Political Committee

Good governance as a fundamental requirement to achieve progress and democracy in the newly established governments in the Arab Spring region.

by Josephina Wenke

Definition

The Arab Spring was the revolutionary wave of demonstrations and protests, riots, and civil wars in the Arab world that began on 18 December 2010. The Revolutions took and take still place in Algeria, Bahrain, Egypt, Dschibuti, Jordan, Iraq, Kuwait, Libya, Morocco, Oman, Qatar, Saudi-Arabia, Syria, Tunisia, UAE and Yemen (alphabetical order).

Situation before the Arab Spring

Before the Arab Spring the North African States tar are now known as „Arab Spring states” were charcterized by:

-Authoritarianism in states of North Africa 

-increasing unemployment figure, especially unemployment among young people

-surging prices (e.g. nutrition, energy…)

-resulting popular discontent

Development

The Arab Spring began with a mostly bloodless and quick revolution in Tunisia in late 2010 and early 2011. The revolution removed former President Zine El Abidine Ben Ali and replaced him with a temporary unity government. In October, 2011, the Enhahda Party, an Islamic organization, won a plurality in an election to form a Constituent Assembly, which is working on drafting a new national constitution.

Rebels in Egypt grew significantly more powerful shortly after the revolution in Tunisia. The Egyptian revolution was more violent than the Tunisian Revolution, but it successfully ousted former President Hosni Mubarak after several weeks. Since Mubarak's removal, the nation has moved toward a new constitution, and is currently ruled by a military government. A presidential election is expected to occur in late summer, 2012, with several Islamist candidates expected to do well.

The Libyan civil war began immediately on the heels of the Egyptian Revolution. Libya is still undergoing its government transformation, but appears to be aiming at a more Islamic government than Gaddafi had led.

Additionally, Yemen has also replaced its government after months of violence and protests. Yemen's revolution took place alongside the Egyptian Revolution, but was not nearly so dramatic. In Yemen, the protesters succeeded in removing President Ali Abdullah Saleh, but then replaced him with his Vice-President, Abd al-Rab Mansur al-Hadi.

The Syrian Revolution is ongoing, and has been about as bloody as the Libyan Revolution, but with no end in sight, and very littlie foreign involvement. President Assad has used his military on an almost daily basis to kill rebels and protesters there, and is unwilling to negotiate with them. At the moment it appears that the fighting in Syria could go on for a very long time.

Consequences of the Arab Spring

The biggest single achievement of the Arab Spring was in demonstrating that Arab dictators can be removed through a grassroots popular revolt, rather than a military coup or foreign intervention as was the norm in the past. The downfall of many regimes enabled the Establishment of governments in now so called „Arab Spring Region”.

The Middle East has witnessed an explosion of political activity, particularly in the countries where the revolts successfully removed the long-serving leaders. Hundreds of political parties, civil society groups, newspapers, TV stations and online media have been launched, as Arabs scramble to reclaim their country from ossified ruling elites.

Otherwise the Arab Spring ushered in a prolonged period of political instability, unleashing all the political, social and religious division. The economy has been damaged, just as infrastructure and tourism.

In some countries, the breakdown of the old order led to armed conflict that last until today.

Further Research links

www.theguardian.com/world/interactive/2011/mar/22/middle-east-protest-interactive-timeline

www.foreignaffairs.com/articles/137053/fouad-ajami/the-arab-spring-at-one

ijoc.org/index.php/ijoc/article/viewArticle/1246

Fighting protectionism as a challenge for the development of LEDCs and for international co-operation and multilateralism with special regard to the World Trade Agreement from December 2013.

by Chandni Sophia Schattenfroh

Introduction

Many economists argue that only by removing restrictions on trade (such as tariffs) can goods and money flow freely around the world and global markets develop without inhibition. Some disagree, arguing that where there is a huge imbalance of trade between countries, it can impact jobs and wealth.  The economic policy of considerably limiting trade between states or countries through government regulations is called protectionism. This practice contrasts with free trade, in which there is no governmental restriction on imports or exports.  Many free trade agreements (FTAs) have established an open market, although most governments still implement some protectionist policies. Over the period of time these “anti-globalization” or mercantilist policies have turned out to be rather counterproductive and growth-limiting for some countries, especially LEDCs. However, other economists are also concerned that exposure to mighty global businesses has the potential to damage developing countries, and that virtually all developed countries today promoted their national industries through successful protectionism. The free trade/ mercantilist dispute was the most important question in economies for centuries, with early opponents of protectionism, such as Adam Smith or David Ricardo. Thus delegates are going to have to consider both, advantages and disadvantages of protectionism, when finding solutions to regulate or moderate the use of it. While fighting unjustified protectionism from the side of MEDCs and LEDCs one will have to simultaneously ensure a country’s economic stability and consider all parties’ interests. Only then will the committee come to an effective and feasible resolution.

