John Hancock works at the World Trade Organization in Geneva, Switzerland, where he has served as senior policy advisor to the Director-General, representative to the IMF and World Bank, and head of investment issues. He also coordinated the WTO's Aid-for-Trade initiative, and was secretary of the 2006 Task Force on the subject. Prior to the WTO, Mr. Hancock was senior advisor to Canada's trade minister. He has also been a guest lecturer at Cambridge University, IMD, and the University of St Gallen. He holds a PhD in economic history from Cambridge, and has written and spoken frequently on international issues. Taking Global Trade for Granted
With so many problems facing Roberto Azevedo, the new Brazilian head of the World Trade Organization, it’s easy to overlook his biggest one – the WTO’s success. Trade barriers are historically low, trade rules are working, and world trade continues to expand. How to keep countries engaged in the WTO – and rally enthusiasm for freer global trade – when the job seems mostly done?
The GATT, the WTO’s predecessor, was a response to the economic “failures” of the 1930s – roller-coaster exchange rates, beggar-thy-neighbour trade policies, hostile regional blocs – which did so much to fuel the outbreak of the Second World War. Together with the IMF and the World Bank, the multilateral trading system was based on the idea that a durable world peace could only be constructed on the foundations of an open, integrated, and prosperous world economy. More …
Comment (0)Thick as BRICS
What’s in a name? A great deal, it seems, if you happen to be the BRICS. Until Goldman Sachs coined the acronym back in 2001 to describe emerging Brazil, Russia, India, China and South Africa, these countries had little in common – let alone a common destiny. But they liked the name – and the global attention – so much that it stuck. Now the BRICS leaders are wrapping up their fifth annual summit in Durban, South Africa with the modest goal, according to Russia’s Vladimir Putin, of world leadership. More …
The Mother of All Trade Blocs
An earthquake just hit the world trading system. The proposed U.S.-EU Transatlantic Trade and Investment Partnership unveiled this week is not simply another trade bloc but the mother of all trade blocs – an exclusive alliance representing half the world economy purposely aimed at counter-balancing China and other fast-rising trade powers. The split between the West and the rest that has paralyzed the WTO for more than a decade just burst into the open. More …
1930s Redux?
History may not repeat itself, but the parallels between the world economy in the 1930s and the world economy today are becoming hard to ignore. Then, as now, the world was in the grip of a severe economic downturn and painfully high unemployment. Then, as now, governments tried to restore growth and exports by devaluing their currencies and carving out trade blocs, risking a chain reaction around the world. Then, as now, the system was rudderless, unstable, and insecure – which persuaded countries to protect their own national interests, even at the expense of the collective good. More …
America’s Farcical Decline
Here’s what I would like to know.
How did General John Allen, the highest-ranking U.S. commander in Afghanistan, find time to battle a resurgent Taliban and write 20,000 to 30,000 pages of “flirtatious” emails to a 30-something married mother of three in Florida?
And how did General David Petraeus, the head of the CIA and the most respected general of his generation, manage to juggle “liaising” with the same Florida socialite, conducting an “under the desk” affair with his biographer, and spearheading the global war on terror?
For that matter, how did General Stanley McChrystal, the last discredited supreme U.S. commander in Afghanistan, clear enough time in his schedule to party in Paris with a Rolling Stone reporter while averring that he was “pretty disappointed” with President Barack Obama and even less enamoured with “bite me” Vice-President Joe Biden? More …
With Allies Like These, Who Needs Enemies?
France is meant to be Canada’s ally. Canada came to France’s defence in the two world wars. We were on the same side during the Cold War. We are partners in NATO. Yet, when it comes to the gravest threat facing Canada – Quebec’s separation – France’s new government seems ambivalent, at best. Does this make it a friend or a foe?
