Reinventing the IMF?

October 26, 2008

With the continued decline of financial markets and the threat of radical destablization throughout the Global South, I suspect that a consensus view that the IMF must step in to ensure the solvency of developing countries is already spreading quickly among the punditocracy and major news outlets.

The IMF (photo by Kyrion cc-by-nc-nd)

The IMF (photo by Kyrion cc-by-nc-nd)

Given the weakened condition of wealthy states and corporations, the IMF will play a major role in any sort of multilateral bailout. Indeed the crisis presents an opportunity for the Fund to resurrect itself after a number of very, very bad decisions made in the Neoliberal 1980’s and 90’s finally came home to roost, bringing shame upon the organization and its ideas.

The question is what kind of an IMF will we get this time around? The critical work of Joseph Stiglitz, Ngaire Woods, and others has provided ample evidence that the Fund’s proclivities for anti-poor policies were not an accident, but a systematic result of the organization’s structure and culture.

Since 2002 (when such positions first gained widespread traction), there has been much talk of reform – a trend which will no doubt continue well past November’s Global Financial Summit – but precious little action.

The U.S. and Europe still retain a ridiculous share of the voting power within the IMF, World Bank, and the WTO, virtually guaranteeing that they will strong arm through whatever solutions they deem fit. While Ambassadors, Trade Representatives, and their ilk may talk a good game about promoting equality through increased multilateral liberalization, the bottom line is that truly equitable trade will not come about without a substantial sacrifice by the traditional “Great Powers” of the West. The recent trend of the U.S. and E.U. pursuing absurd schemes to evade accountability and transparency by undermining global forums also belies any rhetoric of good will.

Does the IMF have what it takes to bring about a true shift in the underlying structures of the global financial system? I doubt it, but it will be revealing to see just how hard Dominique Strauss-Khan (if he holds onto his job now that he has officially held onto his job despite a sex scandal) and his colleagues will try.

I was working on a short article this morning that looks at some of the recent global governance conflicts over Access to Knowledge when I realized that it’s been a while since I’ve heard of new developments in the Anti-Counterfeiting Trade Agreement (ACTA) negotiations.

Ever since Senators Pat Leahy (D, VT) and Arlen Specter (R, PA) voiced their concerns to the USTR and the Australian Department of Foreign Affairs and Trade let on that the future of the agreement might be at risk, my RSS feeds and email lists appear to have gone silent on the issue.

Even the USTR has not had anything to say since this October 10 statement (pdf) issued immediately following the Civil Enforcement negotiations meeting.

The best theory I can come up with (absent any evidence whatsoever) is that the trade representatives and negotiators have been a little busy lately dealing with the trade-related complications of the global financial crisis.

Anybody out there know what the USTR’s been up to these days or have new information about ACTA?

Haven’t written about ACTA in a little while, but I couldn’t help myself from responding to this piece on the Intellectual Asset Magazine website.

Taking a short-term perspective shared by many large IP owning firms, the author Joff Wild argues:

My view is that countries in which IP is a very valuable asset are perfectly entitled to get together to work out ways in which it can be better protected.

The problem with this argument, and with much of the ACTA proceedings thus far, is that the countries involved have not integrated the competing interests of stakeholders into the negotiation processes in an effective way.

Even if you, like Joff, are not compelled by the claim that ACTA will be bad for global governance, bad for developing countries, and bad for global equality (which it almost certainly will), it is crucial to recognize that many of the most important and innovative firms in the U.S. and Europe are also likely to suffer from this agreement.

Don’t take my word for it, though.

Check out this letter recently submitted by AT&T,, Computer and Communications Industry Association (CCIA), Consumer Electronics Association, eBay, Information Technology Association of America, Internet Commerce Coalition, NetCoalition, US Internet Service Provider Association, US Telecom Ass., Verizon Communications, and Yahoo! Inc.

The letter is addressed to US Trade Representative Susan Schwab and leaves no doubt that these Telecom and IT giants do not appreciate the cavalier IP extremism on offer from the ACTA proponents thus far (all emphases are mine):

We appreciate your objective of protecting the intellectual property of American
rightsholders from infringement overseas. However…there is a very real possibility that an agreement that would require signatories to increase penalties for “counterfeiting” and “piracy” could be used to challenge American companies engaging in online practices that are entirely legal in the U.S., that bring enormous benefit to U.S. consumers, and that increase U.S. exports.

and later:

…because ACTA risks having such an adverse impact on intermediaries operating
in full compliance with U.S. law, the negotiating process should be as open and
transparent as possible

and last but not least:

…given the importance and complexity of the issues under discussion, we urge you
to proceed with the negotiations at a more deliberate pace
. It is critical that there be
sufficient time to ensure that the agreement is in the broad national interest.