Key Terms

Protectionism:  Government actions and policies that restrict or restrain international trade, often done with the intent of protecting local businesses and jobs from foreign competition. Typical methods of protectionism are import tariffs, quotas, subsidies or tax cuts to local businesses and direct state intervention.  The term is largely associated with anti-globalization. [1]

Free trade: The idea of an open market that is often established through FTAs and that allows the trade of goods and services without taxes. It encompasses no “trade-distorting” policies that may give some an advantage over others, but promotes unregulated access to markets and trade agreements.

Multilateralism: It can be practiced in the form of membership in an alliance or in international institutions and is necessary to discourage unilateralism, and give small powers a voice and unique voting opportunities. Organizations, such as the UN or the WTO are of a multilateral nature. The main proponents of this policy traditionally are the middle powers such as Canada, Australia, Switzerland, the Benelux and Nordic countries.  Multilateralism can often turn out to be much more complex and challenging than unilateralism or bilateralism.

International co-operation:  The pursuit of a common goal or interest through the interaction of persons representing various nations. Delegates will find that protectionism often hinders the realization of projects, originating from international co-operation.

FTAs: Free Trade Agreements are often the best way to open up foreign markets to exporters.  Examples are the NAFTA or, if finalized, the Transpacific Partnership and the Transatlantic Trade and Investment Partnership. 

Protectionism

Trade protectionism is used by states that believe their industries are endangered or being damaged by foreign industries. Proponents of protectionism argue that their economic policies ensure fair competition between imports and goods and services produced domestically.  This defensive measure can work in the short run, but usually makes the industries it seemingly protects, less competitive globally. To achieve their goals various policies can be implemented.

A country may enact tariffs, which tax imports, raising imports’ prices, and making them less competitive when compared to locally produced products. This may turn out to work successfully for countries that import consumer products.  

A famous example is the Smoot-Hawley Tariff of 1930, which was intended to protect farmers from European agricultural imports. Once the bill was passed, it had imposed tariffs on many other imports too. As so often happens with protectionist measures, other countries retaliated, causing a tariff war and restricting global trade, as well as growth and wealth that came with it. This tariff contributed to the long-felt severity of the Great Depression. 

Another example for protectionism is that of subsidizing local industries with the help of tax credits or direct payments, thus lowering the price of locally produced goods and services. This practice is even more advantageous than tariffs, as goods are cheap even when shipped overseas. This is often done by countries which mainly rely on exports such as China, South Korea, Indonesia, U.S., Mexico, Germany and Japan.

The most effective method, though, is that of imposing quotas on imported goods. Countries are then not able to ship in more goods no matter how low their costs may be set through subsidies. 

Another very subtle method of protectionist policies is the attempt of a country to deliberately lower its currency value. This can be achieved through fixed exchange rates or the creation of extensive national debt. This makes its exports cheaper and more competitive, but will most probably result in retaliation, triggering a currency war. 

Today, protectionism is not always limited to LEDCs, but may also be implemented by developed countries. Their efforts in imposing individual labor, environmental or safety standards are often criticized as “disguised protectionist policies”.  The EU’s Common Agricultural Policy (CAP) is often accused of this or proposed “Buy American” provisions.

Advantages of Protectionism

There are several arguments made by proponents that legitimate the need for restrictions on free trade in order to protect their country’s economy, people and standard of living.

In order to develop their own competitive advantages, tariffs will protect a country’s new industry by giving it time to reach an efficient level of production.  This is known as the Infant industry argument.

Protectionism may assist in temporarily creating jobs for domestic workers, as companies protected by these policies will hire locally. Once other countries retaliate by erecting own protectionist measures for that industry this development will stop.

Disadvantages of Protectionism

On a long term basis, trade protectionism will weaken a country’s industry. Innovation and product improvement only take place in an industry where companies are in direct competition. The lack of competition, though will lead to consumers paying more for a domestic lower quality product than they would for one from foreign industries.

Even though FTAs have been blamed for outsourcing, protectionist policies also result in it.  Job outsourcing hugely is a result of a country’s declining competitiveness. In the U.S., for instance, this is the result of not investing in education, but mainly focusing on import tariffs etc. The Peterson Institute for International Economies “estimates that ending all trade barriers would increase U.S. income by $500 billion”. On the other hand, increasing its protectionism will slow economic growth.

Economic theory also shows that the gains from free trade outweigh any losses by creating more jobs, as it allows countries to specialise in the production of certain goods.

Protectionism has been accused of being a major cause of war. Here, economists, point to the warfare in the 17th and 18th century among European mercantilist and protectionist countries, and the American Revolution due to British tariffs and taxes.  Frédéric Bastiat once said, “When goods cannot cross borders, armies will”.

Although there is no clear rise in protectionist measures, protectionist pressures seem to increase.  Support for globalization is weak in some regions of the world. Protectionist pressures tend to become stronger in weak regions at times of economic and financial stress. 

