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To: Organizations addressing Trade-Finance Linkages

1)DohaRoundtaboobrokenatG20CannesSummit 2)DevelopingcountryissuesintransferpricingReportfromworkshopnowavailable 3)Sovereigndebtrestructuringandtradeandinvestmenttreaties 4)Indexinvestmentandfinancializationofcommodities 5)UNCTADXIIIConferenceAccreditationnowopen _________________________________________________________________________ 1)DohaRoundtaboobrokenatG20CannesSummit TheG20CannesSummitwasoneofbrokentaboos.AsthepossibilityofexpellingGreece fromtheEurozonewasopenlydiscussedbytheG20LeadersmeetinginCannes,on November,34,abigtaboowasbeingbroken.However,fortradewatchers,amore importanttaboothatwasbrokenconcernedtheWTODohaRoundcompletion. In2001theWTOMinisterialinDohacontroversiallylaunchedtheRoundataneleventh hourdecisionmadeafterseveralMinistershadhadtoabandonthevenueofthemeeting. Yearafteryearsincethen,noofficialhighlevelgatheringhadgonewithoutarepetitionof thepledgetobringtosuccessfulconclusiontheround. IntheirDeclarationtheLeaderssaidthattheystoodbytheDohaDevelopmentAgenda (DDA).But,forthefirsttimesince2001,theysaid"itisclearthatwewillnotcompletethe DDAifwecontinuetoconductnegotiationsaswehaveinthepast.Werecognizethe progressachievedsofar.Tocontributetoconfidence,weneedtopursuein2012fresh, credibleapproachestofurtheringnegotiations,includingtheissuesofconcernforLeast DevelopedCountriesand,wheretheycanbearfruit,theremainingelementsoftheDDA mandate." Thestandstillcommitmentonprotectionistmeasuresuntil2013wasrepeatedinthe Declaration,alongsidetheG20commitmentto"rollbackanynewprotectionistmeasure

thatmayhaverisen,includingnewexportrestrictionsandWTOinconsistentmeasuresto stimulateexports." TradewasalsoathemeinanannexwhichreportedthediscussionsbytheG20 DevelopmentWorkingGroup(DevelopmentWorkingGroup)overthelastyear.But,in whatthatWorkingGroupreported,therewasverylittlethatcouldadvancedevelopment objectives. TheG20calledforasignificantincreaseoftheLeastDevelopedCountries(LDCs)'sharein globaltradeandstatesthat"theG20shouldfostertradecapacityandmarketaccessfor developingcountries,inparticularLDCs/LICs,"butwithlittleindicationofdetailoverhow thiswouldbedone,letaloneatimetable. TheyrecognizedthatDutyFreeQuotaFree(DFQF)access,alongwithsimpleand transparentrulesoforigin,canplayamajorroleinincreasingtradethatsupportsgrowth andpovertyreductioninLDCs.Butthereisnocommitmentattachedtothisrecognition, onlyastatementoffactthatdevelopedcountriesalreadyprovidefullDFQFaccessand thatothershavereached97percent.Butthe97percentfigurehadlongagobeenshown tobeoflittlevalueforLDCs,astheexportitemsthatreallymattertothemcouldbewell coveredintheremaining3percent.[1]Overthelastyear,significantbarriershave reportedlybeenraisedforLDCsexportsevenincountriesthatsupposedlyenjoyedDFQF access.[2]KathrinBerensmanquotestheGlobalTradeAlerttosaythat"141 governmentalmeasureshavehadadetrimentaleffectonthecommercialinterestsofthe leastdevelopedcountries(LDCs)sinceNovember2008.WiththeexceptionofTuvalu,all LDCswereaffected,particularlyBangladesh,Tanzania,Yemen,SenegalandSudan."[3] OntheissueofAfricanregionalintegration,theDevelopmentWorkingGroupreport recommended:technicalandfinancialassistancetoAfricancountriesandtoRegional EconomicCommunities(RECs)tostrengthentheircapacity;measurestofostertrade, includingtradefacilitation;theAfricanUnionMinimumIntegrationPlantosupport AfricaneffortstorationalizeRECs;AidforTradeforAfricaincludingthroughenhanced financingofregionalinfrastructurebyMDBs;andthedevelopmentofregionaltrade corridorsthatwillsupportimprovedregionaltradeinfrastructures,regionaltrade facilitationandexpandedintraregionaltrade. SincetheLeaders'Declaration"supports"thereportoftheDevelopmentWorkingGroup, itisreasonabletopresumethisrecommendationhasbeenendorsed.Thesamecouldbe saidofarecommendationontradefacilitation,foran"improvedforumforexchangeof informationontradefacilitationandtobuildcapacitiesprovidingapoolofcustoms officialsandtradefacilitationexperts." TheDevelopmentWorkingGroupalsoexpressedtheG20wouldwelcome"aninvitation fromtheAfricanUnionandtheAfricanDevelopmentBanktojointlyreviewprogressat theirannualmeeting." TheDeclarationcommittedtomaintainthelevelofsupportpledgedintheSeoul

