GOLD STANDARD: YES OR NO?

Well, before answering this question, let me start by confessing something. This question has been on my mind for a while now; and to be honest, for me, there has never been a second of doubt with regards to the answer to this. Thus, there was no need for a debate or an article about the question. But, considering the number of papers and commentaries from economists, businesses, politicians and civil society organisations, calling for or rejecting the idea of a return to a Gold Standard system, I felt the need to write something.

Should we start with some fundamentals? Okay.

The Gold Standard is a monetary system in which the standard economic unit of account is a fixed weight of gold. Under this system, paper notes are convertible into pre-set fixed quantities of gold; any issuance/creation of money is counterbalanced and guaranteed by gold reserves. Parity between two different currencies is therefore set through gold and the exchange rates are stable if not fixed between them.

This definition leads immediately to some questions:

First of all, who would decide on the weight of gold that would be allocated to currencies? Would the weight depend upon the current monetary strength of each country’s economy? What would determine the monetary strength or simply the strength of an economy? Would it be its ability to repay debts, its growth rate or the trust placed in its currency by international investors? Would the current quantity of a currency including treasury bonds (issued to pay debts) count towards determining the strength of an economy? Would all currencies be convertible into gold? If no, which currencies would be convertible and based on what criteria? If under the Gold Exchange Standard started in1922, only the U.S. Dollar and the British Pound were convertible into gold and other currencies were pegged to them, could this be the case today with new currencies such as the Euro and emerging economies such as China?

If there are so many questions raised with a potential Gold Standard system, why are some “famous” people calling for its return?

I must acknowledge that there are some advantages with such a system taking place. For instance, the Gold Standard would limit the power of governments in issuing fiat currency through central banks without counterpart in the real economy (quantitative easing, anyone?). The ultimate effect of financing debt through bond issues is to destabilise other economies who buy debt without gold collateral.

The Gold Standard also tends to reduce uncertainty in international trade by providing a fixed pattern of international exchange rates. Indeed, under a Gold Standard, disturbances in price levels in one country would be partly or wholly offset by an automatic balance-of-payment adjustment mechanism called the “price specie flow mechanism.”

Let’s take the example of a country with a negative balance of trade. Gold would flow out of that country in the amount that the value of imports exceeds the value of exports. This would mean reduction in the money supply in that country since the creation of money would be indexed to the quantity of gold held by the central bank. This fall in money supply would in turn, generate the drop in prices of products in that country. The lower prices would cause exports to increase and imports to decrease, which will improve the balance of trade. Inversely in countries with positive balance of trade.

Having said that, the idea of going back to the Gold Standard does sound really rustic to me owing to the high speed and complexity of today’s monetary and financial transactions around the world. Under such a system based on pre-determined, fixed exchange rates between currencies, there would be a need to review these fixed parities between gold and currencies every time that there would be a significant fluctuation on commodity, stock, financial or monetary markets. Furthermore, if a country decided unilaterally to devalue its currency, it would produce sharper changes on a global scale than the smooth declines seen in fiat currencies since the exchange rates are fixed. How? As its currency would become cheaper to obtain with less gold, economic agents would rather acquire it and later exchange it at the same exchange rate for a more powerful currency.

Also, in such a system where coins, paper notes, electronic funds and any other form of money are automatically convertible into pre-set fixed quantities of gold, what would happen if a country like China calls in all their debts including treasury bonds owed by western countries to be repaid immediately in gold?  With the vast quantity of dollars worldwide laying claims to the U.S. Treasury, an overnight transition to gold convertibility would certainly create a major discontinuity for the U.S. financial system.

People might respond that there is no need for the whole block of current dollar obligations to become an immediate claim. Well, no comment!!!

What about the bilateral debt owed by developing countries to developed nations? Would this be claimed in gold?

Finally, the idea of a Gold Standard could be suicidal for emerging economies. You would probably ask why?

Let’s have a look.

Indisputably, emerging or developing economies need to spend in order to finance their growth and their development. Most economists would also agree that when a country creates a budget deficit designed for public investment (infrastructure, education, basic research or public health), such a deficit is bearable, beneficial and even necessary in the case of emerging economies. Therefore, restricting these economies to spend in proportion to the quantity of gold produced would be anything but understandable. Indeed, budget deficit can help emerging nations to stimulate their economies by creating a market for business output, creating income and encouraging increases in consumer spending, which creates further increases in the demand for business output. As a consequence, the real GDP of the country raises and the unemployment rate decreases, leading to more tax income for the government.