Bali Package

The World Trade Agreement or Bali package is a trade agreement of the World Trade Organization (WTO). The package was approved by all its members and will try to lower global trade barriers.  It offers provisions for the lowering of tariffs and agricultural subsidies so as to make it easier for developing countries to trade with already developed countries on the global marketplace. Developed countries will abolish strict import quotas on products from LEDCs and can only charge taxes or tariffs on amounts, exceeding specific limits. It also calls for reforming customs bureaucracies in order to facilitate trade.  The agreement covers four areas: Trade Facilitation, Agriculture, Cotton and the Development and LDC issues.

The last point covers measures, including preferential treatment and market access for Least developed countries (LDCs) and developing countries:

  • Simplification of rules for identifying origin and qualifying for preferential treatment with importing countries
  • Allowance of preferential treatment to be given to LDCs for 15 years
  • Duty-Free and Quota-Free (DFQF) market access for LDCs
  • Monitoring of special and differential treatment given to developing countries.

During negotiations India demanded to be allowed to extend its domestic agricultural subsidies, but was met by opposition from the U.S. It was decided that a permanent solution shall be found in separate negotiations within the next four years, although India was able to introduce an exception for its subsidy programme. 

If the measures are properly carried out, the Peterson Institute for International Economics estimates a US$1 trillion worth of global economic activity, add 21 million new jobs and lower international trade costs by 10-15 percent.

In addition, the WTO Agreement contains a dispute settlement mechanism, as well as a mechanism through which members’ trade policies are regularly reviewed. Delegates may base some of their solutions on the establishment of a similar organ.

Major Parties involved

U.S., EU, G-20*, India, Brazil, China and the WTO. 

*forum for international economic cooperation and decision-making, with members from 19 countries plus the EU. The members account for 85% of the world economy, 76% of global trade, and two-thirds of the world’s population.

The above mentioned parties are all members of trade organization or countries with numerous FTAs. Some of them, such as China that is accused of currency manipulation, practice disguised protectionism or have already established subsidy systems, tariffs and quotas.   

The latest WTO report on G-20 trade measures states: “The multilateral trading system remains the best defense against protectionism and the strongest force for economic growth, sustainable recovery and development.”

Important Treaties and Agreements

  • Bali Package
  • General Agreement on Tariffs and Trade (GATT)
  • Sanitary and Phytosanitary Measures Agreement (SPS)
  • Technical Barriers to Trade Agreement (TBT)
  • Agreement on Agriculture

Delegates should consider that agriculture remains a cornerstone of many economies, especially in developing countries, as nearly 75% of their population still lives in rural areas. It may prove to be difficult to find applicable solutions for combating protectionist policies, while guaranteeing the secure development of LEDCs or LDCs. They are not to forget to further stress the importance of free trade by bringing it into direct comparison with protectionism. Delegates should also try and fight “disguised protectionism”, while considering by what means some developed countries reached their current economic power. In the words of 19th century German economist, Friedrich List:

“It is a very common clever device that when anyone has attained the summit of greatness, he kicks away the ladder by which he has climbed up, in order to deprive others of the means of climbing up after him. In this lies the secret of the cosmopolitical doctrine of Adam Smith, and of the cosmopolitical tendencies of his great contemporary William Pitt, and of all his successors in the British Government administrations. Any nation which by means of protective duties and restrictions on navigation has raised her manufacturing power and her navigation to such a degree of development that no other nation can sustain free competition with her, can do nothing wiser than to throw away these ladders of her greatness, to preach to other nations the benefits of free trade, and to declare in penitent tones that she has hitherto wandered in the paths of error, and has now for the first time succeeded in discovering the truth”

Bibliography and Further Readings

The Economics Book, Dorling Kindersley (2012)

http://en.wikipedia.org/wiki/Bali_Package

http://en.wikipedia.org/wiki/Protectionism_in_the_United_States

http://en.wikipedia.org/wiki/Protectionism

http://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm4_e.htm

http://www.wto.org/english/tratop_e/sps_e/sps_agreement_cbt_e/intro1_e.htm

http://en.wikipedia.org/wiki/World_Trade_Organization

http://www.abc.net.au/unleashed/4762460.html

http://www.thefinancialexpress-bd.com/2014/03/03/21475

http://www.sunstar.com.ph/cagayan-de-oro/business/2014/01/19/rising-global-protectionism-worrisome-wto-report-says-324054

http://clothesource.net/opinion/the-wto-bali-package-2-getting-its-impact-on-the-garment-industry-into-perspective/

http://www.dw.de/wto-bali-agreement-expected-to-boost-growth/a-17278088

http://en.wikipedia.org/wiki/Multilateralism

http://en.wikipedia.org/wiki/Free_trade

http://www.investopedia.com/terms/p/protectionism.asp

http://www.trade.gov/fta/

en.wikipedia.org/wiki/Doha_Development_Round


[1] www.investopedia.com/terms/p/protectionism.asp

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