IBT News Blog

This article discusses the recent attempts to fix problems with the Thai economy and their successfulness. See http://www.ft.com/cms/s/0/360d9c86-e6b6-11dc-b5c3-0000779fd2ac,noOfParas=2,emailFormat=plainText,storyType=ultralight,dwp_uuid=7f5f6b12-2f66-11da-8b51-00000e2511c8,print=no,_i_email=y.html

This article highlights the potential impact of the proposed non-domiciliary tax in the UK on London's status as the world's premier financial center. See http://www.ft.com/cms/s/0/c16c119c-e646-11dc-8398-0000779fd2ac,noOfParas=2,emailFormat=plainText,storyType=ultralight,dwp_uuid=34c8a8a6-2f7b-11da-8b51-00000e2511c8,print=no,_i_email=y.html

New economic figures from Spain and Italy have driven down prospects for economic growth in the Eurozone area. See http://www.ft.com/cms/s/0/66c7bd24-e6b7-11dc-b5c3-0000779fd2ac,noOfParas=2,emailFormat=plainText,storyType=ultralight,dwp_uuid=bd2f85d2-8e90-11db-a7b2-0000779e2340,print=no,_i_email=y.html

This article discusses the impact of the US housing market decline on a UK hedge fund. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7270389.stm

In a further development on the sovereign wealth fund topic, Dubai has issued a warning to the EU regarding its regulatory practices. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7271007.stm

This article discusses the involvement of Chinese economic actors in the Tibetan railway project. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7268877.stm

This article discusses the Indian budget, including provisions for farmer debt relief. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7270361.stm

On Feb. 17, 2008, Kosovo declared its official independence from Serbia. Since that time, many issues have arisen in the context of the ability of Kosovo to declare independence as a matter of international law. This article discusses a previously unaddressed issue - the economic severance necessary to complete Kosovar independence. See http://www.iht.com/articles/ap/2008/02/28/europe/EU-GEN-Serbia-Kosovo-Independence.php

This article presents an interesting discussion of the impact of gold prices on traditional gift-giving to children in Korea. In a larger context, what do the issues raised in the article suggest about the impact of globalized markets on traditional practices? See http://www.iht.com/articles/2008/02/28/asia/gold.php

Despite other economic issues, the German jobless rate for February, 2008 fell. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7268514.stm

This article presents various views on important issues to various portions of Indian business and society in advance of the new Indian budget release. What do the issues raised in this article say about the impact of globalization on emerging economies such as the Indian economy? See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7267656.stm

This article discusses Russian state investment in creating new defense industry products, such as fighter planes. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7266853.stm

The EU is currently investigating whether the German government provided economic support to two German banks in violation of EU laws on state aid. What does this say about the balance of domestic and regional priorities within the EU and its member states? Is state aid to a struggling industry, especially one as vital to a national economy as a bank, a bad thing? Why or why not? See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7268678.stm

The Japanese government has released figures indicating that its factory production rates declined in January, 2008. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7268312.stm

New figures from the Department of Commerce indicate that the US economy declined more in 2007 than previously thought. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7269132.stm

Yesterday, the Chairman of the Federal Reserve Bank indicated that further interest rate cuts may occur in the future to protect the US economy from inflation. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7267393.stm

This article discusses the anticipated benefits of globalization per se on the EU. See http://www.ft.com/cms/s/0/133e5e68-e5f1-11dc-8398-0000779fd2ac,noOfParas=2,emailFormat=plainText,storyType=ultralight,print=no,dwp_uuid=abb716b0-2f7a-11da-8b51-00000e2511c8,_i_email=y.html

Brazil has just replaced China as the leader of the emerging markets index. See http://www.ft.com/cms/s/0/14a643e4-e63a-11dc-8398-0000779fd2ac,noOfParas=2,emailFormat=plainText,storyType=ultralight,dwp_uuid=8fa2c9cc-2f77-11da-8b51-00000e2511c8,print=no,_i_email=y.html

This article discusses today's announcement by E.On, a German energy producer, that it will sell a portion of its operation in order to comply with increasing EU attempts to create more competition in the energy market. How does this fit with the idea of protectionism on a national and regional level? What are the implications for the trade of intangibles like energy within and without the EU? See http://www.iht.com/articles/2008/02/28/business/power.php