The restrictions of gold convertibility could therefore profoundly jeopardise the development of some emerging economies.

I can hear some Gold Standard advocate voices responding that, they are not referring to the previous or old “Gold Standard”. Instead, they are referring to a new “fractional reserve system”, under which the gold reserve will indirectly affect the amount of currency circulated in countries and around the world.
Well, during economic crises like the current one, the “fractional reserve system” could meet the currency supply in countries such as U.S.A and E.U., and would not hinder the development of their economy. However, for emerging economies, the lack of gold reserve would not meet the monetary supply of rapid economic development.
But above all, being under a more traditional Gold Standard or a so called new modern one, developing countries, particularly those without enough gold, would have to purchase gold with their foreign exchange reserves. In that way, U.S. and Euro-zone could decide to withdraw dollars and Euros in order to protect their leading positions in international financial system.

To conclude this paper, and for those who have not yet noticed it, to the question on “Gold Standard: yes or no?” my answer is without doubt no. However, I must admit that the current global financial system, which predominately relies on the U.S. Dollar as a reserve currency by which major transactions such as the price of gold itself are measured, must change. Especially as U.S.A do not issue their currency with proper real economic counterpart.

But instead of going back to a strict Gold Standard system, the idea of having a more diversified reserve currency system based on market baskets of currencies or commodities including gold would be more sensible.

OUI OU NON A L’ETALON-OR?

Veuillez vous référer à la version anglaise pour le moment.

http://lambertmbela.wordpress.com/2010/01/02/gold-standard-yes-or-no/



1960 – 2010 : 50 ANS D’INDEPENDANCE, L’HEURE DES BILANS ET DES RESOLUTIONS.

Alors, les bilans ! J’aurai plutôt tendance à parler des résolutions ou encore peut être de ce qui devrait se faire pour que les choses aillent mieux. Car faire les bilans de ces 50 ans d’indépendance risquerait me plonger dans un afro-pessimisme dont je ne partage pas toujours la philosophie.

Alors on va essayer de rester positif et élaborer plutôt des propositions quant à l’avenir.

Le point qui retient le plus mon attention est celui du bilan politico-économique notamment sur un modèle de développement et ou d’organisation propre au continent.

Dans un article que j’ai publié en Mai 2009 (http://lambertmbela.wordpress.com/2009/05/03/fmi-bm-ue-et-les-economies-africaines-de-nouveaux-paradigmes-de-developpement/) j’explore la nécessite d’un paradigme de développent qui, à contrario des doctrines FMIennes et de la BM, serait plutôt un modèle “hybride” de gouvernance. Un modèle qui jumellerait un service public assaini et protecteur du citoyen, et un secteur privé consistant financé directement (via la bourse) par de capitaux nationaux et étrangers.

A mon avis, après 50 ans d’échec à la fois des institutions internationales et de nos dirigeants qui par ailleurs, non seulement manquent de vision et d’amour pour leur nation et peuple, mais aussi et surtout sont davantage motivés par leurs intérêts personnels. Vous me diriez que ce n’est pas nouveau et vous avez raison.

