Currently browsing posts in the category ‘Economics’

Realizing Layers of Security in Haiti: A Conceptual Re-Think is Needed if Haiti is to Find Post-Earthquake Peace

Articles in this week’s New York Times and Globe and Mail highlighted calls for a massive scaling-up of disaster relief and development efforts in Haiti. However, leaders should be much more critical about the shortfalls of such missions in the past, as Haiti is no stranger to international interventions, in particular at the hands of the United Nations and the US government, and to a lesser extent, Canada. As security is often held to underpin relief and development efforts, policymakers need to reform their view of the provision of physical security and international law needs to reflect this process. Time and time again, Western powers have failed to assist the Haitian people address the wrongs of the past and meet their overall social and economic development goals.[1]

Sadly, it has become commonplace for developed nations to make big pledges when tragedies occur, but seldom are all funds collected to drive development strategies. Only 10% of funds pledged to Haiti after the January 2010 earthquake have arrived in Port au Prince thus far. Core funding is often lumped into ‘security programs’, while so-called ‘soft development’ strategies languish. Soft development aid dollars are often tied up in the activities of foreign NGOs. The amount of NGOs in Haiti is staggering. The presence of so many foreign personnel, who are often unaccountable to the Haitian government or people as a whole, is troubling and potentially destabilizing.…

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Anarchists Engage with G20 Issues

A great deal of attention has been paid recently to the preparation for the G20 summit next weekend in Toronto. But while the event has been a boon for the troubled artificial lake industry, not everyone will be so pleased with the assembled world leaders. From labour unions to environmentalists to indigenous rights groups, protestors are expected in the thousands. The greatest security concern however, remains the kind of anti-capitalism and anarchist groups which made the Seattle WTO summit of 1999 so memorable. The same kind will be in attendance during the Toronto summit; the Southern Ontario Anarchist Resistance (SOAR) and FFFC Ottawa, which was responsible for the firebombing of an Ottawa bank after hours on May 18th, have both announced they’ll be at the event.

Yet Mike Bakunin, who recently left SOAR to establish a sister branch in Rivière Ouest (Manitoba) with a more awesome acronym, claims that these groups don’t just advocate violence. “For those who think that anarchists are just about chaos and firebombing, that’s not the case. Groups like FFFC Ottawa give the rest of us a bad name – we can actually engage with the issues as well as anyone. Now obviously the summit will be focusing on economic and financial matters, so we think that we can best get our message across if we zero in on those issues as well. It’s hard to convey…

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April 8, 2010
BY Larissa Smith

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Economics
Investment
Taxation

Taxing Banks for Risky Investments

As governments around the world broke open their piggy banks to bail out most of major financial institutions, it comes as no surprise that these governments are feeling a bit strapped for cash. In looking for a way to recoup capital spent on these institutions because of their risky investment practices, a popular proposal is the taxing of banks for such risky investments.

Numbers that the Americans are debating include a levy at 0.15% for 10 years on all financial institutions with more than $50 billion in consolidated assets.

With Germany and England ready to take action and implement similar levies, and with Obama seeking to push the US to do the same, it’s unclear what kind of overall effect these levies would have on banking if they are carried out on a piecemeal, domestic basis. These financial institutions are international in character. Their activities transcend national borders, and thus any attempt at regulation will need to account for the cross-border transactions and international nature of the institutions. Will domestic regulation really solve the inherent problem of big banks making big investments without thinking about the potentially big (and devastating) consequences?  Probably not.  So then what’s the point?

Edwin M. Truman, Senior Fellow at the Peterson Institution for International Economics in Washington, proposes a different analysis. He says, “There are two dimensions — paying for the past and paying for the future.”  Instead of…

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The true nature of BITs (at least as I see it…)

On February 19-20 a conference which dealt with recent developments in the field of international investment law took place at Sydney University.[1] About sixty speakers from all around the world gathered for two intensive days of exchanging ideas, debating pressing issues and discussing what seems to be an emerging sub-field of international law. One important trend that was highly emphasised during this conference was the recognition that international investment law is far more public in nature than it was considered to be in the past. The effects of foreign investment on public interests such as the environment, human rights and labour standards are now obvious and the tension between the protection of investments on the one hand, and the governments’ interests in regulating these sensitive fields on the other, is often emphasised in academic writings and arbitration awards.