This article discusses US pressure on the IMF to engage in internal reforms in order to remain functional and legitimate. See http://www.ft.com/cms/s/0/8ba0ddbe-e3ed-11dc-8799-0000779fd2ac,noOfParas=2,emailFormat=plainText,storyType=ultralight,dwp_uuid=abb716b0-2f7a-11da-8b51-00000e2511c8,print=no,_i_email=y.html

During the recent conflict in the Democratic Republic of the Congo, minerals - especially diamonds - played a negative role in funding rebel and government forces charged with human rights violations. Interestingly, the DRC is now turning to minerals and mining licenses to provide revenue for the country and its recovery from the war. See http://www.ft.com/cms/s/0/7e103396-e3d6-11dc-8799-0000779fd2ac,noOfParas=2,emailFormat=plainText,storyType=ultralight,dwp_uuid=a99ba554-4d15-11da-ba44-0000779e2340,print=no,_i_email=y.html

The Saudi government has announced that it will stop producing wheat in 2016 because of water supply issues in the kingdom generally. What are the implications of this type of decisions in a global marketplace where the commidity in question is steadily increasing in value? Should this be a governmental decision or a purely market-based decision? See http://www.ft.com/cms/s/0/f02c1e94-e4d6-11dc-a495-0000779fd2ac,noOfParas=2,emailFormat=plainText,storyType=ultralight,print=no,dwp_uuid=fc3334c0-2f7a-11da-8b51-00000e2511c8,_i_email=y.html

This article discusses the recent spike in inflation rates in Vietnam. See http://www.ft.com/cms/s/0/c14a62b4-e505-11dc-9334-0000779fd2ac,noOfParas=2,emailFormat=plainText,storyType=ultralight,dwp_uuid=7f5f6b12-2f66-11da-8b51-00000e2511c8,print=no,_i_email=y.html

This article discusses the rise in foreign investment in Russia and the relationship of the government to it. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7265036.stm

The EU has just assessed over a billion dollars in fines against Microsoft from anti-competition actions taken by Microsoft in the EU area. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7266629.stm

The Russian Government seems to be making plans that indicate a desire to sell their own in rubles instead of the dollar. http://www.iht.com/articles/2008/02/25/business/place.php

submitted by: KA

While in Jeddah at an investment conference with the Gulf states, Alan Greenspan advised the leaders that Arab inflation would fall "significantly" were the oil producers to drop their dollar pegs, in contradiction to Saudi policy. http://www.financialexpress.com/news/Dropping-dollar-peg-would-ease-Gulf-inflation-Greenspan/277099/

submitted by: KA

As a corollary to our recent class discussions of US court jurisdiction and policy in international trade, this article discusses the way in which US SEC regulations can interfere with trade and commerce involving US investors. See http://www.iht.com/articles/2008/02/26/business/abn.php

In light of the recent issues involving Liechtenstein's status as an international tax shelter, this article discusses other tax havens throughout the world and the ways in which they function and are viewed. See http://www.iht.com/articles/2008/02/26/business/glob27.php

The Bank of England has issued a less than promising economic forecast. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7264803.stm

New information on the US economy demonstrates that the US producer pricing rates for January increased more than expected. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7264984.stm

Today the US dollar reached an all-time low against the Euro. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7265963.stm

In a continuation of previous postings, it appears that the deal struck between the Russian gas entity Gazprom and the Ukraine is now in jeopardy. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7265377.stm

This article provides an interesting discussion of the economic measures recently taken by Hungary to ward off inflation. It also provides an interesting discussion of some economic issues facing Eastern European countries. See http://www.iht.com/articles/2008/02/26/business/forint.php

This article discusses the recent purchase of a well established French vineyard by a Chinese businessman and, more broadly, the impact of globalized access to wine markets on traditional wine producers. See http://www.iht.com/articles/2008/02/26/europe/journal.php

The EU has issued a warning to its member states against taking protectionist legislative acts in regards to sovereign wealth funds because of the potentially damaging effects of such legislation on the EU economy as a whole. See http://www.iht.com/articles/2008/02/25/business/fund.php

This article discusses recent declines in the Spanish economy and the effects of these declines on upcoming elections. See http://www.iht.com/articles/2008/02/25/europe/spain.php

The European Court of Justice has just issued an opinion finding that German did not act illegally in its protection - or lack thereof - of the designation of authenticity for Parmesan cheese from Italy. See http://news.bbc.co.uk/go/em/fr/-/2/hi/europe/7264592.stm