A mon avis donc, il serait temps pour le continent -du moins l’Afrique francophone- de se redéfinir tant sur le plan politique que sur celui économique; de repenser la façon dont elle se vend et elle passe des contrats avec le reste du monde; de réévaluer ses atouts et comment ceux ci pourraient peser sur les relations internationales. Je pense notamment aux matières premières comme le cacao dont la Côte d’Ivoire, le Ghana, le Nigeria et le Cameroun, respectivement 1^ier, 2^ème, 4^ème et 6^ème producteurs mondiaux (60 % de la production mondiale). Ces pays pourraient se regrouper afin de peser et d’influencer en leur faveur sur le prix international du cacao. Dans le même ordre d’idées, après 50 ans d’Etat-nations, il serait peut être aussi temps de comprendre qu’avec plus de 50 pays, l’idée des Etats Unis d’Afrique ou Union africaine (c’est comme vous voulez) en un seul coup est assez platonicienne voire utopiste pour un continent où la fibre et l’orgueil nationalistes restent encore un fond de commerce assez productif pour les chefs d’Etats. A mon avis, une intégration sur des bases économiques/commerciales serait salutaire et davantage catalytique d’une Afrique unie. Comme pour le cas précédent du Cacao, Le Nigeria, l’Algérie, l’Angola et d’autres producteurs de pétrole sur le continent pourraient pareillement former une entité purement africaine ; s’entendre sur la gestion globale du pétrole africain en termes de quantité et d’offre afin de peser sur et d’influencer le marché international en leur faveur. De même pour les pays producteurs de mines ou de céréales. De tels regroupements constitueraient de bases solides pour ce rêve des Etats Unis d’Afrique qui nous est cher à tous. L Union européenne n’aurait-elle pas commencé avec une certaine Communauté européenne du charbon et de l’acier (CECA) en1951 avec juste six pays?

Le second point que j’aimerais aborder est celui du bilan purement économique ou mieux encore du bilan des entreprises et des affaires. J’entends parler de « désillusion » dans les articles de la presse internationale. Moi j’irai plus loin et je parlerai plutôt de rétrogression dont seuls les chefs d’Etat africains ont le secret. En effet, comment expliquer qu’au moment où nous en avons le plus besoin, que les “Banques De Développement” créées au lendemain des indépendances aient Presque toutes disparues? Je ne voudrais surtout pas  revenir sur le comment elles ont été gérées, ou par qui, ou encore que sont devenus leurs dirigeants etc etc. N’en rajoutons pas à un bilan déjà assez amer comme ça!!! Où sont passés les “Crédits Agricoles” destinées au financement de l’économie? J’oublie les sociétés nationales de transport urbain qui, créées pour servir le peuple et faciliter les mouvements des biens et personnes, se sont retrouvées au service des Présidents et de leurs familles, des ministres et de leurs protégés, des DGs et de leurs acolytes… je m’arrête là la liste est bien longue. Ce qui donne lieu aujourd’hui à d’énormes bouchons de part et d’autre des artères des grandes villes sur le continent avec à la clé des accidents de route liés au transport de fortune…

Sans vouloir tomber dans un afro pessimisme -chose que je dénonce, reconnaissons tout de même que ces 50 années d’indépendance ressemble davantage à une régression que même à un statut-quo. Même si personnellement je reste positif et crois fort au progrès de ce continent que je porte cher au Cœur.

The Copenhagen Climate Conference: The Trap To Avoid…

The UN climate conference that will be hosted in Copenhagen Denmark this month Dec7 – Dec18 plans to deliver a new climate treaty to replace the Kyoto Protocol. Kyoto Protocol which, by the way, The US, who shares with China the position of the largest emitter of greenhouse gases, signed but did not ratify.

With this Copenhagen summit, along with the turnaround of Washington on the topic, it is becoming clearer that climate change is indisputably the issue of the century. However, I have some reservations about this climate conference with regards to the question of who should normally “pay the price”.

If it is unquestionable that climate change would have a serious impact on both developed & developing nations (for example, recently, two studies were undertaken on the impact of climate changes on China and other major crop producers. The research showed that the world’s number one emitter of greenhouse gases will experience unstable weather and a dramatic drop in major crop production in the future. Furthermore, the Chinese grain production is likely to drop ten percent when temperatures rise by one degree Celsius. The rice growing period of China will generally shorten by seven to eight days if temperature rises one degree Celsius. And, according to Zheng Guoguang, head of the China Meteorological Administration, in an article published on an agency’s website, this will lower the quality of rice, and if the current grain production mechanism does not change up to 2030, the production potential of crop farming will drop between five to 30 percent). However, coming back to the point I was making before the brackets, the notion that emerging economies should somehow be part at the same pace & level of responsibility in the greenhouse gas emission reduction seems unfair to me. Why? Because it is important to remember that developed economies for more than three centuries now have been damaging the ecosystem with their industrialisation that was not in any way low carbon oriented.

