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111. Templates for Trade: Change, Persistence and Path Dependence in U. S. and EU Preferential Trade Agreements

Author:
Ali Arbia
Publication Date:
09-2013
Content Type:
Working Paper
Institution:
The Kolleg-Forschergruppe (KFG)
Abstract:
Over the last two decades, Preferential Trade Agreements (PTAs) proliferated through the international trading system. PTAs created a web of rules paralleling and extending the system of the World Trade Organization (WTO). PTAs are an increasingly dominant feature of the international trading system, adding to a steadily increasing complexity. Their content is rarely studied systematically across agreements, and the mechanisms leading to their genesis are little understood. It is typically assumed that actors like the European Union (EU) and the United States (U. S.) work off a template when negotiating PTAs. Some argue that this allows them, amongst others, to impose a regulatory regime. This working paper attempts to put this claim to the test. Using diffusion theory as framework, it analyzes PTAs signed by the EU, the U. S. and their regional trading partners. Understanding the use of templates will help negotiating parties to assess the margin of maneuver when negotiating PTAs with the EU and the U. S. as well as the rigidity of their mandate. The analysis is conducted on a regional and a domestic level using aggregated data on PTA content and a qualitative assessment of selected PTA provisions (anti-corruption, environment and cultural cooperation). The study finds that the flexibility of these mandates is considerable and that templates, if used at all, can change substantially over time.
Topic:
Economics, International Trade and Finance, Treaties and Agreements, and Governance
Political Geography:
United States and Europe

112. Iceland and Europe: Drifting further apart?

Author:
Baldur Thorhallsso and Alyson J. K. Bailes
Publication Date:
09-2013
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
Iceland applied for EU membership in 2009 at the height of the economic crisis. Four years later, a new government has put the application on hold: the majority of Icelanders are opposed to entry, but want to continue the accession process and put the results to a vote. Iceland's longer-standing problems with European integration stem from the issue of sovereignty in general, and maintaining control over fisheries and agriculture in particular. Since 2009, anti-European feelings have been stoked by the 'Icesave' dispute, while the prospective benefits of entry (including use of the euro) have been tarnished by witnessing the fate of other small states during the euro crisis. The new government proposes remaining a member of the EEA and developing relations with other world powers. But the US commitment to Iceland has weakened over the years, and 'rising' powers like China are unable, as yet, to solve the country's core problems. In terms of both its security and its standing within the global economy, Iceland is becoming more rather than less dependent on Europe over time. The question raised by the latest political turn is whether it will have to maintain that relationship from a distance, with limited control and with no guaranteed goodwill.
Topic:
Economics, International Trade and Finance, Political Economy, Regional Cooperation, Treaties and Agreements, and Financial Crisis
Political Geography:
United States and Europe

113. Lehman Died, Bagehot Lives: Why Did the Fed and Treasury Let a Major Wall Street Bank Fail?

Author:
William R. Cline and Joseph E. Gagnon
Publication Date:
09-2013
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
Five years after the Federal Reserve and the Treasury allowed the investment bank Lehman Brothers to fail, their actions (or inaction) remain a focus of debate. Some argue that it was an inconsistent policy to have let Lehman fail while making emergency loans to save other large financial institutions in the same time frame. In this Policy Brief we present evidence that the Fed and Treasury had a sound reason to have bailed out other institutions while letting Lehman fail. Simply put, Lehman was insolvent—probably deeply so—whereas the other institutions arguably were solvent. In addition, the other institutions had abundant collateral to pledge, whereas what little collateral Lehman had to pledge was of questionable quality and scattered across many affiliated entities. Thus, federal officials, at least in hindsight, appear to have followed the dictum of Walter Bagehot (cited above), which has guided central banks for almost 150 years.
Topic:
Debt, Economics, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
United States

114. Oil, Conflict, and U.S. National Interests

Author:
Jeff D. Colgan
Publication Date:
10-2013
Content Type:
Policy Brief
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
Although the threat of “resource wars” over possession of oil reserves is often exaggerated, the sum total of the political effects generated by the oil industry makes oil a leading cause of war. Between one-quarter and one-half of interstate wars since 1973 have been connected to one or more oil-related causal mechanisms. No other commodity has had such an impact on international security.
Topic:
Conflict Resolution, Foreign Policy, International Trade and Finance, Oil, and War
Political Geography:
United States, Middle East, and Arabia