The conceptual change that international investment law seems to have gone  through has not however reached one very fundamental point. To my great surprise, speakers continually repeated the same old mantra concerning the main objective of investment treaties: the objective of investment treaties, so it was argued, is the protection of investors. This, I would argue, carries the same amount of logic as claiming that the objective of preparing a salad is cutting tomatoes. While it is true that Bilateral Investment Treaties (BITs) are designed to provide a protective and stabile environment for investors,…

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Power, Politics, and the Adoption of the Agreement on Trade Related Aspects of Intellectual Property (TRIPS)

Intellectual Property Watch (IP Watch) recently reported that discussions of the World Intellectual Property Organization’s (WIPO) Standing Committee on the Law of Patents (SCP) broke down due to disagreement between developed and developing countries.[i] This is but a current example of the ongoing conflict between developed and developing countries over international patent law. The recent origins of this conflict stem from adoption of the Agreement on Trade Related Aspects of Intellectual Property (TRIPS) of the World Trade Organization (WTO) in 1994. Under TRIPs, the approximately 150 member states of the WTO committed to adopt, inter alia, global minimum standards for intellectual property (IP) laws.

TRIPS has been controversial from the start. Developing countries and advocates for the ‘intellectual commons’ are of the view that TRIPS jeopardizes developing country access to knowledge and essential medicines that are critical to their well-being and growth.[ii] In contrast, some developed countries, in particular the US, are of the view that TRIPS did not go far or fast enough in establishing a global IP regime: the US is pushing developing countries to accept standards that go further than TRIPS in the bilateral and regional free trade agreements that have flourished as WTO negotiations have stalled.[iii]

The developing countries have legitimate concerns. They are net technology importers and must thus establish and maintain IP systems which will be of little benefit to them in the short term, while reducing their…

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The ideological battle between Google and the People’s Republic of China

Two weeks ago, Google publicly opposed the Chinese government by declaring that it would no longer censor its online services in China. It made this announcement shortly after a cyber-attack targeted the Google email accounts of Chinese dissidents, an attack which reports suggest may have originated from the Chinese government. Google went so far as to threaten to leave China if the government does not relax its internet censorship laws, sparking an angry response.

This latest crisis in Sino-Google relations has taken on international significance beyond just the opening of another front in the ongoing trade disputes between China and the United States, and it represents more than just the latest development in the long-lasting ideological clash between the Chinese government and western internet service providers Google, Yahoo, and Microsoft. And while this isn’t the first time an American corporation has sought to impose its will on a foreign government, this may be the first such standoff that has an ideological or public international law dimension to it. Among other things, it prompted US Secretary of State Hillary Clinton to declare last week that the United States intends to advance “internet freedom” at the United Nations.

One interesting question that comes out of this is whether corporations of Google’s stature will be able to shape the policies of state actors in much the same manner as they can those of industry players. For…

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A Primer to Economic Regional Integration in Africa

“Africa could rightly be described as the major theatre of contemporary cases of shared sovereignty.”[1]

It is the hope of many African leaders that greater cohesion in African trade will lead to more firm patterns of national development. Formalizing the international trade sector within Africa could lead to greater national tax revenues, a freer exchange of ideas, labour and technology across borders, the stabilization of regional agricultural and natural resource markets, and greater cooperation over shared infrastructure projects such as the creation of highways, waterways development, and even the deployment of green technology such as wind energy projects.[2]

While more flamboyant African leaders such as Muammar Gaddafi stress the need for pan-African unity (Gaddafi even calling for a United States of Africa), smaller regional unification bodies are already active. Most Westerners might be surprised that much of West Africa, the nations of the Economic Community of West African States (ECOWAS), already has a unified currency between fifteen nations. Since its creation by treaty in 1993, ECOWAS trade commissioners from a diverse array of fields attempt to integrate trans-national policies on social affairs, water resources, energy, and security matters. Just as NATO intervenes in foreign conflicts, when civil unrest unfolds in member states, such as recently in Guinea, ECOWAS applies strong diplomatic and military pressure to uphold the rule of law.