Therefore, asking developing or emerging economies to slow their development process in order to pay the price of the damage caused by developed nations is just absurd to me. Especially since the richest nation in the world, which is also one the largest emitter of greenhouse gases nations, namely US, did not show until recently any will of reducing their carbon emission. It is only lately that the White House revealed that President Obama, who will attend the Copenhagen conference, would pledge to reduce US emissions by 17 percent from 2005 levels by 2020, and that the US would continue that downward path over the following 10 years to reach a 41 percent reduction.

Here is the problem: The richest nation, the nation that caused the damage in the first place and currently one of the greatest emitter would “pledge” to reduce only by 17% by 2020; whereas the UN is pressing developing countries to lower their emissions growth by 15 to 30 % from business as usual, according to the authoritative UN Intergovernmental Panel on Climate Change. Well, no comment…

The World Wildlife Fund declared recently that the US pledge for 2020 translated from 4 to 5 percent below the commonly accepted benchmark year of 1990. “It certainly doesn’t bring us closer to that range of emission reduction levels that we need to see,” said Kim Carstensen, WWF’s climate change director.

Also, the EU environment Commissioner Stavros Dimas said: “The aggregate offers from developed countries still fall well short of the level of ambition needed, so I urge those countries with weak targets to improve them,”

Please judge for yourself…

As usual, in such circumstances, these international institutions always try to make things look fair for everybody and that they are there for developing countries too. In a statement issued lately, UN’s top climate negotiator said: “We can get an agreement that specifies financial support to developing countries”. In other words, financial support to help developing countries adapt to green technology would also be part of the treaty. Good! But wait a minute; does anybody remember the pledge to commit 0.7% of rich-countries’ gross national product (GNP) to Official Development Assistance? Can anybody tell me how many of these rich countries have met that commitment so far? Please not this time… promise, promise, enough is enough!

Rich countries should take their responsibility and “pay the price” of their reckless industrialisation methods. Not that emerging economies should not take part in this, ultimately this is a worldwide issue. But there is no way developed economies should expect emerging economies such as Brazil, South Africa or India not to maximise the use of their capacities and therefore jeopardise their own development while trying to respect the so called “Climate Change Treaty” which is in some respect boycotted by some rich nations. This is what I call “the trap of de-growth” that developing countries must avoid.

Conférence Sur Le Climat A Copenhague : Le Piège A Eviter …

La 15^e Conférence des Nations Unies sur le climat aura donc lieu la semaine prochaine du 7 au 18 décembre 2009 à Copenhague. Au centre des débats, finaliser les négociations en vue d’élargir la convention sur les changements climatiques et conclure le nouvel accord sur le climat qui succédera de fait au Protocole de Kyoto, Protocole de Kyoto par ailleurs signé mais pas ratifié par la puissance la plus polluante, les Etats Unis.

S’il est indéniable que le changement climatique est plus que jamais le sujet du siècle et que ses conséquences auront de sérieux impacts aussi bien sur les économies riches que sur celles émergentes, j’ai tout de même quelques réserves en ce qui concerne les responsabilités des uns et des autres et le prix que chacun devrait payer pour lutter contre ce fléau universel.

Mes réserves sont notamment relatives au piège de la « décroissance » dans lequel pourrait tomber les économies émergentes. En effet, les économies dites riches ont pendant plus de trois siècles endommagé l’écosystème avec non seulement l’exploitation abusive des ressources naturelles tant dans le Nord que dans le Sud, mais aussi avec de massifs programmes d’industrialisation basés sur des modèles  polluants qui ont par ailleurs concouru  à leur essor. Alors, il me semble injuste de la part de ces économies riches de demander aujourd’hui aux économies émergentes de participer à la même hauteur et au même rythme au « paiement de l’addition » pour des dégâts qu’elles (riches) ont causés. Surtout que la plus riche d’entre elles et par ailleurs l’une des plus pollueuses (USA) ne montrait aucune volonté jusqu’à très récemment de réduire ses émissions de gaz à effet de serre. Pour sauver la face, Washington a annoncé dans un communiqué que le président Obama promettra lors de la conférence que son pays fera des efforts de réduire à hauteur de 17 % (seulement) à l’horizon 2020 par rapport au niveau de 2005 ses émissions de CO₂ ; alors que les Nations Unies pressent les économies émergentes à réduire leurs émissions de 15 à 30 %. De qui se moque-t-on ?

