Trade Policy Roundtable

Macro-economic and Financial Aspects of Trade Reform (April 13, 2005)

INTEGRATING developing countries into the world economy is an important aspect of the Doha Round negotiations.  But serious differences are surfacing not only between developed and developing countries but also among the two groups.  They are surfacing over development and preferential treatment in various forms.  Negotiators look as if they are being diverted from the WTO core business, which is trade liberalization, only a small part of development.  The WTO system, a framework of contractual agreements, is about enlarging the size of the pie � not about divvying out shares. 

Many developing countries are resisting the idea of trade liberalization, thereby contributing to the difficulties in making progress in the negotiations as a whole.  Their concerns vary.  Some say they depend heavily on the revenue generated by tariffs.  Others are concerned that the reduction of MFN tariffs by developed countries will result in the erosion of the tariff preferences they enjoy in those countries� markets.  But even where tariffs are not involved, as in the liberalization of trade in services, developing countries are reluctant to engage in market-access negotiations, saying they do not have service providers that would benefit from access to developed-country markets.  

Trade Issues in a Positive-sum Game

Figuring out how these issues can be addressed has been considered recently by, among others, the International Monetary Fund, which has undertaken a great deal of economic analysis of trade policy and related issues � summarized in a Review of Fund Work on Trade, to be published shortly. 

Thus the next meeting of the Institute�s Trade Policy Roundtable will review the macro-economic and financial-stability aspects of trade liberalization and reform in developing countries.  Three senior IMF economists � THOMAS DALSGAARD, UDAIBIR DAS and HANS PETER LANKES � will make brief presentations on fiscal revenue issues, preference erosion and IMF lending facilities that address these kinds of concerns; and, too, on sequencing the liberalization of financial services, prudential regulation and related issues.

On the liberalization of trade in financial services, ROBERT VASTINE, president of the U.S. Coalition of Service Industries, will speak on the prospects for the Doha Round negotiations on trade in services and the interest of developing countries in opening their markets to financial services. 

The meeting will follow the one on October 20 with three World Bank economists speaking on the position of �Developing Countries in the WTO System�.

It is important in integrating developing countries into the world economy, and in achieving a balanced outcome in the Doha Round negotiations, for these issues to be clarified and promoted in public discussion.

The meeting will begin at 10:30 am, continue over lunch and end at 3:00 pm.

Agenda of the Meeting

CHAIRMAN     Harald Malmgren � Chairman of Malmgren O�Donnell Ltd, financial advisers, London and Washington, DC, and President of the Malmgren Group, business consultants, Warrenton, VA;  former Deputy U.S. Trade Representative 

10:30-11:30  Fiscal Consequences for Developing Countries of Liberalizing Trade in Goods

SPEAKER          Thomas Dalsgaard � Senior Economist, Tax Policy Division, Fiscal Affairs Department, International Monetary Fund

DISCUSSANT   Claude Barfield � Coordinator of Trade Policy Studies, American Enterprise Institute 

11:30-12:30  Macro-economic Implications of Preference Erosion and the Expiry of Textile Quotas

SPEAKER        Hans Peter Lankes � Chief, Trade Policy Division, Policy Development and Review Department, International Monetary Fund

DISCUSSANT  Robert Rogowski � Director of Operations, United States International Trade Commission

 12:30-14:00 Luncheon and Address

                   Developing Countries and Liberalizing Trade in Financial Services

SPEAKER        Robert Vastine � President, U.S. Coalition of Service Industries, and Chairman of the Presidential Advisory Committee for International Trade in Services

14:00-15:00  Liberalizing Financial Services and Reforms in Developing Countries

SPEAKER          Udaibir S. Das � Chief, Exchange Regime and Debt & Reserve Management Division, Monetary and Financial Systems Department, International Monetary Fund

DISCUSSANT  Peter Ehrenhaft � Of Counsel, Miller & Chevalier, attorneys-at-law

About the Speakers 

THOMAS DALSGAARD, Senior Economist in the Tax Policy Division of the IMF�s Fiscal Affairs Department since August 2004, was previously head of the Management Secretariat at the Danish Oil and Gas Corporation, Copenhagen (2003-04), having been head of the Tax Policy Division in the Danish Ministry of Finance (2001-03), where he began his career.  In 1998-2001, Dr Dalsgaard was a Senior Economist in the Economics Department at the OECD, Paris. 

UDAIBIR S. DAS is Chief of the IMF�s Exchange Regime and Debt & Reserve Management Division, which he joined in 1996 after eighteen years with the Reserve Bank of India.  Dr Das, a Fulbright-Humphrey scholar, did his graduate studies in India and the United States, where in 1989-91 he was a lecturer in economics at Boston University.  He represents IMF staff in the Basel-based Joint Forum and IAIS and OECD working parties on insurance and pensions. 

HANS PETER LANKES has been Chief of the IMF�s Trade Policy Division since January 2002.  He joined the IMF in early 2001 from the European Bank for Reconstruction and Development, where he was Director of Strategy.  Previously he held positions in the government and academia in Nicaragua and Costa Rica; and also with the German-Thai Chamber of Commerce in Bangkok.  Dr Lankes holds degrees from Freiburg, Grenoble and Harvard (Kennedy School of Government).     

HARALD B. MALMGREN is President of the Malmgren Group, business consultants, Warrenton, and Chairman of Malmgren O�Donnell, London and Washington, DC.  In the early 1970s, as Deputy U.S. Trade Representative, Ambassador Malmgren played a major part in drafting the Trade Act of 1974 � which introduced the concept of �fast track� negotiating authority � and launching the Tokyo Round negotiations. In the Kennedy Round negotiations he was an Assistant U.S. Trade Representative for Agriculture. 

ROBERT VASTINE has been President of the Coalition of Service Industries since 1996; and he is Chairman of the Presidential Advisory Committee for Trade in Services, which works with the Office of the U.S. Trade Representative.  Mr Vastine was earlier President of the Congressional Economic Leadership Institute and for six years was Staff Director of the Senate Republican Conference.  In the Ford Administration he served as Deputy Assistant Secretary of the Treasury for International Trade and Raw Materials Policy

The Cordell Hull Institute�s Trade Policy Roundtable is sponsored by Akin Gump Strauss Hauer & Feld, Arnold & Porter, Hogan & Hartson, Miller & Chevalier, O�Melveny & Myers, Sidley Austin Brown & Wood, Steptoe & Johnson and Wilmer Cutler Pickering Hale & Dorr