Declaration,whichwastheaveragelevelofthe20062008period.Therewasalsoa commitmenttoimprovequalityandresults,butitisnotclearwhatismeantbyqualityor whethertheresultswillbemeasuredintermsofdevelopment,povertyreduction, domesticcapitalformation,orotherparameters. InitsreporttheDevelopmentWorkingGroupalsoreferredtotradefinance,mentioning thatitcontinuestobeproblematicformanycountriesandthatasignificantnumberof countrieshavenotsofarreceivedanytradefinancesupportfromtheMDBs.Thetwo mainrecommendationsmadeherewerefortheG20toconsiderfurtherhowbestto improvedata,includingwithregardtotheexistingdatabaseontradefinance,andto establishatradefinancefacilityattheAfricanDevelopmentBank. Tradeissueswerealsoaddressedinthesectionsdevotedtofoodsecurityandagriculture investment.TheDeclarationsaidthatmorestable,predictable,distortionfree,openand transparenttradingsystemallowsmoreinvestmentinagriculture.Thisisasurprising statementbecauseitfliesinthefaceofthewellknownrealityoftheneglectof agriculturalinvestmentthattookplacepreciselyinaperiodthattheWorldTrade Organizationwasestablishedandbeguntofunction(mid1990sandon).Italsoseems incompatiblewithotherpassagesintheDeclarationthatoffersupportforagricultureby smallholdersorsmallproducers,giventhat,whereapplied,tradeliberalizationin agriculturehasbeenassociatedwithdecreasedviabilitywhennotoutrightdismantlingof smallhoderagriculture. TheG20alsoagreedto"removefoodexportrestrictionsorextraordinarytaxesforfood purchasedfornoncommercialhumanitarianpurposesbytheWorldFoodProgramand agreednottoimposetheminthefuture,"encouragingadoptionofadeclarationbythe WTOatitsupcomingMinisterialConference. Commodityderivativesregulation,tradeandinvestment Thisyear,studiesfromtheInternationalMonetaryFundprovidingglobalandregional outlookshavestressedthecontinuedhighlevelofexposureofdevelopingcountriesto commoditypricefluctuationsandthechallengesthisposestotheirmacroeconomic stability.ThefindingsechoedpointsrepeatedlymadebytheInternationalWorkingGroup onTradeFinanceLinkagessuchasaStatementissuedin2009,precedingtheG20Seoul Summitlastyear,whichsaid:"Twothirdsofdevelopingcountriesarenetfoodimport dependentand,formanyofthem,excessivespeculationincommoditiesmarketsledto foodcrises.Inaddition,theabilityofalargenumberofcommodityexportingcountriesto usetradeforincreasingdomesticcapitalaccumulationhasbeenlimited."[4] Ifonecouldtakepricefluctuationsasan"actofGod,"therewouldprobablybemeritto anapproachlimitedtoamitigationoftheimpacts.Butthisisnotthecase.Theargument thatinthelastfewyearsspeculationoncommoditylinkedassetsinfinancialmarketshad astronginfluenceontherisesandfluctuationsoffood,oilandothercommodities'prices continuestogathersubstantialsupportinstudiesbyacademicandsomeregulators.[5]

Twotaskforcesthathadthechancetoaddressthisissue,setupbytheG20,however, cameupshortofastrongendorsementofthisthesis,andthecorrelativeneedtotake action. Oneofthereportswasentrustedtoataskforceofintergovernmentalorganizationsset upbytheG20aspartofitsDevelopmentActionPlanagreedattheSeoulSummitto "developoptionsforG20considerationonhowtobettermitigateandmanagetherisks associatedwiththepricevolatilityoffoodandotheragriculturecommodities."