The East African Community (EAC) was first launched in 1967, but was then…

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Who needs a written constitution?

We in Canada tend to think of our Constitution, most notably the 1982 Canadian Charter of Rights and Freedoms, as a distinct source of national pride. Indeed, the importance of the Charter cannot be overstated – it has had far-reaching international influence as a model of constitutional reform, for example helping to shape the post-Apartheid South African constitution, the New Zealand Bill of Rights Act, and the UK Human Rights Act;[1] moreover Canadian Charter cases are “routinely referred to in most of the Commonwealth.”[2]

One of the most important functions of a written constitution is the entrenchment of certain human rights which are recognized as universal and not subject to the whims of the legislature; as such, the Canadian Charter was also an important step, as it broke with the British tradition of parliamentary supremacy by giving broad powers of judicial review to the courts, and granted even broader rights than did the US Bill of Rights (though this is partly balanced by the fact that Charter rights are subject to the notwithstanding clause).

One might worry, then, about the protection of human rights in countries that do not have written constitutions. Most notably, the UK has no formal written constitution, but instead relies on conventions and common law principles to fill in the gaps of statute law. Many such principles, written or unwritten, as well as certain statutes and treaties, have been granted constitutional force.[3] Through…

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Global financial tax – taxation in the next generation?

The hot topic on the minds of world leaders is the potential for a global tax on financial transactions.  The idea seems to have emerged from the French, who saw the tax as a potential way to generate financial development aid. The tax would be a form of Tobin tax, although instead of being at stabilization of a currency, the primary goal would be to raise international funds to deal with crises.

The idea was subsequently picked up by UK PM Gordon Brown and presented to the G20 at their meeting in St Andrews, Scotland on Nov 7th.  Brown presented the tax as an instrument to fund future bank bailouts.  Moreover, he sees the tax as increasing accountability in the financial sector.   However, the idea was not received as well as had been hoped.  The USA has rejected the idea, and Canadian Finance Minister Jim Flaherty also came out against the tax.

While things looked dismal for the tax proposal following the G20, it seems that at least as far as the US is concerned, the idea in principle may still be kicking around Congress.  U.S. House of Representatives Speaker Nancy Pelosi has spoken out in favor of a similar proposal, affectionately named the Wall Street tax, from which funds would be used for job-creating legislation sought to be passed in December.  The Democratic proposals are citing nearly a $150 billion per…

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International Competition Regime: New Game. New Rules?

In a recent judgment given by the Australian Federal Court, Singapore Airlines Ltd v Australian Competition and Consumer Commission ([2009] FCAFC 136 (2 October 2009)), once again the tension between increasingly globalised commercial practices on the one hand and domestic antitrust laws on the other is becoming evident. The Australian Court was required to decide whether the alleged unlawful price fixing which took place in the international markets – outside of the physical boundaries of Australia – violated Australian antitrust laws, and if so, whether the parties could be prosecuted by Australian authorities.

The Australian Court decided that international anti-competitive activity which takes place wholly outside of Australia may still influence the Australian market, and thus Australian law may possibly apply. It should be noted that this approach is by no means unique or new, as other domestic antitrust authorities are empowered by law to prosecute international anti-competitive activity.[1] But when examining the above-mentioned tension between the two conflicting forces, domestic regulation and an international problem, a more complex picture is revealed.

On the one hand, it is true that due to the lack of an international governing body or antitrust prosecution authority, the Australian authorities do not have much choice but to try and regulate international anti-competitive activity which affects Australian markets.  On the other hand, such an approach is not without consequences. Leaving the prosecution of international anti-competitive conduct to local antitrust…

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