Information Security Culture - PowerPoint PPT Presentation

1 / 63
About This Presentation
Title:

Information Security Culture

Description:

Organisation of this part of the course. Factual overview of the world trading system. ... Launched in 2001 to much fanfare included a 'development mandate. ... – PowerPoint PPT presentation

Number of Views:29
Avg rating:3.0/5.0
Slides: 64
Provided by: stephani157
Category:

less

Transcript and Presenter's Notes

Title: Information Security Culture


1

Part One International Trade And Its
Regulation Implications for Managers. Prof.
Simon J. Evenett www.evenett.com 25 November 2005
2
Organisation of this part of the course
  • Factual overview of the world trading system.
  • Why do nations trade?
  • Three simple principles of trade policy.
  • How do firms use the WTO and its rules?
  • Service sector reform and the WTO.

3
What is the world trading system and how has it
changed in recent years?
4
Defining terms World trading system
  • Misnomer
  • World
  • Should not connote equal participation by all
    nations.
  • Trading
  • Should not be taken to mean just trade in goods
    and services FDI and migration are important
    too.
  • System
  • Should not be taken to mean that there is some
    overarching mechanism or group of people that
    control all of these commercial transactions or
    state-to-state interactions.

5
Exports by region in 2004
6
Export growth since 2000
7
Export growth of selected regional trading areas
since 2000
8
World export growth has been much faster than GDP
growth
9
Exports of commercial services is now 20 percent
of total exports
10
Parts and components trade has grown much faster
than final goods
11
FDI inflows 1995-2004
12
FDI stocks 1980-2004
13
FDI and domestic capital formation (investment)
14
Most inward FDI is MA, not Greenfield FDI
15
Foreign born workers in OECD nations 1998 and 2003
16
Remittances are often larger than aid receipts
17
Explanations for the factual record Why do
nations trade? And what are they trading more
than ever?
18
Why do nations trade?
  • Principle of Comparative Advantage (Ricardo).
  • Sources of comparative advantage
  • Technological/productivity differences.
  • Factor endownment differences.
  • Capital rich north and labour abundant south.
  • Differences in tastes.
  • Product differentiation (Krugman, Helpman.)
  • Influence of policies.

19
Why is trade growing so fast?
  • Death of Distance including
  • Falling international transportation costs.
  • Ease of communication.
  • Recent doubts on the importance of these factors.
  • Reductions in trade barriers.
  • Types of trade barriers tariffs, quotas, etc.
  • Type of trade reform unilateral, regional,
    multilateral.
  • Relative importance 2/3 policy 1/3 other
    factors.
  • Interaction between technology and trade barriers.

20
Tariffs on industrial products in wealthy
countries are generally low
21
But more favourable access cannot be taken for
granted!
22
Antidumping cases 1995 June 2005
23
Lower tariffs etc are good for business, but are
they smart politics?
  • Not always.
  • Countries tend not to liberalise unilaterally.
    Why?
  • Concentrated pain and diffuse benefits.
  • When countries liberalise together export
    interests can be galvanised too.
  • Explains why we see so many bilateral and
    regional trade agreements, like NAFTA, EU.

24
But why do all major governments come together to
liberalise?
  • Because regional and bilateral agreements
    introduce discrimination against excluded firms.
  • Multilateral agreements provide greater
    certainty.
  • Any benefit extended to one country must be
    extended to all.
  • Most Favoured Nation principle.
  • WTO is the forum where multilateral trade
    agreements are negotiated and enforced.
  • More on the WTO later.

25
Growth in international migration
  • Greater information flows and impact on
    aspirations.
  • Large cohorts of younger people in the developing
    world.
  • Falling cost of international travel.
  • Increased premium on skill in industrialised
    world.
  • Greater education opportunities in industrialised
    world.
  • Aging populations in industrialised world.

26
Growth in FDI
  • Death of distance.
  • Rise of export platforms.
  • Rise of international outsourcing which, in turn,
    reflects
  • Falling trade barriers.
  • Greater ability to enforce contracts with
    suppliers.
  • Changes in management thinking.
  • Substantial liberalisation of inward FDI regimes.
  • Less aversion to foreign takeovers etc.
  • Privatisation and deregulation reforms.

27
More nations are liberalising rules on foreign
investment
28
Three Simple Principles of Trade Policy.
  • Here the reading by Douglas Irwin is relevant.

29
What is trade policy?
  • Set of policy measures that a customs territory
    or nation uses to discriminate against goods as
    they cross the border.
  • Discrimination against imports (or protection).
  • Tariffs, quotas, tariff-quotas, anti-dumping
    orders.
  • Discrimination against exports.
  • Export taxes.
  • Discrimination in favour of exports.
  • Export subsidies.