[6]Onthe issueoftheimpactoffinancialspeculationonpricevolatilitythereportgenerallystayed awayfromtakinganyposition.Itreferredtoanongoingdebateonwhetherspeculation stabilizesordestabilizesmarketsandtheneedforresearchtoclarifythesequestions.It onlyrecognizedexistenceofbroadagreementthatforagriculturalcommodityderivatives marketstofunctionwell"appropriateregulationneedstobeinplaceacrossallrelevant futuresexchangesandmarkets.Inparticular,thereisneedforgreatertransparencyabout transactionsacrossfuturesmarketsandespeciallyacrossoverthecounter(OTC)markets, wheretransactionstakeplaceofftheregulatedcommodityexchanges.Comprehensive tradingdataneedtobereportedtoenableregulatorsandparticipantstomonitor informationaboutthefrequencyandthevolumeoftransactionstounderstandwhatis drivingcommodityprices."[7] AnotherreportcamefromastudygroupsetupbytheG20inMarchofthisyearto understandtheevolutionanddriversofcommoditypricefluctuations,chairedbythe DeputyGovernoroftheCentralBankofJapan,Mr.HiroshiNakaso.[8]Thereport underscoredthegrowthofcommoditylinkedportfolioinvestmentssincethemid2000s andidentified"Indexinvestors,includingindexandotherdedicatedcommodityfunds"as importantnewentrantsintothemarketinthepastfewyears,alongsidehedgefunds, ExchangeTradedFundsponsorsandproprietarytradingdesksofcommercialbanks brokerdealersandtradingunitsoflargenonfinancialcorporate.[9] Fromtheperspectiveoftradeindevelopingcountries,thereporthadalsothemeritof inquiringintothemacroeconomicandtraderelatedimpactsofcommodityprice movements.Thestudyreferredtothe"Dutchdisease"dynamicthatmightbetriggeredin commodityexporters.Italsoaddressedtheinvestmenttradeinterphaseofthisproblem: "Higherpricevolatilityofproductioninputs(suchasenergyandmetals)andalarger uncertaintyaboutfuturepricelevelscouldhamperinvestmentinbothcommodity production...andinindustriesthatareheavilyreliantoncommodityinputs.Asa consequence,thecapitalstock(andpotentialoutput)maybelowerbothincommodity exportingandimportingcountries,impactingnegativelythelevelofeconomic activity."[10] Inlookingatmacroeconomicpolicyconsequences,theStudyGroupreferredtothe inflationaryimpactofhighercommoditypricesdirectlyaddingthat"theshareof commoditiesinconsumerpriceindicesapproximatedbyfoodandenergycomponents istypicallyhigherinEMEsandlowincomecountriesthaninadvancedeconomies."[11]It

statedthatadevelopingcountry'sattempttoprovideamacroeconomicpolicyresponse toinflationoriginatedinthatway,whenittightensmonetarypolicy,mayleadtoitsown problems."Higherinterestratescanencouragecapitalinflows,causingupwardpressure ontheexchangerateand,incertaincases,nurturedomesticassetpricebooms."[12] Unfortunatelythisisascloseasthereportgetstoarecognitionthattypicalinflation targetingapproachesdoaparticularlypoorjobinthesecasesortoendorsealternatives. Thefiscalimpactsofvolatilitywerealsoaddressed.Inadditiontothenowfamiliar reflectiononhowhigherimportpricesonfoodandenergysubsidiesorrevenuesderived fromthemaffectfiscalprospects,thereportdrawsthelinkbetweenvolatilityandfiscal managementindevelopingcountries."Fiscalvolatilityofcommoditypricesmayalso weakenfiscalpositionsofcommodityexportingcountriesbecauseadjustingfiscal expenditurestochangesinexternalenvironmentisinflexibleingeneral,"itsaid,while statingcommodityfundsmayofferasolution.[13] Whenitcomestothedriversofpricesinfinancialmarkets,however,theStudyGroup foundtheresultsofempiricalstudiesregardingtheimpactoffinancialinvestorsonthe level,volatilityandcorrelationofcommodityprices,"inconclusive,"thoughadmittingthat "agrowingbodyofresearchsupportstheviewthatfinancialinvestorshaveaffectedprice dynamicsovershorttimehorizons."[14]Lookingatthequestionofwhetherincreased levelsoffinancialinvestmentincommoditiesfuturesaffectspotprices,itstatedthat"(i) effectsthatthebehavioroffinancialinvestorsmayhaveon(nearterm)futuresmarkets arealsotransmittedtospotprices;and(ii)thatlargeandpersistentdeviationsoffutures pricesabovefundamentalscanbeexpectedtoleadtorisinginventories."