Author Archives: jdingel

Pascal Lamy on PTAs slowing WTO negotiations

I submitted a query for the IHT‘s Q&A with Pascal Lamy, WTO Director-General. It appeared on Thursday:

Q. To what degree have bilateral and regional trade agreements hampered progress in the Doha Round negotiations?

Jonathan Dingel
United States

A. Hello, Jonathan. So far they have not proven a distraction. I can say that all of our members are well and truly focused on the Doha negotiations. But in the back of everyone’s mind is the question of how these agreements will proliferate absent a Doha deal by the end of the year. Bilateral agreements are not in and of themselves a bad thing. But they don’t cover important areas. Trade distorting farm subsidies, for example, will never be covered in a bilateral agreement. Such agreements, furthermore, can create disparate rules which can be confusing to entrepreneurs. Often the poorest countries are left on the sidelines with respect to bilateral negotiations. The bilateral route is open to the US, the European Union, India or China but not for the vast majority of poor countries. Furthermore, developing countries have a limited clout in bilateral negotiations with developed countries. In the WTO by contrast, developing countries have worked together to establish much more powerful platforms from which to negotiate with developed countries. The WTO is a kind of UN for trade but without a security council!

I am not surprised by Mr. Lamy’s reply, as any complaining on his part about distraction due to PTAs would do little to help the WTO negotiations. I agree with his assessment of PTAs’ inability to address a number of vital issues.

Read the full post for answers to questions from other readers.

NBER Grab Bag

Merely skimming the latest NBER abstracts can be very stimulating:

FDI is responsible for much of China’s growth, higher domestic saving rates encourage more FDI, and political risk alters the FDI structure. And while we ought to ditch the body mass index, unfavorable health conditions may not be the root cause of underdevelopment. Plus, measuring trade in services is really tough.

Beware of Chinese FDI Statistics

If you think China receives an amazing amount of foreign direct investment, it’s because you’ve been seeing Chinese statistics. In a pair of posts, Madhukar Shukla points to evidence that China counts capital goods imports as FDI, reports “round-tripping” of money through Hong Kong as foreign investment, and generally doesn’t conform to OECD and IMF standards in this regard.

FDI changes ownership, not location

Interesting paper from 2000 that I encountered today:

In Interpreting Developed Countries’ Foreign Direct Investment (NBER Working Paper No.7810), NBER Research Associate Robert Lipsey suggests that flows of foreign direct investment (FDI) among developed countries, where most FDI occurs, have little to do with the location of production. To a large extent, they are changes in ownership of specific productive assets, presumably from less efficient to more efficient owners and managers. There may be no change in the geographical location of aggregate production or production in a particular industry.

WTO Dispute Settlement Database

I’m developing an interest in the WTO dispute settlement mechanism. Here’s a data set that might help some in their research:

The dataset covers all 311 WTO disputes initiated through the official filing of a Request for Consultations at the WTO, from 1 January 1995 until July 31, 2004, and for these disputes it includes events occurring until February 28, 2005. For these disputes, the dataset covers exhaustively all stages of dispute settlement proceedings, from the moment when consultations are being requested to the eventual implementation of the rulings.

Should I blog while in grad school?

I was at an exciting seminar for the last five days without internet access, but I should have a few interesting items to post about in the near future.

I’m starting an M.Phil. in Economics in the fall. At this point, I plan to continue blogging while in grad school, because I think that it’s complementary to research activities. Studying might reduce my (already light) bogging activity, but I see no reason to give up Trade Diversion entirely. Is anyone aware of grad students that have opined about the value of blogging in comparison to the opportunity costs?

Will TRIPS impede a Doha deal?

Inside U.S. Trade reports that Brazil and India are sponsoring an amendment to the TRIPS agreement to bring it into conformity with the UN Convention on Biological Diversity by requiring disclosure of the origin of inventions derived from biological sources. It’s possible that India might tie this issue to market access in the Doha negotiations.