Unexpectedly, recent information suggests that German business confidence rates have risen for February, 2008. See http://news.bbc.co.uk/2/hi/business/7264359.stm

This article discusses the impact of decoupling the Chinese yuan from the American dollar on Chinese exporters. See http://www.iht.com/articles/2008/02/26/business/yuan.php

This article discusses recent statements made by the former Chairman of the Federal Reserve, Alan Greenspan, regarding the US economy and what he sees as the dangers of allowing increased foreign investment in it. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7264135.stm

As a follow-up to an earlier class discussion regarding the role of the US government in defense contracting information transfers involving other states, this article discusses the attempts by the US Defense Secretary to promote various forms of US defense industries in India. See http://news.bbc.co.uk/go/em/fr/-/2/hi/south_asia/7264394.stm

This article discusses the impact of rising oil and gas prices on the middle-class in Persian Gulf states which export oil. See http://www.iht.com/articles/2008/02/24/business/gulf.php

Prices for wheat have continued to increase recently, making for supply-side issues in the international market. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7264239.stm

In a follow-up to a recent post, this article discusses the intensification of international attention on the tax policies of Liechtenstein. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7261830.stm

For a different perspective on the issue and on the state of Liechtenstein itself, see http://www.iht.com/articles/2008/02/24/europe/taxweb.php

This article discusses upcoming economic talks between the EU and China. What are the possible ramifications of the recent WTO decision against China in the auto parts pricing suit brought by the US and the EU on the timing and content of these talks? See http://www.iht.com/articles/2008/02/25/business/trade.php

This article briefly discusses the impact of power shortages in South Africa on a prominent South African gold mining operation, which is among the largest gold mines in the world. It is interesting to consider that, even for commodities which are experiencing record prices on the international market, there are many other factors which can still derail production. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7262483.stm

Former British Prime Minister Tony Blair, most recently associated with the Quartet, an international group seeking to resolve tensions in the Middle East, has agreed to assist Rwanda in promoting its economy. See http://news.bbc.co.uk/go/em/fr/-/2/hi/uk_news/7262082.stm

http://www.economist.com/world/asia/displaystory.cfm?story_id=10566770&CFID=9914703&CFTOKEN=15c79c6e8b1008f-47EAFB6E-B27C-BB00-012BC0DBEB17B3DF

Salty shepherds

This article discusses a dispute concerning whaling in the South Sea. The controversy seems like it is slowly brewing between Australia and Japan. Japan intends to kill 900 minke and 50 fin whales near Antarctica by mid-April for, so called, scientific reasons. Japanese whaling ships, however, have faced substantial protests by anti-whaling groups and the Australian people. What is interesting in this story is that the whaling is taking place in an Australian sanctuary, which is only recognized by only four countries. Even though a court in Australia has ruled against the whaling by Japan, the Prime Minister of Australia, Kevin Rudd, is finding it hard to follow the court. First, there are several other considerations for him before he can pressure Japan. The article mentions a free-trade agreement that is intended to calm Japanese nerves in the face of Chinese influence in the region. Second, of course, could be the fact that Japan does not recognize the sanctuary and considers it international waters.

In class, we have been recently talking about the extent of national jurisdiction and extraterritoriality. It is, therefore, interesting when a court rules against a party that is operating in a disputed or internationally governed region. The waters off Antarctica are probably not as intensely disputed as, for example, Kashmir or Kosovo. The fact remains, however, a foreign entity or corporation can always defend its activities by claiming that the region is disputed and the no national court has a jurisdiction. Therefore, it seems as if a national court would always find it difficult to implement any of its rulings against illegal activities in a disputed region. The Japanese government and its whaling ships, for example, do not consider the Federal Court of Australia as the proper arbitrator for any disputes concerning whaling. The article also mentions that there is distrust between the two countries, which would make things even more complicated. In such a scenario, an international arbitration panel that both countries are signatories to would be the proper venue for dispute resolution. Here, the International Whaling Commission could be approached if Australia is completely willing to implement its court’s ruling and argue that Japan’s whaling is not for scientific purposes.

submitted by: Mohammad Siddiqui

This article discusses the current attempts to create a French television station similar to the BBC. What does this suggest about technology and communications as a growing area of international trade? See http://www.iht.com/articles/2008/02/22/technology/pubcasters.php

