Selected for the Global Economic Symposium 2009

Selected for the Global Economic Symposium 2009

After a long period of successful unilateral and multilateral dismantling of protectionism, the current crisis appears to herald the beginning of new restrictions on international trade. Industrialised countries have begun to subsidise their national champions and risk the breakup of cross-border value added chains.

Emerging markets and developing countries have started to raise border charges which they have not bound multilaterally and subsidise their exports. Other trade-impeding measures find new compatriots. Both free mobility of capital as well as free labour movement are at risk. Retaliatory spirals can no longer be dismissed as unrealistic once politicians defend national companies on national territories in order to help national workers.

How can the race to offer subsidies they offer be contained? Is an OECD code of rules the appropriate response following the examples of other policy areas? Should multilateral trading rules against export subsidies and, conversely, export restrictions be sharpened and, if so, how? Are there better measures available against unfair trading practices than countervailing measures and anti-dumping tariffs which are now increasingly enforced? Can more flexibility on labour markets, including new models of task-oriented learning, be helpful in dampening the sector-specific supply and demand shocks for workers? And should domestic adjustment measures not focus on protecting the income-generating potential of workers rather than the production of specific products?

Selected for the Global Economic Symposium 2009

The financial crisis and the resulting global downturn have unwound some of the old global imbalances. For example, U.S. household consumption as a proportion of income has fallen; Chinese government spending relative to GDP has increased. Nevertheless, the economic turmoil may give rise to new patterns of global imbalances.

Governments’ ability and need to provide bank bailouts and fiscal stimulus have often depended on the size of their financial industry and the size of the national debt, rather than on the magnitude of previous global imbalances that required to be corrected. The severity of national recessions, along with the associated changes in trade flows and capital movements, have depended in part on countries’ different degrees of export dependence, energy production capacities and their past financial regulations.

These differences may generate new imbalances between countries with relatively large and relatively small financial sectors, raw-material-producing and raw-material-consuming countries, and relatively open and closed economies.

In the absence of proactive policy responses, what are the new global imbalances likely to be? How should monetary, fiscal, trade, structural and welfare policies of countries around the world respond to the prospect of new imbalances? What exchange rate regimes would be useful to prevent the new imbalances from arising?

Selected for the Global Economic Symposium 2009

To promote the creation and dissemination of knowledge in a globalizing world, public finance of R&D and the patent system must be helped work together. The traditional public finance provision of knowledge is often inhibited by financial restrictions. The traditional patent system, on the other hand, may restrict the flow of knowledge and thereby impede economic growth in developed and less developed countries.

In this context, intermediate institutional regimes – such as open source technology, general public licenses, soft patents, public private partnerships and private philanthropy – have come to play an increasingly important role.

What is the appropriate legal and institutional environment to generate the most productive and equitable combinations of these regimes?

What set of concerted international regulations is likely to create enough room for country and sector specific solutions, while giving special attention to the needs of SMEs and less developed countries?

What is the desirable division of labor between basic research funded by governments and applied research funded by business? How can private philanthropy be strengthened, in order to bridge gaps between needs and capacities for research and development? Should the width and duration of patents be restricted? What is the desirable role of guarantee funds (like AMC) equipped by governments or by sponsors, that frame well-defined research objectives, and guarantee for the future returns to it? Should compulsory licensing of patented productions, in matters of life and death, be introduced to allow free access for poor countries?

Selected for the Global Economic Symposium 2009

How can the international trading system be brought back onto its past successful track? By making the actual levels of liberalization binding and anchoring non-discrimination everywhere in the system or by striving for a low level of trade barriers? How can the system be strengthened against emerging threats of protectionism?

Do we need a pause in today’s liberalization talks and instead concentrate on agreeing on formulas for future liberalization and – even more important – on simple formulas for exceptions from WTO principles? What is the right balance between regionalism and multilateralism? Do reforms require compensation of losers inside the system or outside?

What are the problems that businesses in the current international trading system and how can these problems be alleviated within the existing institutional system?

Selected for the Global Economic Symposium 2009

Globalization has made the world interconnected as it has never been heretofore. The dangers of this interconnectedness are becoming increasingly obvious in the face of the financial crisis of 2008, the dangers of climate change, the breakdown of the Doha Round on international trade, the threat of nuclear proliferation, the multifaceted risks of terrorism, the looming ethnic and religious conflicts, and more. Nevertheless most policy decisions in these areas continue to be made on a national level.

How can the world community break out of this trap of failed multilateralism? To what degree does the interrelatedness of the global problems require interrelated governance institutions? What new international institutions are required to rectify the existing world governance gaps? What changes in existing institutions are called for? How can global governance structures be accommodated to the new geopolitical realities? How can these governance structures be reconciled with national sovereignty? What general policy guide lines are useful for the reform of national and international governance, so that the major global challenges can be addressed efficiently and fairly? What is the role of business and civil society organizations in this process of policy reform?