30
Principle 1 A tax on imports is a tax on exports
  • Consult Irwins short book for these principles.
  • Nations export to pay for their imports.
  • Domestic consumers can be supplied directly or
    indirectly. Both methods require resources.
  • Market forces and allowing international trade
    selects the most efficient method.
  • Lerner Symmetry.
  • A nations own tariffs damage its export
    interests. Why?

31
Principle 2 Businesses are consumers too.
  • It is well known that personal consumers gain
    from reductions in tariffs on the goods they
    import.
  • What is less well appreciated is that firms
    import lots of goods too.
  • The prices firms pay for imports directly affects
    their costs and competitiveness.
  • International production networks.
  • Incentives created for firms to lobby.
  • Structure of protection tariff escalation.

32
Principle 3 Trade imbalances reflect capital
flows.
  • Balance of payments includes
  • Current account,
  • Capital account, and
  • A small balancing terms.
  • In gross terms capital account transactions are
    much larger than current account transactions.
  • Capital account drives the current account.
  • What drives the capital flows? Perceived
    differences in returns on financial assets.

33
Three fallacies of import protection.
  • Reverse these three principles to understand why
    the following statements are fallacies
  • Tariffs affect imports not export
    competitiveness.
  • Tariffs protect industries and save jobs.
  • Higher tariffs can reduce the trade deficit.
  • These arguments apply not just to tariffs but to
    other forms of protection (quotas, antidumping
    orders, etc.)

34
Recap what have we learnt so far?
  • Factual record on trade flows, FDI, and
    associated policy reforms.
  • Why nations trade.
  • Why nations liberalise trade together.
  • Three principles of trade policyor three
    fallacies about import protection.
  • Next we add some firm based specificity.

35
How do firms use the WTO and its rules?
  • Here the case studies on the course outline are
    relevant.

36
Setting the scene
  • Four ways in which firms enter foreign markets
  • Direct exporting of goods and services.
  • Establish subsidiary in a foreign market
    (including joint ventures.)
  • Licensing foreign firms to produce.
  • Temporary movement of employees to foreign
    customers.
  • Long standing discrimination against foreign
    suppliers.

37
The WTO
  • Established on 1 January 1995.
  • Membershipgovernments only.
  • Funding.
  • Inter-governmental not supra-national.
  • Home to 4 main agreements GATT, GATS, TRIPs, and
    DSU. (Get used to the acronyms!!)
  • Negotiate agreements in rounds.
  • Enforce agreements through dispute settlement.
  • See the ITC reading for further details.

38
Four basic rules of the WTO
  • Protection of domestic industry is through
    tariffsban on quantitative restrictions on
    trade.
  • Binding of tariffs.
  • Most Favoured Nation (MFN) treatmentban on
    discrimination among foreign suppliers.
  • National Treatmentban on discrimination against
    foreign goods once they enter the domestic
    commerce of a country.
  • Other rules relate to subsidies, temporary
    measures to help domestic industries, and
    treatment of intellectual property and investment.

39
What stake does business have in the WTO?
  • Think of a simple form of international commerce
    importing a part or component.
  • What could go wrong and how do WTO rules prevent
    or reduce the risks of engaging in international
    trade?
  • Assurance that no quota prevents importation.
  • Certainty over tariff treatment.
  • Protection on customs valuation.
  • Protection against discriminatory internal taxes
    and regulations once customs is passed.
  • What are the corresponding benefits to exporters?

40
Update on the Doha Round.
  • Launched in 2001 to much fanfareincluded a
    development mandate.
  • Envisaged negotiations on a wide range of areas
    agriculture, manufactues, services, and other
    rules.
  • Agricultural negotiations have proved to be a
    sticking point agreement to eliminate export
    subsidies but market access negotiations very
    difficult.
  • Stalemate in November 2005. Everything held up by
    agricultural negotiations.
  • Hong Kong Ministerial Meeting in December 2005.
  • When will this round be concluded?

41
How informed businesses use the WTO
42
Blocking Chinas WTO Accession AIG
  • The interest of a single U.S. company, insurance
    giant AIG, was stopping a final agreement on
    China's WTO membership. Washington Post, 1
    October 2001.
  • AIGs wholly-owned subsidiary in China.
  • What WTO accession would mean for competition to
    AIG.
  • What subsequently happened.

43
How informed businesses use the WTO
44
Using trade rules for commercial advantage key
factors
  • Influence of firm over national trade
    policymaking.
  • Necessary? If so, means and extent?
  • Mix of firm-control versus official-control over
    key decisions.
  • Initiation and termination.
  • Threats and payoffs.
  • Conflicts with national foreign policy goals.
  • Access to best legal expertise.

45
Wrapping UpTrade policy and inter-firm rivalry
  • Firms operating abroador fighting foreign
    competitionhave a clear interest in manipulating
    trade policies to their advantage.
  • There are four levers that influential firms
    can and do pull.
  • Remember rivals have access to these leverscalls
    for defensive planning too.
  • Many factors determine the effectiveness of a
    strategy based in part on trade policy.