A mon avis, les économies riches devraient prendre leurs responsabilités et surtout qu’elles ne viennent pas nous tenir des discours de promesses d’aides ou transfert de technologie afin d’aider les économies émergentes à s’adapter au vert et à compenser le manque à gagner que cet effort pourrait causer. En passant, où en est-on avec la promesse des 0,7 % du PNB destiné à l’aide au développement ? Combien de pays riches ont jusqu’ici tenu à cet engagement ?

En conclusion, non pas que les économies émergentes doivent se mettre à l’écart du débat, de toute façon elles en souffriront des conséquences puisque le mal est global. Plutôt, le fond de ma pensée est que ces économies (émergentes) doivent rester vigilantes et faire attention au piège de la décroissance dans lequel les économies dites riches pourraient les entrainer.

Surtout ne pas baisser la garde !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Is The Free Market Era Over?

Are we moving back to the Keynesian economic approach with all these bailouts around the world, or should we define a new paradigm for economics after the world financial crisis has demonstrated the limits of the free market with its invisible hand?

The failure of economists, businesses and politics to predict and manage the recent catastrophic crash of the world’s financial system has triggered a re-evaluation of the whole basis of current economic theories.

Since the end of the 20th century, economics has been dominated by the classical paradigm based on notions of rational consumers making rational choices in a simple supply/demand world of finite resources, with prices constrained by decreasing returns; all driving the economy to an optimal equilibrium point.

So far, this classical economic approach, initially conceived by Adam Smith, has been working well. Indeed, in normal circumstances people are generally rational. The market automatically allocates resources and controls excesses in an optimum way with minimum oversight or outside regulation required. Under this model, the economy has been working as an equilibrium system; a system that moves from one equilibrium point to another, driven by shocks from external disruptions – technological, political, cultural etc- but always coming to rest in a natural equilibrium state.

But in extreme or complex circumstances, people and the system tend to behave/react differently including consumers, banks, financial institutions, stock market traders and governments. And perhaps the most critically flawed assumption of this classical model has been that economic agents are generally rational. Whereas, we observed recently insolvent households taking mortgages that they could not afford, banks lending to insolvent households without conditions etc. leading us to the subprime crisis …we know the result.

From this flawed assumption, the following question is raised: is it the theory that should be questioned or is it one of its hypotheses (namely the rationality)? Some would argue that questioning the hypothesis is questioning the theory. Anyway…

To tackle this current crisis, Some voices have been suggesting more regulations as this would frame the rationality of economic agents and force them to behave in a more sensible way; some others have been calling for more government intervention in order to set rules and monitor  the whole system (with a big bailout here and there when necessary).

Wait a minute, if I am not mistaken, this would mean going back to the Keynesian approach of economics?

Indeed, according to Keynes, Excesses or deficiencies in aggregate demand are the rule and not the exception. Therefore, for Keynes, government intervention is needed to eliminate recessionary and inflationary gaps: laissez faire, laissez passer policies should be replaced with an active interventionist policy by the central government.  Keynesians believe that monetary and especially fiscal policies are required; otherwise disasters like the Great Depression that followed the First World War or the crisis that we are facing now would certainly reoccur.

There we are! Was Keynes right? Or should I say, is Keynes right?

Not so sure. If the Keynesian prescription for active government involvement in the economy was warranted after the World War I, in the past few decades, government intervention has become less desirable…and some argue, less necessary. Indeed, since the World War II, we have experienced six decades of growing competition. The once oligopolistic market structures in autos, telecommunications, services, etc. have become very competitive, and government policies increasingly have impact across borders. Furthermore, nowadays, banks, financial institutions, manufacturers, energy suppliers are increasingly internationally managed; following Keynesian policies with their fundamentally collectivist, centralized approach would just lead to more trouble. For instance, if a multinational that has networks over the world is centrally managed in the way Keynes suggests, the collapse of one element of the network in one country would easily make the whole system topple like dominoes around the world as we have just experienced.

In short, if the Keynesian approach was likely to work after the First World War, the crash that we are facing now is far more serious than the Great Depression of 1929 as it can not be contained within borders or so easily solved by mass bailout, mass lending or big government investments/ job creation programs.