Much attention has been focused on the rising price of gold, especially in light of the recent instability in international markets. This article discusses the recent pricing trends in sugar. See http://www.iht.com/articles/2008/02/24/business/rtrinvest25.php

This article discusses the issue of the new British taxation scheme for foreign residents in the context of the overall British economy and its recent reliance on foreign residents for expansion. See http://www.iht.com/articles/2008/02/22/business/wbjoe23.php

After much pressure from private and public actors, China has begun to make statements regarding the Sudan's actions in Darfur. Some of the people interviewed in this article seem to think that this will make the humanitarian situation in Darfur worse and others disagree. What are the ramifications of the Chinese position on international trade? What might be the possible ramifications on US trading policy? Should trade policy be used as a vehicle of encouraging certain stances on human rights at all? See http://www.iht.com/articles/2008/02/23/africa/23darfur.php

This article discusses the current appeal before the European Court of Justice regarding the rates and fees imposed on roaming charges used by cellular phone providers that operate in the EU. See http://www.iht.com/articles/2008/02/22/business/roam.php

This article discusses the decision of a prominent British sugar company to become affiliated with the Fairtrade movement. What do transnation movements such as Fairtrade do to the concept of international markets? What do they do to the concept of sovereignty and the currently existing structures for international assistance to impoverished areas? See http://news.bbc.co.uk/go/em/fr/-/2/hi/uk_news/7260211.stm

As this article discusses, economists expect a rise in Indian inflation rates for February, 2008 due to the increasing price of food stuffs in India. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7258501.stm

This article discusses the newly signed agreement between Argentina and Brazil for the construction of a nuclear facility which will provide both countries with energy. See http://news.bbc.co.uk/go/em/fr/-/2/hi/americas/7260194.stm

As a follow-up to the story posted in regards to the UN's discussion of new sanctions for Iran, the US has announced its support for these sanctions. See http://news.bbc.co.uk/go/em/fr/-/2/hi/middle_east/7260122.stm

This article discusses the issue of Germany's immigrant population as its first generation faces retirement. It is interesting generally and also discusses some of the social services which are made available to Germans and are often the target of debate regarding the effect of these services on the health and future of the German economy. See http://www.iht.com/articles/2008/02/21/business/wbimmig.php

This article discusses the new Open Skies agreement between the US and EU in regards to transatlantic air travel that will go into effect in March, 2008. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7256918.stm

The EU has just reduced its expected economic growth rate for the Eurozone area for 2008. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7257119.stm

The UN has begun to consider a new package of economic sanctions aimed at stopping the Iranian nuclear development program. See http://www.iht.com/articles/2008/02/22/news/22nations.php

In a somewhat different approach on the use of sanctions, the US has just imposed sanctions against a Syrian businessman who has family and political ties to the Syrian regime. See http://news.bbc.co.uk/go/em/fr/-/2/hi/middle_east/7257532.stm

The Taiwanese cabinet has just approved a plan to restructure Taiwanese corporate taxation policies in order to increase its competitiveness. See http://www.ft.com/cms/s/0/a5b27b1a-e03a-11dc-b0d7-0000779fd2ac,noOfParas=2,emailFormat=plainText,storyType=ultralight,dwp_uuid=7f5f6b12-2f66-11da-8b51-00000e2511c8,print=no,_i_email=y.html

This article discusses new economic measures by the French government and the IMF's positive reaction. See http://www.ft.com/cms/s/0/6d2c0e7c-e022-11dc-8073-0000779fd2ac,noOfParas=2,emailFormat=plainText,storyType=ultralight,print=no,dwp_uuid=7c485a38-2f7a-11da-8b51-00000e2511c8,_i_email=y.html

France's inflation rates increased by 3.2% in January, 2008. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7256285.stm

In a further continuation of the Exxon/Mobil story, the Venezuelan government has settled with several non-American oil companies whose assets were taken as part of the government's nationalization process. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7256569.stm

This article discusses the rapidly rising rate of inflation in Zimbabwe at the same time that political tensions are also increasing domestically. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7255588.stm

This article discusses the effects of the global market downturn on two large European banks, one in the UK and one in France. See http://www.iht.com/articles/2008/02/20/business/banks.php

As a follow-up to our class discussions and readings involving taxing regimes, this article discusses the relationship between Germany and Liechtenstein in regards to persons who seek to evade taxes in Germany by dealing with Liechtenstein. See http://www.iht.com/articles/2008/02/20/business/tax.php

