Wednesday, October 4, 2006
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The quickest way to dynamite the WTO out of existence
The Center for Global Development's Lawrence MacDonald blogs about Joe Stiglitz's new idea to
Nobel laureate Joseph Stiglitz urged at a CGD event that U.S. trade partners ask the WTO for authority to impose countervailing duties on exports of U.S. steel and other energy-intensive products that benefit unfairly from Washington’s refusal to join the Kyoto Protocol limiting carbon and other greenhouse gasses....For a full transcript of Stiglitz's talk, click here. For an article-length treatment by Stiglitz, click here.
Stiglitz's proposal probably would improve the global warming situation -- but not the way he thinks. Assuming the WTO Appellate Body was willing to destroy itself, here is the chain of events that would improve the environment:
1) The WTO rules against the U.S.A.;I'm thinking that there are better ways to solve the global warming problem.
This, by the way, is one of the basic problem I find with the parts of Making Globalization Work that I've read. There is a decent diagnosis of some of the ills caused by globalization -- but for a man who spent the past decade and a half in policymaking circles, he seems oddly oblivious to the massive political externalities many of his proposals would create.
UPDATE: My colleague Joel Trachtman explains why Stiglitz's plan is a legal non-starter.
ANOTHER UPDATE: Greg Mankiw critiques another of Stiglitz's policy prescriptions.posted by Dan on 10.04.06 at 10:22 AM
So, expect Canadian, American, Japanese, and European trade officials to file suit in the WTO over every "hidden subsidy" under the sun. Expect the target of a lot of these suits to be China?
And India, as well as every other 'developing' nation exempt from Kyoto.
If not complying with Kyoto is a 'hidden subsidy' in the US, why wouldn't it be a 'hidden subsidy' in the countries not exempt from Kyoto?
Furthermore... why wouldn't the state health-care systems in, say, european countries be a 'hidden subsidy' that would give them an advantage over firms located in countries without similar state health-care systems?
How did someone this ignorant win a nobel?posted by: rosignol on 10.04.06 at 10:22 AM [permalink]
Mr. Stiglitz may know economics, but he doesn't seem to know much about law. The Stiglitz argument may pass the laugh test, but there's about a 95% chance it will lose on the legal merits (and even allowing for the 5%, the Appellate Body is not stupid enough to go along with it).posted by: WTO Lawyer on 10.04.06 at 10:22 AM [permalink]
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