[15] Inthelightofthelimitedbackingthatthereportsofferedforinterventionmeasures,one couldalmostcommendthattheG20inCanneswentasfarascallingformarketregulators andauthoritiestobe"grantedeffectiveinterventionpowerstoaddressdisorderly marketsandpreventmarketabuses."Therewas,further,adecisiontocallformarket regulatorsto"have,anduseformalpositionmanagementpowers,includingthepowerto setexantepositionlimits,...amongotherpowersofintervention." However,thekeyjurisdictions(USandEurope)couldbesaidtohaveformallycomplied withtherequirementtointroducepositionlimits.Yet,theweaknessoftheagreedlimitsis unlikelytosignificantlyaffectharmfulspeculation,provingthelimitedvaluethattheG20 agreementmayhave.[16] TheG20alsoendorsedasetofprinciplesfortheregulationandsupervisionofcommodity derivativesmarkets,issuedbyIOSCOlastSeptember.[17]Theseprinciplesfollowona previousreportdevelopedbyaTaskForceonCommodityFuturesofIOSCOlastyear whichfocusedactuallyonenhancingtransparencyincommoditymarkets.[18] Thatreport,initsownwords,believedthat"pricediscoveryinthefinancialcommodity markets,aswellasanalysisoftheinteractionsbetweenthefinancialandcashcommodity markets,shouldbeimprovedbypromotinggreatertransparencyacrossfutures,overthe

counter(OTC)derivativeandcashcommoditymarkets."[19]Soitdepartedfromthe assumptionthatwellfunctioningmarketswouldleadtolessvolatilityifonlygreater transparencywasachieved.Ontopofthatitalsoacknowledgedalackofjurisdictionby IOSCO(concernedwithsecuritiesmarkets)regardingphysicalcommoditymarkets.[20] TheG20AgricultureMinistersearlierthisyearattemptedtolaunchaninitiativethat wouldplugthisphysicalmarketsgap.TheAgriculturalMarketsInformationSystem(AMIS) followsonthefootstepsoftheJointOperationalDataInitiative(JODI)foroilmarkets. Observersare,however,skepticalaboutthefeasibilityofobtainingsuchdatagiventhe reluctancetobefacedfromsomecountriesand,inparticular,somelargecorporations,in additiontothelowlikelihoodthatjustincreasedtransparencywillstopmarketbehaviors thatleadtovolatility.[21]JODI,infact,hastenyearsofimplementationalreadyandlittle toshowforit.InastatementpreparedbeforetheG20Summit,theInternationalWorking GrouponTradeFinanceLinkagessaidthatsuchinitiatives,inordertowork,will"willneed additionalauthoritiestoensurethatcorporateownersofstockssupplyaccurateand completeinformationwhoseanonymityastocorporateinformationsourcecanbe guaranteedbyJODIandAMISofficials."[22] Theinfrastructureagenda WithintheDevelopmentActionPlan,theworkstreamoninfrastructureisdistinctlythe onethatreceivedmostattention.AHighLevelPanel,chairedbyMr.TidjaneThiam,was setuptoproviderecommendationstoit,andreportswererequestedfromthe MultilateralDevelopmentBanks.Giventheinfrastructuregapfacedbydeveloping countries,concentratingeffortsonhowtofilloutthatgapwasnotabadidea. ButasonecheckstherecommendationsultimatelyendorsedbyLeadersinCannes,itis hardtocontainasenseofuneaseaboutthedirectionbeingtaken. Thereare,firstly,twoconcernsnotjustlycoveredinthisarticlebutthatneedtobenoted. Oneisthehighlevelofsecrecyandlimitedornonexistentconsultationthatcharacterized theworkoftheHighLevelPanelandtheMultilateralDevelopmentBanks.Theotherhas todowiththelimitedambitionwithregardstopublicfundingcommitmentsthattheG20 showed.Themeasuresagreedmostlydealwithfacilitatinginformationsharing, preparation,capacitybuildinginregardstothepreparationofprojects.Effective utilizationofresourceswithintheexistingmultilateralandbilateralaidenvelopeisalso mentioned,butpledgesofnewpublicfundingcomingtosupportworkoninfrastructure arenowheretobeseen. Thisarticle,however,focusesonconcernsaroundthetradefinancedimensionofthe infrastructuremeasures,manyorientedtopromoteexportsinlowincomecountries. Whiletheinfrastructuregapisareality,thedebtsustainabilitypressuresthatdeveloping countriesfacearealsoareality.Inthiscontext,whentheoverridingconcernistocreate "bankable"projectsthatwillattractinvestors,thefearemergesthatmakingtheprojecta profitableonefortheinvestorsmaytrumpconsiderationsaboutthefinancial