46
Service sector reform and the WTO
  • Here the Mattoo paper is relevant.

47
Preliminaries
  • Why is the trade perspective on service sector
    reform potentially important?
  • Ongoing Doha round negotiations.
  • European Services Directive.
  • Other regional trade negotiations.

48
Preliminaries
  • What are the characteristics of services?
  • Intangible.
  • Invisible.
  • Perishable.
  • Requiring simultaneous production and
    consumption.
  • Exceptions to these characteristics.
  • In what ways, if at all, do they differ from
    goods?

49
Which policies affect service sector trade?
50
The gains from services trade the case of legal
services
51
Economics of reducing discrimination against
foreign service sector firms
  • Depends very much on the nature of the
    liberalisation.
  • Lowering of a price-based measure.
  • Allowing more entry to occur.
  • Interactions with public service obligations.
  • Substitution across modes of supply as well as
    between domestic and foreign firms.
  • Presence of asymmetries of information can have
    non-price-based effects.
  • Financial stability and allowing in foreign banks.

52
General Agreement on Trade in Services (GATS)
  • Negotiated in the Uruguay Round.
  • Main points
  • Different in structure from GATT.
  • At best provides a framework for future
    liberalisation of service sectors at the WTO.
  • Yet multilateral trade negotiations have yielded
    little liberalisation to datecodification of
    unilateral reforms.
  • Even so, GATS and the principles underlying it
    have defined how many countries structure their
    own domestic reform initiatives.

53
Structure of General Agreement on Trade in
Services (GATS)
  • Contains a set of general rules on national
    treatment and market access.
  • Contains sector-specific commitments from each
    WTO member
  • Including a non-exclusive list of measures, some
    of which can be discriminatory.
  • For each sector and for each mode of supply, a
    nation specifies in its schedule one of four
    categories.
  • Commitments can come into effect at some point in
    the future.

54
Market Access commitments under the GATSstill
plenty to do.
55
National Treatment commitments under the GATSa
little better.
56
Complicating factors
  • MFN principle and regional trading agreements.
  • Relationship between the GATS and domestic
    regulation
  • Regulation can be motivated on social and
    efficiency grounds as well as by protectionism.
  • GATS affirms that liberalisation need not imply
    deregulation.
  • Difficulties in writing rules that distinguish
    between these motives raising possible
    encroachment of national sovereignty.
  • Necessity test use the least distortive
    instrument.

57
Example of the GATS-domestic regulation
interface Telecommunications sector
  • Two important regulatory matters
  • Universal service provisions.
  • Access to network technologies.
  • Could regulations on these matters have a
    discriminatory effect?
  • What would the necessity test say here?
  • Alternatives to current regulations.
  • (Non-binding) telecoms reference paper.

58
Chinas accession to the WTO Implications for
service sector firms.
  • China joined the WTO on 11 December 2001.
  • Accession negotiations differ from negotiations
    during trade rounds.
  • Existing WTO members have strong leverage.
  • In service sector this often amounted to haggling
    over the number of licenses to be granted to a
    trading partners service sector firms.
  • China made substantial commitments to open her
    service sector markets, see next tables.

59
Chinas Market Access commitments exceed other
poor WTO members
60
The same is true for Chinas National Treatment
commitments.
61
Chinas WTO commitments in the telecoms sector
  • Unclear commitments on mode 1 (cross-border
    supply.)
  • No commitments on mode 2 (consumption abroad).
  • On mode 3
  • Mobile voice and data service providers face
    restrictions on geographic coverage of operations
    (until 2006) and on equity shares (less than 49
    by 2004).
  • Similar restrictions apply to fixed line
    providers.

62
Lessons for firms from Chinas WTO accession
  • The window of opportunity presented by Chinas
    WTO accession is now closed.
  • China appears to be very reluctant to make any
    more concessions in this areahas implications
    for her role in current WTO trade negotiations.
  • There is a real premium for firms on following
    closely these issues at the WTO.
  • Implications for Russian WTO accession
    negotiations.

63
Wrap up on service sector reform and trade
negotiations.
  • To date the main WTO agreement on service sector
    trade has not led to many new commercial
    opportunitiesyet it has help protect overseas
    service operations.
  • But WTO accessions provide important windows of
    opportunity to gain licenses and more favourable
    treatment.
  • Regional trade negotiations provide another
    vechile for securing greater market access.
  • Variety of regulations affecting service sector
    suggest that securing market access is not
    enoughsecuring national treatment is very
    important but very sensitive.
  • Harmonisation and mutual recognition of internal
    regulations become very important in this context.
Write a Comment
User Comments (0)
About PowerShow.com