Suchergebnisse

AbstractThe global community still lacks a regime for sovereign debt restructuring (SDR). However, the recent financial crisis has spawned numerous efforts to fill this glaring gap in global economic governance. At the same time however, there is increasing concern that international investment agreements (IIAs) have already begun to expand their reach into the realm of SDR. Indeed, private investors have attempted to use IIAs to recoup the full value of their bonds in order to circumvent debt restructurings in Argentina and Greece. In this paper we examine the extent to which IIAs are becoming tools for creditors to circumvent debt restructurings and whether new IIAs such as the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership will further advance the ability of creditors to do so. We find that contemporary IIAs are increasingly interpreting sovereign bonds as being under their jurisdiction. Thus, debt restructurings may be increasingly subject to claims filed by holdout creditors wishing to recoup the full value of their bonds through private tribunals under IIAs. That said, we also find that some treaties have begun to provide exceptions for certain types of debt restructurings. While such safeguards are a step in the right direction, they will need to become broader in scope and more widespread in application in order to not interfere with the orderly workout of debt problems in the world economy.

ABSTRACT
Many in the academic community have identified that some trade and investment treaties restrict the ability of nation states to regulate volatile capital flows to prevent and mitigate financial instability. This paper quantifies the variation across preferential and free trade agreements with respect to their policy space for capital flow management measures. With these data we create a composite score of treaty flexibility and examine the collective level of policy space across the global trade regime. We find that the majority of trade treaties leave significant policy space for regulating cross-border finance in the world economy. South-South treaties tend to have the most policy space, whereas North-South and North-North treaties have less. When weighted by the level of gross domestic product (GDP) and incoming foreign investment however, we find that those treaties with the least amount of policy space for capital flow measures represent 65% of world GDP and 48% of global capital flows. What is more, it appears that the global trend is toward treaties without the policy space for appropriate regulation.

AbstractThis paper evaluates the evidence as regards the extent to which trade liberalization has led to a decline in tariff revenue, total tax revenue, government expenditure, and government debt. Conventional theory generally predicts that when tariff losses do occur, they may be recouped through better forms of taxation – though a more sophisticated body of theory suggests otherwise. The empirical evidence is also mixed. Theory driven ex‐ante models of trade liberalization assume that trade agreements are revenue neutral. Ex‐post studies suggest that theory may hold in advanced and upper middle‐income economies. However, the consequences for lower income countries are a matter for concern. The majority of the evidence finds that low income countries lose trade tax revenue and are unable to recoup much of that lost revenue. At a time when fresh bilateral trade and investment treaties are being negotiated and WTO reform is on the global policy agenda, this paper highlights the need to design a treaty regime that enhances the ability of poorer nations to mobilize domestic resources without jeopardizing fiscal and financial stability.