justificationsforundertakingtheprojectorthesustainabilityofthedebt. Afterall,itisnotsolongagothattheIMFStaffwassayinginanotethat"LICsthatresort todebtfinancedinvestmentneedtostrengthentheircapacityfor"safeborrowing"so thatthescalingupofpublicinvestmentdoesnotjeopardizedebtsustainability."[23] Indeed,thedeterminationsondebtsustainabilityaregovernedbytheDebtSustainability Framework,atooladoptedin2005bytheWorldBankandInternationalMonetaryFund. InthereportaccompanyingtheDeclaration,theDevelopmentWorkingGroupexpressed supporttotheongoingworkbytheMDBsandtheIMFabout"theextenttowhichthe DebtSustainabilityFramework(DSF)retainsinappropriateconstraintstofinance infrastructureprojects." Tounderstandwhatthiscanleadtoitisimportanttokeepinmindthat,unlikeits precedingframework(thedebtsustainabilitymetricsoftheHeavilyIndebtedPoor CountriesInitiative),acentralfeatureoftheDebtSustainabilityFrameworkisits flexibility.[24]Theideaofacountrybycountryapproachtodebtsustainabilitywasa soundone,butitcouldbeseenearlyonthatthelargerspacegiventostaffjudgmentsin implementationoftheDSFguidelinesriskedeasilyaccommodatingthepassingof unsustainabledebtassustainable.[25]Further,holdingtheframeworkaccountablefor failurestopreventunsustainabledebtswastobecomenearlyimpossible. Thiswasconfirmedwhen,in2009,aftertheonsetofthecrisis,revisionswereintroduced totheDebtSustainabilityFramework.Therevisionswereallinthedirectionofenabling countriestotakemoredebton.[26] Thisisnottosaythatcertainchangesmadein2009arenot,inthetheorybehindthem, desirable.Oneofthereformsof2009soughttobettertakeintoaccounttheinvestment growtheffectswhendebtisundertakenforinvestmentpurposes,aswouldbethecasein infrastructureprojects.And,totheextentthatthiswouldenableabetterfactoringinof theactualimprovementsinrepaymentcapabilitiesthataprojectcangenerate,the changewouldactuallybepositive. Theskepticalviewexpressedabovestemsratherfromempiricalobservationoftherecord oftheinternationalfinancialinstitutions.Theirdebtsustainabilityprojectionshave systematicallyshownexcessoptimism.Addingtothatthepressureandthepoliticalsignal givenbytheG20topromotebiginfrastructurelendingleavesthosewhowouldliketosee arealistic,objectiveimplementationoftheinvestmentgrowthconsiderationinassessing sustainabilitywithalmostnothingtogoon. Aninterestingparallelcanbedrawnbetweenthecurrentsituationandthebirthofthe DebtSustainabilityFramework.AnalysisbythestaffoftheWorldBankatthetimeshowed thatlowerdebtthresholdswouldhavebeendesirable,buttheywouldhaverequired concessionalfundingcommitmentsthatthedonorswerenotreadytomake.SotheDSF's flexibilitywasfunctionaltotheneedtoprovideacoverof"sustainability"tosituations wheredebtwasunsustainablebuttherewasnopoliticalwilltomakethecommitments

thattruesustainabilitywoulddemand.[27] Thatwasthen.Now,again,thereisariskthattheDSFbuiltinflexibilities(stretched throughthe"furtherwork"thattheG20entrustedtoMDBsandtheIMF)couldbecome functionaltoprovidethissamecoverof"sustainability."Thedifferencethistimeisthat, ratherthanaccommodatingthelimitedgrantresourceenvelope(orinadditiontothat), theimperativewouldbetoensureprivatecreditorsorinvestorscanpreserveacertain levelofreturnontheirprojects. ThesameIMFstaffnotequotedabovesaysthat"Toensurerepaymentforpublicdebt financedinvestment,LICgovernmentsmustalsohavethecapacitytocapturethefiscal dividends,whichdependsprimarilyonthequalityofrevenuepolicyand administration."