Canada
  • Author: Fritz H. Pinnock, Ibrahim A. Ajagunna
  • Publication Date: 03-2012
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The port structure of the Caribbean has been heavily influenced by global change over the last 200 years. The historical context — colonialism, piracy and slavery — meant that ports were originally designed to serve colonial interests. The advent of containerization and globalization have dramatically changed cargo shipping, while at the same time, cruise tourism has increased significantly — the Caribbean accounts for 50 percent of the global market — which means that cargo and cruise ships now compete for limited berth space.
  • Topic: International Trade and Finance, Post Colonialism, Science and Technology, Maritime Commerce
  • Political Geography: Caribbean
  • Author: Paul Blustein
  • Publication Date: 06-2012
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Cooperation among major countries to shrink global imbalances in trade and capital flows is highly desirable for the sake of promoting a sustainable recovery from the financial crisis that erupted in 2008. The story that unfolds in this paper does not bode well for such cooperation. It is a detailed account of the initiatives, led by the IMF, to address imbalances prior to the 2008 global financial crisis.
  • Topic: Economics, International Trade and Finance, International Monetary Fund
  • Political Geography: China
  • Author: James A. Haley
  • Publication Date: 06-2012
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The G20 leaders meeting in Los Cabos confront a number of challenges. Most prominent among these is the state of the global economy, which remains dangerously unbalanced, and in which the balance of risks is clearly weighted on the downside. These risks emanate from several sources.
  • Topic: Economics, International Cooperation, International Organization, International Trade and Finance, Markets, Financial Crisis
  • Political Geography: China
  • Author: Perrin Beatty, Andrés Rozental
  • Publication Date: 11-2012
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Both Canada and Mexico are recovering well from the global economic recession of 2008-2009, but must work harder to make their bilateral relationship work to their mutual benefit. Bilateral trade and investment have grown steadily from very low pre-North American Free Trade Agreement (NAFTA) levels, but there remains enormous, untapped potential, particularly in Mexico. Student, tourist, investor and temporary worker exchanges are enhancing familiarity with each other, but unhelpful stereotypes remain common. New investment and trade opportunities should flow from the new Mexican administration's commitment to open up the energy sector to foreign participation. The assessment and recommendations contained in this special report point to the benefit of efforts that will intensify bilateral partnerships, not only in their own right, but also in strengthening the two countries' ability to deal more effectively with the United States in pursuing matters of mutual concern.
  • Topic: Economics, International Trade and Finance, Markets, Bilateral Relations
  • Political Geography: United States, Canada, Latin America, North America, Mexico
  • Author: James Manicom
  • Publication Date: 11-2012
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The United States and Canada have simultaneously re- invigorated their diplomatic and military postures toward the Asia-Pacific region. As two of the world's closest allies, it is worth exploring the possible synergies and tensions between their efforts to identify areas of possible policy coordination. Canada has considerable assets that could support US diplomacy in the region, including the legacy of its good offices and its close ties with the US military; however, these assets are outweighed by three liabilities. First, Canada's diplomacy to the Asia-Pacific is driven by its desire to diversify away from the US market. Although relatively innocuous in isolation, the politics of this shift, driven by growing concern in Canada about whether the United States remains a reliable market for energy exports, adds a layer of complexity. Second, Canada's closer economic ties with China could undermine its willingness to support the United States on tough regional security issues in the Asia-Pacific. Third, and related, Canadian silence about navigational freedoms, the primary security issue between the United States and China in East Asia, has not gone unnoticed. This paper argues that, on balance, Canada may not be an ideal Pacific partner for the United States.
  • Topic: Defense Policy, Arms Control and Proliferation, Diplomacy, International Trade and Finance, Bilateral Relations
  • Political Geography: United States, China, Canada, East Asia, Asia, Australia/Pacific, Asia-Pacific
  • Author: Gordon S. Smith
  • Publication Date: 05-2011
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: This paper provides a brief history of the evolution of the Group of Seven (G7) from its origins in the aftermath of the 1971 breakdown of the Bretton Woods system of exchange rates and the oil crisis in 1973. It then discusses Russia's participation at summits after the fall of the Berlin Wall, formally joining the group in 1997, thus becoming the Group of Eight (G8). The paper gives a concise account of the formation of the Group of Twenty (G20) finance ministers and central bank governors in the late 1990s, in the wake of financial crises in Asia and Latin America, which was elevated to a leaders' summit forum at the outbreak of the global financial crisis in 2008. The paper wraps up with a discussion of the differences in the G8 and G20 models, concluding that the G20 process is still the best option for meeting the challenges of complex global governance issues.
  • Topic: International Cooperation, International Organization, International Trade and Finance, Financial Crisis, Governance
  • Political Geography: Russia, Asia, Latin America
  • Author: Avinash D. Persaud
  • Publication Date: 10-2011
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The desks of civil servants in small states are stacked with yellowing consultancy reports from multilateral agencies on the need to generate sustainable jobs and growth, attract investment, bolster infrastructure and institutions, and improve the efficiency and reduce the expense of government. The real question is not what, but why? Why, in spite of everything we know, are many small states, especially those in the Caribbean, trapped in a zone of low growth, stagnation or relative decline? Policy makers face physical and financial constraints and implementation deficiencies, but the overriding constraint, even more so than in other countries, is political economy.
  • Topic: Development, Economics, International Trade and Finance, Poverty, Maritime Commerce
  • Political Geography: Caribbean
  • Author: John Whalley, Chunding Li, Jing Wang
  • Publication Date: 07-2011
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The term "mega deal" has been widely used in relation to two large prospective trade deals between the United States and Europe – the Transatlantic Trade and Investment Partnership (TTIP) — and in Asia and the Pacific — the Trans-Pacific Partnership (TPP). This paper starts by exploring a possible description of trade mega deals by making an inventory of mega deals in place, under discussion or negotiation, and deals yet to be considered under different criteria. This paper also calculates the trade volume coverage and trade barrier coverage for potential mega deals, and the results show the potential impact of mega deals on trade and growth performance is large.
  • Topic: Development, Economics, International Trade and Finance
  • Political Geography: United States, Europe, Asia
  • Author: Diana Thorburn, John Rapley, Damien King, Collette Campbell
  • Publication Date: 09-2010
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The Economic Partnership Agreement (EPA) signed in 2008 signalled a new era of trade relations between the European Union (EU) and the Caribbean Forum of African, Caribbean and Pacific States (CARIFORUM). Caribbean exporters previously had greater duty-free access to the EU market than European exporters enjoyed in the Caribbean, along with quotas that enabled them to avoid price competition with rivals from outside the Lomé ACP (Africa, Caribbean and Pacific) bloc.
  • Topic: Economics, International Trade and Finance, Treaties and Agreements
  • Political Geography: Africa, Europe, Caribbean
  • Author: Richard L. Bernal
  • Publication Date: 12-2009
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Given their vulnerability to external economic events, small developing countries (SDEs) are particularly cognizant of their place in the world economy. Moreover, given their reliance on international trade for prosperity, SDEs are also concerned about the rules and institutions governing the multilateral trading system. In this paper, the author reviews and evaluates the participation of SDEs in the governance of the multilateral trading system, with a particular focus on the WTO. He suggests how SDEs can improve the efficacy of their participation in the WTO's decision-making process, and proposes ways in which the WTO could be adapted to better integrate SDEs in its governance.
  • Topic: Economics, Emerging Markets, International Trade and Finance, Third World, World Trade Organization