The need of an evolutionary or new economic model…

Instead of going back to the Lord Keynes School of thought, maybe we should rather think of a new model that would fit with the globalisation of markets, and that would -to some extent- set some global regulations to frame agent behaviours around the world, but ultimately leave the market free.

This new paradigm should be based on the principle that economies, markets, regulations, globalisation, as well as the internet (a new and very important component), consumers, enterprises and the brain all form complex adaptive systems in which agents dynamically and rationally interact, process information and adapt their behaviour to a constantly changing environment- but always reach a final equilibrium.

In this new model, and unlike the strict distinction between the too much and the too little government approach, the market should rather be a combination of an “invisible hand” and necessary regulatory elements (government that would not impede competition and risk) with the mindset that the market is henceforth a small village that needs to adapt to the constantly changing global environment.

To conclude this paper, I strongly believe that free market still has a future, and markets are still perfectly self-regulating systems. They are only becoming enormously complex adaptive networks – too complex and interdependent for economists and governments to control or even understand.

Ultimately, every individual/company is continually exerting himself to find out the most advantageous employment for whatever capital he / it can command. Therefore, by pursuing our own interest we benefit society more than when we directly attempt to benefit society. According to Adam Smith, we are all led by an “invisible hand” to benefit society even as our intent is to benefit ourselves.

Invisible Hand Theory proposed by Adam Smith in the 18th century, really helps to explain how the market economy works even with its chaotic nature.

Personally, I view the Invisible Hand theory as the economic counterpart of democratic theory. Just as, in a democracy, people are supposed to choose the best leaders for themselves, the Invisible Hand theory presumes that people chose to produce and consume in the most efficient manner when given a free hand.

So in practice, markets may still end up being little bit chaotic due to the irrationality of agents or inadequate information shared within the system, but that is not because the Invisible Hand theory or the free market model is inaccurate.

« Pourquoi Je Crois Aux Progrès de l’Afrique »

« Pourquoi je crois aux progrès de l’Afrique »
Ces propos ne sont pas de moi mais du président de l’Association des Banques Centrales africaines et gouverneur de la Banque Centrale de la RDC, Mr Jean-Claude Masangu Mulongo qui vient de publier chez Hachette son dernier livre intitulé ″pourquoi je crois aux progrès de l’Afrique″. Mr Mulongo qui travaille aussi actuellement à la création d’une Banque Centrale et d’une monnaie commune à l’échelle de l’Afrique, se donne pour cela l’horizon 2021.
Il faut dire que je suis particulièrement admirateur de cet optimisme de monsieur le président de l’ABCA …mais entre nous, revenons un tout petit peu sur terre là. Est-ce que le terrain y est propice? Est-ce que les économies du continent ont atteint un niveau de convergence suffisamment avancé ? Bon…arrêtons avec les questions. Encourageons tout simplement le courage et l’optimisme de ce gouverneur qui a quand même, par les mesures qu’il a prises, permis le passage du ″zaïre″ au ″franc congolais″ en RDC. Mais qui a surtout fait baisser de manière drastique l’inflation dans son pays, elle est passée de 500% à 10%. C’est un exploit même si le franc congolais n’est pas convertible.
Au moins un leader africain qui nous rappelle la belle époque des Kwame Nkrumah, Patrice Emery Lumumba, Sékou Touré etc. des figures qui nous ont fait rêver…aujourd’hui Mr Masangu Mulongo pourrait apparaitre aux yeux des cyniques comme un déconnecté de l’économie réelle. Pourtant il peint juste l’image d’une Afrique qui croit à son éveil et qui se tient débout pour braver tous les obstacles au progrès. Alors, soutenons-le !

Civil Society Organisations: The Game-changer?

It was reported last week that civil society engagement in the World Bank operations has been evolving from being institutionally based to being more issue oriented.

Indeed, increasingly, civil society organisations that have been interacting with the World Bank seem to have shifted their advocacy stance from a do-no-harm to a do-good approach that seeks to influence the World Bank to further adopt socially and environmentally sustainable development approaches.

So, what has been the real contribution of these civil society organisations?

Coming soon…still thinking

WTO: A Global Trade Regulator or A Secret Weapon for Rich Countries?

It was revealed on September 14^th by the French Press Agency (AFP) that, China has lodged a complaint against US excessive tariffs on Chinese tyres at the World Trade Organisation.