[28] Butitispreciselythisaspectthatentersintostarkconflictwiththeagendaofprivate investorsscrutinizingtheprofitabilityoftheprojects.Thisisbecausetheneedfor investorstogetrepaidalsoentersintoconflictwithotherlegitimateobjectivesoffiscal policysuchasaprogressiveincomedistribution.Inextremesituations,therearecases wheretheinvestororcreditors'prioritiesmightleadtoagovernmentringfencingoffiscal revenue.Thecasesofcountriesthatmortgagednaturalresourcesfordebtpaymentsarea caseinpoint. Notonlythecapabilitytoattractinvestorsmightdependonlowerfiscaldividends,but governments(especiallyinimpoverishedcountries)haveoftenfoundthattheonlywayto attractprivateinvestorsistosaddlethemselveswiththebitterpartofthedeal.Sothey offercontingentliabilitiesandotherguarantees.Thesekickin,bydefinition,insituations oflowgrowthorrecession,thusbuildingaprocyclicalcomponentintoanyshockthe borrowingcountrymightgothrough. OneofthemeasuresthattheHighLevelPanelsuggestsfor"diversifyingthesourcesof financeforinfrastructure"isthedevelopmentoflocalcurrencydebtmarkets.Thisisa superiorformoffinancingoverborrowinginforeigncurrencybecauseitsuppresses currencymismatchesthatcanbethesourceofexpandeddebtrisks.Thequestionis whetherinvestorswillbeinterestedinsuchinstrumentswithoutadditionalguaranteesor higherinterestratestocompensatefortheextrarisk.Besidesthat,domesticcurrency debt,ifthecreditorsaredomestic,isnotexemptofproblems.Toquoteeconomist MatthiasRau, "Ifyouissuedomesticdebtchieflytodomesticrecipients,thisissueismainlyaninternal resourcetransferandthereisnoadditionalityasinthecasewithexternalfinancing.Thus, evenifyoudonothaveacurrencymismatch,youcouldstillhavea"materialmismatch", i.e.domesticdebtcouldcrowdoutdomesticresources.Thereissomeempiricalresearch thatsuggeststhatthepositiveimpactsofmarketcreationthatIjustmentionedbeforeare aboutthesamesizeasthecrowdingouteffect."[29] Equitytypeformsoffinancingmightbepreferablefromtheperspectiveoftheborrowing

country,anditisunclearwhy,iftheprojectsarereallyconsidered"transformational"and areexpectedtoproduceextraordinaryhighgrowth,investorsshouldrejectsuchformsof financing(or,forinstance,Growthlinkedbonds,aproposalnotmentionedbytheHigh LevelPanel,either). TheHighLevelPanelalsomentionstheuseofinfrastructurebondsasrepofundingby centralbanks.Butifwhatithasinmindhereistherepofundingwiththelocalcentral bankoftheborrowingcountry,thenitisnotclearwhyasimilararrangementcouldnotbe inplacefordirectpublicinvestmentbythegovernmentinquestion,ratherthan subsidizingborrowingfromprivatesourceswithit. Privateinvestmentanddomesticresourcemobilization OneofthetasksundertakenbytheG20DevelopmentWorkingGroupinSeoulwasto developguidelinestodeterminetheeconomicvalueaddedofprivateinvestments.The WorkingGroup(thereisnoreferencetothisintheLeaders'Declarationitself),welcomed thesetofpreliminaryindicatorsdevelopedbyInternationalOrganizationstomeasurethe economicvalueaddedandjobcreationofprivateinvestmentanddecideditwould"field testtheseindicatorsinatleastsixselfselectedcountriesonavoluntarybasis,leveraging possiblesynergieswiththepilotingofthehumanresourcedevelopmentindicators." Combattingthetransferpricingpracticesthatsomuchrevenuecosttodeveloping countrieswasamongtheissuescoveredintheDevelopmentWorkingGroup'sActionPlan adoptedlastyear.ButtheCannesSummitfailedtobringanythingnewonthematter.The Leadersurgedmultinationalcompaniesto"improvetransparencyandfullcompliance withapplicabletaxlaws"andwelcomed"therecentlylaunchedcoordinatedprogramme byinternationalandregionalorganisationstoassistdevelopingcountriesinthedrafting andapplicationoftheirtransferpricinglegislation,onademandledbasis." ForanassessmentofotheraspectsoftheG20CannesSummitoutcomesvisit https://www.coc.org/rbw/comebanggonewhimperg20cannessummitparti november2011 andhttps://www.coc.org/rbw/comebanggonewhimperg20cannessummitpartii december2011
[1]ActionAidInternationalandPublicCitizen2006.TheWTO'sEmptyhongKong"DevelopmentPackage": HowtheWorldTradeOrganization's97%DutyFreeProposalCouldLeavePoorCountriesWorseOff. [2]Berensmann,Kathrin2011.Tradepolicyafterthefinancialcrisis,inD+C,2011/04,Tribune,Page166167. [3]Ib. [4]InternationalWorkingGrouponTradeFinanceLinkages2010.StatementonTradeFinanceLinkagesfor SeoulG20Summit.November.