The German Steelworkers union has just won an increase in wages for its members. This article provides an interesting discussion on the state of labor unions in Europe, especially in light of governmental attempts to control certain aspects of their economies. See http://www.iht.com/articles/2008/02/20/business/wage.php

Following an internal investigation, Societe Generale has provided more information into when and how its "rogue trader" acted. See http://www.iht.com/articles/2008/02/20/business/socgen.php

This article discusses the state of the South African economy and budget in light of a recent energy crisis experienced inside the country. See http://news.bbc.co.uk/go/em/fr/-/2/hi/africa/7255326.stm

This article discusses the impacts which a price fixing penalty and rising production costs are expected to have on Heineken specificially and the impact of rising production costs on the beer industry generally. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7254590.stm

This article briefly discusses the ways in which the US and China have and are attempting to cultivate relationships with various governmental regimes throughout Africa. What are the potential trade and economic impacts of these attempts for African nations, the US, China and the global market per se? See http://news.bbc.co.uk/go/em/fr/-/2/hi/asia-pacific/7255077.stm

Consumer prices in the US rose .4% in January, 2008, which was above the amount expected by most economists. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7254969.stm

The EU has announced that 20 of its member states will not accept new WTO proposals relating to farming practices and international trade because the proposals would be damaging to farming in the member states. See http://www.iht.com/articles/2008/02/18/business/wto.php

This article discusses the concerns of some economists that the Australian economy is growing too fast and will be plagued by high inflation rates unless it is controlled to a certain degree. It also discusses the impact of economic conditions in Asia on the economies of states such as Australia.

http://www.iht.com/articles/2008/02/19/business/ozecon.php

The Mayor of London recently announced a plan to impose heavy taxes on car usage in the City of London for environmental purposes (ie. lowering pollution). In response, Porsche is threatening to sue the City over the new taxes. What does this suggest about the impact of localities on international trade generally? What would be the likely outcome if a US city decided to impose the same measures and was sued by a company such as Porsche? See http://www.iht.com/articles/reuters/2008/02/19/business/OUKBS-UK-PORSCHE-LONDON.php

This article discusses the rising interest rates in China and the potential effects of these rates on economies which import large amounts of Chinese goods, such as the US and EU member states. See http://www.iht.com/articles/2008/02/19/business/19inflation.php

This article discusses new attempts by Australia to regulate sovereign wealth funds and the criticisms leveled against these measures, particularly from China. What do such criticisms say about the concept of sovereignty in an increasingly globalized marketplace? Are these criticisms valid? See http://www.ft.com/cms/s/0/deedbe8a-ddfb-11dc-9de3-0000779fd2ac,noOfParas=2,emailFormat=plainText,storyType=ultralight,dwp_uuid=7f5f6b12-2f66-11da-8b51-00000e2511c8,print=no,_i_email=y.html

This article discusses the development of Tangiers as a major port and trading extension area for Europe. See http://www.ft.com/cms/s/0/660d05ee-dc1f-11dc-bc82-0000779fd2ac,noOfParas=2,emailFormat=plainText,storyType=ultralight,dwp_uuid=fc3334c0-2f7a-11da-8b51-00000e2511c8,print=no,_i_email=y.html

This article discusses the negative attitude which exists toward the IMF in many corners of the Asian markets as a result of IMF measures during the Asian recession of the late 1990s and two current attempts by the IMF to regain its legitimacy in the eyes of the Asian markets. See http://www.iht.com/articles/2008/02/18/business/rtrinside19.php

In an interesting example of the globalization of commodities and its effects on large-scale producers and consumers, major firms in South Korea and Japan have agreed to a 65% price increase in the price they pay for Brazilian iron ore. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7250118.stm

A new study indicates that US consumer confidence has fallen in recent months. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7247300.stm

Despite Apple's phased marketing plan for the iPhone, there is a growing market for iPhones which are smuggled into China, which is the site of production for iPhones. See http://www.iht.com/articles/2008/02/18/technology/iphone.php

A militant group in Nigeria has requested that President Bush become involved in the dispute between the Nigerian government and militants in the oil producing area of Nigeria on the grounds that the US is the primary customer of Nigerian oil. What does this say about the way in which trade is currently viewed in the overall geo-political context? Is the US' status as the primary consumer of Nigerian oil a legitimate reason for involvement in the dispute? Would the answer to this question change if a commodity other than oil was involved? See http://news.bbc.co.uk/go/em/fr/-/2/hi/africa/7250539.stm

