Sunday, April 23, 2006
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An interesting weekend for global economic governance
The Financial Times has a few stories on the ups and downs of global economic negotiations. Negotiations about trade barriers appear to be going in one direction, while negotiations about global imbalances seem to be going forward.
Pascal Lamy, director-general of the World Trade Organisation, will on Monday ask WTO members to work for a crucial deal on farm and industrial goods by early summer, after key trading powers acknowledged their self-imposed April 30 deadline was out of reach.On the other hand, the spring meeting of the IMF and World Bank seems to have produced a small breakthrough, according to Chris Giles and Krishna Guha:
Leading countries secured a breakthrough in the governance of the global economy at the weekend, transforming the role of the International Monetary Fund and putting it at the centre of a more co-operative effort to resolve trade imbalances.Click on this companion story by Giles and Guha, which seems devoted to explaining why the deal is so great.
I need to look into the nature of the agreement a bit longer, but to indicate the daunting nature of what's involved here, consider this paragraph from the IMF communiqué:
Following the discussion at the Global Imbalances Conference held at the IMF on April 21, the Committee confirms that the agreed policy strategy to address imbalances remains valid. Key elements include raising national saving in the United States—with measures to reduce the budget deficit and spur private saving; implementing structural reforms to sustain growth potential and boost domestic demand in the euro area and several other countries; further structural reforms, including fiscal consolidation, in Japan; allowing greater exchange rate flexibility in a number of surplus countries in emerging Asia; and promoting efficient absorption of higher oil revenues in oil-exporting countries with strong macroeconomic policies. Given economic interlinkages, all countries and regions will have a role to play by increasing the flexibility of their economies and adapting to changing global demand patterns.Accomplishing this kind of integrated policy outcome will require
posted by Dan on 04.23.06 at 09:08 PM
I would call it a major miracle.posted by: dave on 04.23.06 at 09:08 PM [permalink]
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