[5]See,forinstance,CommodityMarketsOversightCoalition2011.EvidenceontheImpactofCommodity SpeculationByAcademics,AnalystsandPublicInstitutions.February23. [6] FAO, IFAD, IMF,OECD, UNCTAD, and other agencies 2011. Price Volatility in Food and Agricultural Markets: Policy Responses. Policy Report. June 2. [7] Ib. [8] G20 Study Group on Commodities 2011. Report. November. [9] Ib. [10]Ib. [11]Ib. [12]Ib. [13]Ib. [14] Ib. [15]Ib. [16]EventheweakpositionlimitsadoptedbytheCFTCintheUSfaceseriousthreatsinlitigationthatis beingcarriedouttoleavethemwithouteffect. [17]IOSCO2011.PrinciplesfortheRegulationandSupervisionofCommodityDerivativesMarkets.Final Report.September. [18]IOSCOTechnicalCommittee2010.TaskForceonCommodityMarketsFuturesReporttotheG20. November. [19]Ib. [20]Ib.,notingthat"AlthoughtheTaskForceisconstrainedinitsabilitytoadvancegreatertransparencyof underlyingphysicalmarkettransactiondataduetolackofjurisdiction,theTaskForcereiteratesthat informationabouttheunderlyingcommodityiskeyindeedcriticalforthesatisfactoryfunctioningof financialmarketsandreliablepricediscovery." [21]Clapp,JenniferandSarahMartin2011.TheG20AgriculturalActionPlan:ChangingtheCourseof Capitalism?TripleCrisisBlog,athttp://triplecrisis.com/g20agriculturalactionplan [22]InternationalWorkingGrouponTradeFinanceLinkages2011.TradeFinanceLinkagesAnAssessment ofSelectedIssuesonG20SummitAgenda(availableathttps://www.coc.org/rbw/tradefinancelinkages demandsg20leadersmeetingcannesoctober2011) [23]IMFStaff2010.ReachingtheMDGs:MacroeconomicProspectsandChallengesinLowIncome Countries.BackgroundNotebyIMFStafffortheUnitedNationsMDGSummit.September. [24]UndertheHIPCInitiative,providedsomegeneraleligibilityrequirementsweremet,countriesfound aboveacertaindebttoexportsratioordebttoGDPanddebttorevenueratiowereautomaticallydeemed tobeinasituationofunsustainabledebt. [25]ForfurtherdevelopmentonthedifferencesbetweentheHIPCandtheDSFandthewidespaceforcase bycasejudgmentsinthelatterseeCaliari,Aldo2006.TheNewIMF/WorldBankDebtSustainability Framework:AHumanDevelopmentAssessment.CIDSE.April. [26]IMF2009.ExecutiveBoardReviewstheLowIncomeCountryDebtSustainabilityFrameworkandAdopts aMoreFlexiblePolicyonDebtLimitsinIMFSupportedPrograms.PublicInformationNotice(PIN)No. 09/113.September9. [27]SeeIMF/IDA(2006).ReviewofLowIncomeCountriesDebtSustainabilityFrameworkandImplications oftheMDRI.PreparedbytheStaffoftheWorldBankandtheIMF.ApprovedbyDannyLeipzigerandMark Allen,March("loweringthresholdscouldriskdeprivingcountriesoffinancing(...).NonMDRIcountriesin particularwouldneedadditionalgranttoavoidasharpreductioninaidflows.Thiswouldbecostlyfor donors,incudingIDA") [28]IMFStaff2010. [29]Rau,Matthias2010.InterventioninCaliari,Aldo(Ed.),DebtandTrade:MakingLinkagesforthe PromotionofDevelopment.CenterofConcernandSouthCenter.