This article discusses a specific defense contracting deal between Lockheed and India but it also raises the interrelation of defense contracting on a global level. See http://news.bbc.co.uk/2/hi/business/7250474.stm

As this article discusses, India and Pakistan are now working together to have basmati rice - grown exclusively in these countries - registered as an official growing area akin to champagne so that no other areas in the world can grow and sell "basmati" rice under that name and designation. What does this say about the ability of trade issues to unite countries which have otherwise shaky relationships? See http://news.bbc.co.uk/2/hi/business/7246900.stm

Responsibility in International Trade

A Blog Entry on: Ethical Capitalism: How Good Should Your Business Be? The Economist January 17, 2008.

http://www.economist.com/opinion/displaystory.cfm?story_id=10533974&CFID=5938976&CFTOKEN=29e4ce11f0b96ea8-B6B9B970-B27C-BB00-012B08BB51E4E225

Globalization is a broad topic in the realm of international business and trade. While there are many positive aspects to the vast increase in trade and communication capabilities throughout the world associated with globalization, there are just as many negative ones. The International Forum on Globalization’s (“IFG”) expounded some of these negative impacts in its position statement. See Text, p. 24-25. The idea of corporate social responsibility (“CSR”) fascinates me for a variety of reasons; primarily because of my highly cynical view of free market enterprise selflessness. A successful business must more often then not keep the shareholder happy. The article from The Economist describes a popular business mantra adopted by many corporations today: “Doing well by doing good” while raising the issue of whether corporations can actually act for the well being of society yet satisfy the need for a robust bottom line. I write to discuss the need for governmental intervention and oversight in light of this emerging free market mechanism.

The idea of “good corporate citizenship” is discussed at length by The Economist. While the article suggests that the idea of CSR is merely another form of corporate self-interest, it is proposed that multinational firms engaging in CSR can bring about many societal benefits in the face of globalization. I wholeheartedly concur but with the caveat that CSR must be carefully monitored and regulated. There should be little doubt as to the power of consumers operating in free market economies – in their ability to choose what to buy and invest in, the buyers and sellers can shape global trade. Consumers responding to responsible and carefully monitored CSR campaigns may even help to effectuate “equitable, democratic, and ecologically sustainable” goals discussed by the IFG in its position statement. However, I propose that the buck should not stop with the consumer as private business does not exist to solve world problems.

Developing a strategy for and engaging in CSR does not mean a company must automatically eat the costs typically associated with “doing good.” A Harvard University experiment was conducted with the product of towels in upscale New York stores. Researchers labeled the ordinary towels with a “Fair and Square” (F&S) label, increased the price and depicted the following message for consumers to read:

These towels have been made under fair labour conditions, in a safe and healthy working environment which is free of discrimination, and
where management has committed to respecting the rights and dignity of workers.

After keeping the towels on the shelves of an upscale department store for a few weeks, the results showed that the quantity of towels with the F&S logo sold increased despite the higher price. Moreover, even when the price was increased further, the quantity sold increased. While a variety of reasons exist to explain this somewhat backward economic result, what is clear is the existing potential for deceptive marketing practices. The deception here is marked by a corporation’s ability to take advantage of CSR – leaving only the company itself to truly understand if and how the benefits described by the label’s message were ever accomplished. On a tangential note, this example also helps to illustrate some of the benefits to having responsible social change led by non-profit organizations.

Some of the IFG’s basic goals must be focused at assuring that the multinational corporations that rely on and/or engage less developed countries do not destroy the various unique attributes of the local economy, culture and society in general for the sake of profit. Similarly, like other human rights groups around the world, the IFG is concerned with the exploitation of the working class in poorer countries. These goals, while unique, may be difficult to effectuate without some form of altruism. Corporate altruism may exist only in pure theory but for the purposes here I propose is stands for the idea that a government would spend its resources with no realistic expectation of recovering them. Except when used to elevate a corporation’s status or reputation, these altruistic actions fly in the face of the need to satisfy shareholders, the board of directors and so on. Corporations will rarely act in complete disregard for monetary considerations. I think this notion echoes particularly true in the case of developing nations. By way of expression, I suggest that unsupervised big business may sooner give the third world farmer/worker a fish to satisfy his hunger then spend the time and money necessary to teach him how to do it himself. Therefore, because government is said to exist for the people, it is still in the best place to curb the potentially devastating effects of irresponsible globalization.