115. Why Growth Is Getting Harder

Author:
Brink Lindsey
Publication Date:
10-2013
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
For over a century, the trend line for the long-term growth of the U.S. economy has held remarkably steady. Notwithstanding huge changes over time in economic, social, and political conditions, growth in real gross domestic product (GDP) per capita has fluctuated fairly closely around an average annual rate of approximately 2 percent. Looking ahead, however, there are strong reasons for doubting that this historic norm can be maintained.
Topic:
Economics, Globalization, International Trade and Finance, Markets, Financial Crisis, and Governance
Political Geography:
United States

116. A Markov Switching Approach to Herding

Author:
Pierre Siklos, Martin T. Bohl, and Arne C. Klein
Publication Date:
12-2013
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
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, and Financial Crisis
Political Geography:
United States and Canada

117. The Illicit Trade Conflict Connection: Insights from U.S. History

Author:
Peter Andreas
Publication Date:
09-2013
Content Type:
Working Paper
Institution:
Watson Institute for International and Public Affairs at Brown University
Abstract:
A great deal of scholarly and policy attention has been given in recent years to the relationship between illicit trade and armed conflict. Much of the focus has been on how violent non-state actors have exploited illicit commerce to fund and sustain rebellion. It is commonly asserted that this is a distinctly post-Cold War phenomenon—even a defining characteristic of so-called "new wars."1 A frequent argument, for example, is that in the absence of formal external sponsorship from the United States or the former Soviet Union, insurgents have increasingly turned to alternative forms of material support. This includes illicit exports dubbed "conflict commodities," such as drugs, timber, ivory, diamonds, and so on. Thus, partly thanks to the campaigns of international NGOs such as Global Witness, diamonds from conflict zones in West Africa have been labeled "blood diamonds" (inspiring a James Bond movie and other major Hollywood productions).
Topic:
Conflict Resolution, Conflict Prevention, Political Violence, Crime, International Trade and Finance, War, and Counterinsurgency
Political Geography:
United States, Soviet Union, and West Africa

118. Crucial Collaborators or Petty Players? The Globalization of R and the Rise of China and India

Author:
Andrew B. Kennedy
Publication Date:
11-2013
Content Type:
Research Paper
Institution:
Center for the Advanced Study of India
Abstract:
In recent decades, research and development has become a key new arena of globalization. Whereas multinational corporations once conducted R primarily in their home countries, it is now often dispersed across multiple locations around the world. Has this process transformed economic ties between the world's dominant state and its would-be rising powers in ways that imply an important power shift? Focusing on China and India's growing collaboration with the U.S., this paper argues that it has not. China and India remain considerably more reliant on the globalization of R than the U.S. does, and this remains a potential source of leverage for Washington. This vulnerability mainly reflects the fact that U.S. R investments in China and India are far more important for these two Asian countries than they are for the U.S. These investments loom larger in the Chinese and Indian innovation systems than they do in their American counterpart, and it is difficult to imagine any country substituting for the U.S. in this regard. In contrast, the U.S. cannot derive a great deal of leverage as a platform for R Both China and India are considerably less dependent on the U.S. in this respect.
Topic:
Development, Economics, Globalization, International Trade and Finance, and Markets
Political Geography:
United States, China, and India

119. Financial Services and the Transatlantic Trade and Investment Partnership

Author:
Karel Lannoo
Publication Date:
11-2013
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
It is still an unresolved question whether a process for financial services regulatory cooperation and convergence will be included in the Transatlantic Trade and Investment Partnership (TTIP).From a n end-user's perspective, it could be argued that its inclusion could be an opportunity not only as regards product choice, but also to improve the consumer or investor protection regulatory environment on both sides of the Atlantic. The inclusion would also be in line with the assessments made by both the EU and the US that the G-20 agenda has been incorporated in local legislation and that both regimes are thus 'equivalent'.
Topic:
Economics, International Trade and Finance, and Markets
Political Geography:
United States and Europe

120. Financial regulation and the G20

Author:
Hugh Jorgensen, Mike Callaghan, Stephen Pickford, Richard Gray, Steven Bardy, Graham Hodges, and Ross Buckley
Publication Date:
07-2013
Content Type:
Working Paper
Institution:
Lowy Institute for International Policy
Abstract:
This issue of the Monitor canvases the role of the G20 in strengthening financial regulation. It contains articles by Hugh Jorgensen (Lowy Institute), Stephen Pickford (Chatham House), Richard Gray (Westpac), myself, Steven Bardy (Australian Securities and Investment Commission), Ross Buckley (University of New South Wales) and Graham Hodges (ANZ). It also includes a summary of the discussion at a regional 'Think 20' seminar recently held at the Lowy Institute.
Topic:
Economics, International Organization, International Trade and Finance, Financial Crisis, and Reform
Political Geography:
United States and Europe