French Foreign Affairs Minister Laurent Fabius, meeting with Canadian Foreign Affairs Minister John Baird on Thursday, chose to remain neutral in the re-emerging national unity debate, noting that France has “good relations with Canada,” but that it also has “very good, warm, and friendly relations with Quebec.” Unfortunately, there are some issues on which neutrality is impossible – where opposing positions cannot be held simultaneously. Supporting Canada while also supporting Quebec’s separatist government is one of them. More …
Living in Glass Houses
Minister Baird, the Don Cherry of foreign policy, likes to shoot from the hip. His target this week was the feeble and feckless United Nations, which – he sternly lectured the General Assembly – “must spend less time looking at itself and more time focused on the problems that demand its attention.”
Fair point. But whose fault is that? It’s a convenient fiction that the UN somehow chooses to be ineffective – that it’s a kind of spoiled and bloated world government that refuses to act decisively on genocide, poverty, growth, and the many other pressing global problems demanding solutions. The reality, of course, is that the UN is neither more nor less than its member governments. If it has failed to deliver sufficient “results” – as Baird argues – then the responsibility lies squarely with national governments and their paralyzing inability to get along. More …
The End of Progress?
An idea – as powerful as it is depressing – is gaining traction. It suggests that the U.S.’s current economic malaise is less the result of flawed policies, reckless banks, and too much debt, and more of a deeper and longer-term problem: the slowdown of technological innovation. If true, it has profound implications for the economy, for politics, and for our deeply held belief – and expectation – that progress is inevitable.
Tyler Cowen first floated the idea in The Great Stagnation, which New York Times columnist David Brooks described, with good reason, as the most debated non-fiction book of 2011. Cowen’s thesis is brilliantly simple. Until the mid-1970s, the U.S. economy surged on the power of abundant natural resources, mass education, and revolutionary new technologies: electricity, plastics, automobiles, etc. This fuel is now exhausted, with the result that median U.S. family incomes, which more than doubled between 1947 and 1973, increased by less than a quarter between 1973 and 2004. But our expectations – especially our expectations about government entitlements – have continued to soar. “We have built social and economic institutions on the expectation of a lot of low-hanging fruit,” writes Cowen, “but that fruit is mostly gone.” The U.S.’s debt-burdened economy is the symptom, not the cause, of decades of stagnant growth. More …
The Wrong Trade Agreement
The suspense is over. After months of lobbying, bargaining, and pleading, the U.S. has finally allowed Canada to join its much-hyped Trans-Pacific Partnership (TPP) trade initiative. All that remains now is to figure out why we wanted in in the first place.
The main argument is that a “high standard” TPP agreement will expand Canada’s access to a $20-trillion Asia-Pacific market. This is not especially convincing. Canada already has NAFTA with the U.S. and Mexico, which make up the lion’s share of the TPP. There are also bilateral agreements with Chile and Peru, and a deal in the pipeline with Singapore. How much more free access can yet another free trade agreement provide? Sure, the TPP also includes Brunei, Vietnam, Malaysia, Australia, and New Zealand, but while these economies are not irrelevant to Canada’s trade interests, they are not particularly relevant to them, either. The problem is that the TPP covers the Asia-Pacific countries where Canada already has free trade or doesn’t much need it, but not the giant markets, especially China and India, where we need it most. More …
Rage Against the Machine
Voters in France have spoken. Their clear message is one of anger and disillusionment with mainstream democratic parties. After the first round of the presidential election on Sunday, listless support for Francois Hollande, the Socialist candidate, and President Nicolas Sarkozy, the Gaullist, barely reached 55 per cent – while one in five French voters cast ballots for the extreme right, nearly double the 2007 total, and one in nine for the extreme left.
France is hardly unique in this respect. Across the western world, voters are deserting the centre ground of politics for fringe parties and populist movements. The rise of the Tea Party in the United States, the resurgence of Scottish nationalism, even the surprise ascent of Canada’s perennial also-rans, the NDP, all reflect voters’ deep desire for “change” – any change – and an even deeper contempt for politicians, parties and, in some cases, government itself. More …