Given these basic notions of free market enterprise and the CSR theory, I believe governmental entities must keep pace with the large private entities in the face of globalization. While the idea of CSR may help effectuate some of the IFG’s goals, governments and non-governmental organizations (“NGOs”) cannot shy away from their responsibility to help assure peoples' natural sovereign rights in developing nations don’t take a back seat to cleaver marketing strategies. One mechanism to effectuate this plan is through governmental oversight of CSR campaigns via enactment of laws and regulations. The negative outcomes of globalization, as discussed by the IFG’s position statement, cannot and must not be primarily fought by private entities operating for profit in the free market. To the contrary, such multinational firms must have greater checks placed on them.

Taken one step further, in the case of developing nation, local governmental bodies may be ill-equipped to set up the potentially strong rules needed to check corporate abuse. It is for this reason that developed nations must help play a role in providing guidance within the international community. Like our various consumer protection and anti-fraud statutes in the U.S., developing nations should play close attention to the private multinational actors in their state. Because such laws may not be easily implemented in the country that seeks to bring money in, the developed nations in which these multinational firms are domiciled are in better position to take action.

submitted by: PT

This article discusses the actions of the British government to intercede in and investigate an arms transaction between a UK company and Saudi Arabia. Although this happened in the UK, we've read at least one case involving a somewhat similar scenario in the US. What does this say about the role of governments in regulating transactions involving arms and general defense items not only in terms of protecting national economic knowledge but also in terms of protecting national security? Which of the two, if any, seems to be the better argument for this type of government intercession? See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7244051.stm

The Federal Reserve Chairman recently issued a warning that the US economy is still in a state of projected decline. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7245312.stm

The US has announced that its trade deficit decreased last year. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7244993.stm

In yet another follow-up to the Exxon/Mobil dispute with Venezuela, Venezuela has issued statements casting doubt on the amount of monies involved in the dispute. What do these statements do to potential arguments over jurisdiction and the application of either the FSIA or act of state doctrine at later points in the litigation? See http://news.bbc.co.uk/2/hi/business/7246586.stm

Despite recent headlines regarding contaminated products, China has a higher than expected trade surplus for January, 2008. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7246256.stm

This article discusses the economic policy statements made by Dmitry Medvedev, who is expected to be Vladimir Putin's successor to the Russian Presidency after the March 2nd elections. See http://news.bbc.co.uk/go/em/fr/-/2/hi/europe/7246161.stm

The Bank of Japan has announced that it will not alter its interest rates. See

http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7246151.stm

The WTO recently announced the negotiation plan it intends to implement for the upcoming Doha round of talks regarding tariffs and other issues. Although the intent of the negotiation plan was to appease developed and developing countries, it has met with mixed review, most recently from the European Union. See http://www.iht.com/articles/2008/02/14/business/doha.php

and

http://www.iht.com/articles/reuters/2008/02/15/business/OUKBS-UK-TRADE-EU-WTO.php

On Monday this week, President Bush signed his 2008 economic report. http://www.whitehouse.gov/news

The part in the report relevant to our class is Chapter 3. The Causes and Consequences of Export Growth where it reveals the Executive’s take on the U.S. economic policies and goals with respect to international trade. http://www.whitehouse.gov/cea/2008_erp_ch3.pdf

As stated in the concluding remarks of the chapter, the Bush administration is pushing for further liberalization of trade with countries of various regions through multilateral, regional and bilateral negotiations. It also supports the expansion of multinationals by means of open investment, outsourcing, specialization, and division of labor.

Keeping these economic policies and goals in mind would help us analyze current events more in depth as to the on-going Executive actions with respect to foreign policy as well as in the context of balance of powers with other branches of government.

One thing I personally thought interesting to observe as it currently unfolds is, despite of its scandalous nature, the controversy over the Security and Prosperity Partnership of North America (SPP). http://spp.gov President Bush entered into agreement with the leaders of Canada and Mexico in 2005 to form a joint commitment to the security and prosperity of North America. Because of the vague language and informal nature of the agreement, so to speak, the SPP has brewed many speculations as to the motive of forming such pact among these three countries. One speculation is focused on the likelihood of creating a uniform currency pseudonymously call