Unless Schwab, the USTR office, and other negotiating parties recognize this reality soon, the results of their well-intentioned actions will be bad for the Internet economy, bad for innovative industries, and generally bad for society as a whole.

If, as Wild puts it, ACTA faces “a long and tortuous path to ratification” that might be the best news yet about this half-baked proposition.

From Sunday’s FT opinion pages:

The current global policy debate is a cacophony. It is all very well to advocate increased US saving and a cut in the US current account deficit but the process for bringing it about will mean less US demand for foreign products. That will put pressure on jobs and output growth in other countries if no countervailing measures are put in place. Conversely, the return of a stronger dollar without other policy changes will raise US demand for exports but at the price of cutting demand for domestically produced goods and compounding the recession.

These problems will be with us for some time. They may not be at the top of anyone’s agenda right now. But the success of the next administration could depend on its ability to engage with a wider range of global economic stakeholders, on a broader agenda, at a time when disagreements are increasing not just about means but also about ultimate ends.

Are the governmental institutions of the United States up to this challenge? Europe? China?

The collapse of consensus at the global level appears more imminent than ever these days – Doha’s failure and the appearance of ACTA (a proposed trade agreement that would effectively undermine WIPO and the TRIPS agreement) are part of a broader current that may sweep the Bretton Woods institutions into the dustbin of history.

Intentionally or not, the Bush administration has furthered this process quite effectively.

In the midst of a (likely) recession and the ongoing erosion of its diplomatic and military authority, what steps will the next U.S. administration take?

Mark Harris filed a request with the New Zealand Ministry of Economic Development (MED) to release all documents pertaining to the ongoing ACTA negotiations.

Here’s what happened:

The Ministry of Economic Development has released just 13 out of 91 documents relating to its negotiation of a controversial international Anti-Counterfeiting Trade Agreement (ACTA) after an official information request.

Consultant Mark Harris made a request for “any and all information” the MED holds on ACTA. In response, MED identified 91 documents falling within the ambit of the request. The department has supplied Harris with just 13 of these and some parts of most of have been withheld.

The disclosure was mostly denied because it is considered likely to “prejudice the entrusting of information to the Government of New Zealand on a basis of confidence by the government of any other country or any agency of such a government.”

I haven’t had a chance to look through the docs yet, but it will be very interesting to find out if there’s any new information.

The real question, of course, is what’s in the rest of those 91 documents and why can’t the negotiating parties be transparent about this process?

Monika Ermert has filed another insightful piece on ACTA over at Intellectual Property Watch. She discusses the latest round of secret negotiations in Washington; compares the statements of the negotiating states on the progress of the agreement; and lays out a number of critical perspectives emerging from private industry and non-governmental groups that don’t trust a secret negotiation process to represent the rights, interests, and complexities of the many issues involved.

Professor Geist’s latest update on ACTA shenanigans in Canada came out on July 28, in The Toronto Star.

You really should go read the whole thing, but here are my two favorite chunks:

What [Canadian Industry Minister Jim] Prentice did not reveal is that officials have been developing plans to establish an “insider” group comprised solely of government departments and industry lobby groups that would be provided with special access to treaty documentation and discussion.

The decision to create a two-track approach for ACTA consultations appears to have been deliberate. The same documents discuss the prospect a public track that would include a general public consultation (which was held in April) along with the insider group that would be privy to treaty information

there is absolutely no representation of the public interest — no privacy representation despite the obvious privacy implications of the treaty (the Office of the Privacy Commissioner of Canada was not included on the government invitee list), no consumer representation despite the effects on consumer interests, and no civil liberties representation on a treaty that could fundamentally alter Canadian civil rights.

The government documents indicate that members would engage in “in-depth exchanges on technical negotiating issues” and therefore be required to sign confidentiality agreements in order to participate.

This is egregious stuff. Kudos to Geist for breaking the story – and unfortunate that it hasn’t gotten much play in the international press.

I also have to wonder whether this formalized two tier approach been pursued elsewhere?

FOIA request anyone?