According to Washington, these tariffs aim at preserving American companies and they would be spread over three years: 35 percent in the first year, 30 percent in the second and 25 percent in the third.

In a statement issued by the Chinese commerce ministry, Beijing describes these measures as protective and as a clear violation of WTO rules, undermining the early recovery of the world economy.

Without surprise, at least from my side, and as usual, the WTO issued a statement giving Beijing and Washington 60 days to hold bilateral consultations on the issue. If it is not resolved at the end of the period, the WTO will rule on the issue.

Obviously, the issue would not be resolved after the 60 days and the WTO litigation committee would appoint, naturally, a special group to rule on the issue. As usual, sanctions would be taken against USA, and as usual the USA would ignore them.

Can anybody tell me what happened to the WTO sanctions against Europeans and Americans over cotton subsidies? What about the sanctions against Europeans for abusive tariffs on Chinese textile?

It seems to me that, the WTO with its philosophy of globalisation such as free trade amongst member states, reduction/annulation of tariffs in developing countries to help these last integrate into the global trade etc. It seems to me that, the WTO is only there to help rich countries evacuate their products “free of tariffs” to developing countries (never the other way around), and to give hope to developing countries that, one day they would be part of the world trade if they keep on following the so called free trade. Well done!!!

So, is this the regulation of the world trade?

OMC: Régulateur du commerce international ou alors arme secrète des pays dits riches?

Il a été rapporté par l’AFP le 14 septembre 2009, que la Chine avait déposé une plainte officielle contre les Etats-Unis auprès de l’Organisation Mondiale du Commerce (OMC). Pékin jugeant ″abusive″ l’imposition par Washington de droits de douane supplémentaires sur ses importations de pneus chinois.

Comme l’expliquait un communiqué de Pékin, le président américain Barack Obama aurait signé un décret imposant des droits de douane supplémentaires sur toutes les importations de pneus pour véhicules de tourisme et véhicules légers en provenance de Chine pour une période de trois ans afin de préserver les entreprises américaines. Ces droits s’élèveraient à 35% la première année, 30% la deuxième et 25% la troisième.

La chine considère donc que ces nouvelles mesures américaines constituent des “pratiques abusives” qui vont “contre les règles” du commerce international.

Ce qui du coup m’amène à me poser la question suivante: ne sont ils pas ces mêmes américains qui prônant le libre échange et le commerce international, encouragent la chute des barrières douanières notamment dans les pays dits en voie de développement afin de faciliter l’intégration de ces derniers dans les échanges mondiaux?

Bon, ils me diront, faites ce que je vous demande de faire et non ce que je fais! Bon, no comment…

Sans surprise, du moins de ma part, Dame OMC, comme d’habitude, dans un communiqué, a reconnu que la crise économique actuelle et surtout la menace grandissante du chômage dans les pays développés, maintenaient très présente la tentation protectionniste. Appelant donc les pays du G20 à “rester vigilants” face à cette menace qui risque de ralentir la reprise économique. Puis le bla bla habituel énonçant les règles de l’OMC, pour finir avec la fameuse formule des consultations entre les deux parties qui, si elles échouent au bout de 60 jours, conduiront l’organe de règlement des différends de l’OMC à constituer un groupe spécial chargé de statuer.
Et bien sûr, comme de coutume, le dit groupe spécial produira un autre rapport détaillant les sanctions contre les Etats-Unis; lesquelles sanctions seront (et on commence à s’y habituer) balayées du revers de la main par la puissance “soucieuse” du développement des pays pauvres.  “Soucieuse”, du moins à en croire son nouveau président, Obama.

Quelqu’un pourrait –il me dire ce que sont devenues les sanctions de l’OMC contre les subventions européennes et américaines de leurs cotonculteurs? Ou encore de l’affaire des droits de douane européens abusifs sur le textile chinois ?

C’est à se demander si l’OMC n’est pas là  pour imposer ses règles de mondialisation et de libre échange (baisse et annulation des droits de douanes) dans les pays pauvres, afin de favoriser l’écoulement des produits du Nord vers le Sud ; et surtout pas l’inverse!

Alors, OMC, régulateur du commerce international ou arme secrète des pays dits riches?

A vous de juger!