2)DevelopingcountryissuesintransferpricingReportfromworkshopnowavailable OnJune78,2011,CenterofConcerncosponsored,togetherwithFESNewYorkOffice, UNDESAFinancingforDevelopmentOfficeandChristianAid,ameetingcalledInformal Discussionon"PracticalTransferPricingIssuesforDevelopingCountries.Amongothers, themeetingswereattendedbydelegatesfromUNMissions,officialsfromtaxauthorities ofdevelopingcountries,expertsandpractitioners. Thereportfromthistwodayconferencecannowbedownloadedat www.coc.org/node/6714 3)Sovereigndebtrestructuringandtradeandinvestmenttreaties SeebelowabstractandlinktoapaperbyKevinGallagher:"TheNewVultureCulture: Sovereigndebtrestructuringandtradeandinvestmenttreaties"(issuedasNo.02/2011of theIDEASWorkingPaperSeries). Abstract Theglobalcommunitystilllacksaregimeforsovereigndebtrestructuring.Butithasbeen oftenoverlookedthatthedefinitionofacoveredinvestmentwithininternationaltrade andinvestmentagreementsoftenincludessovereigndebt.Thereisthusincreasing concernthatinternationalinvestmentagreementsmaybecomea"court"forsovereign workoutsbydefault.Inthiscontext,thispaperanalyestheextenttowhichinvestment provisionsinvarioustreatiesmayhindertheabilityofnationsandprivatecreditorsto comprehensivelynegotiatesovereigndebtrestructuringswhenadebtornationhas defaultedorisclosetodefaultonitsgovernmentdebt.Itisfoundthatthetreatmentof sovereigndebtvariesconsiderablyintermsofstrengthandapplicabilityacrossthe spectrumofthethousandsoftradeandinvestmenttreatiesintheworldeconomy.Itis alsofoundthatmosttreatiesmayrestricttheabilitytorestructuredebtinthewakeofa financialcrisis.Itisthereforeconcludedthatthesetreatiescouldunderminetheabilityof nationstorecoverfromfinancialcrisesandthusbroadentheimpactofsuchcrises. Fullpaperisavailableathttp://ideaswebsite.org/working/jul2011/wp04_07_2011.htm

4)Indexinvestmentandfinancializationofcommodities Pleasefindbelowabstractandlinktoapaper"Indexinvestmentandfinancializationof commodities"byKeTangandWeiXiong. Abstract

Thispaperfindsthatconcurrentwiththerapidgrowingindexinvestmentincommodities arketssinceearly2000s,futurespricesofnonenergycommoditiesintheUSbecame increasinglycorrelatedwithoilandthistrendwassignificantlymorepronouncedfor commoditiesinthetwopopularSPGSCIandDJUBScommodityindices.Thisfinding reflectsafinancializationprocessofcommoditiesmarketsandhelpsexplainthelargely increasedpricevolatilityofnonenergycommoditiesaround2008. Fullpaperisavailableathttp://www.princeton.edu/~wxiong/papers/commodity.pdf 5)UNCTADXIIIConferenceAccreditationnowopen AccreditationtotheUNCTADXIIIConference,tobeheldinDoha,Qatar,April2126, 2012,isnowopen. PleasenotethatonlyCSOswithobserverstatusandthosewhowillbeaccreditedto UNCTADXIIIwillbeabletocontributeandparticipatetothepreparatoryhearings,the CivilSocietyForumandtheothereventsattheConferenceitselfinDoha. ToapplyforaccreditationtoUNCTADXIIIanditspreparatoryactivities,pleasewriteto Pasquale.Madonna@unctad.org,torequestaquestionnaire.Thecompletequestionnaire, withacopyoftherequestedsupportingdocumentation,shouldbereceivedbytheCSO Unitassoonaspossibleandnolaterthan15January2012.
More information on the UNCTAD XIII Conference can be found at http://www.unctad.org/Templates/Meeting.asp?intItemID=6084&lang=1

Aldo Caliari Director Rethinking Bretton Woods Project Center of Concern