Peterson Institute for International Economics Update Newsletter
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PIIE Update Newsletter
June 12, 2013

"Washington's premier think tank on the global economy"
—The Washington Post
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  Live Webcast
Payoff from the World Trade Agenda

Keynote: Robert B. Zoellick, Peterson Institute for International Economics
Friday, June 14, 2013
10:30 a.m.–1:00 p.m. (EDT)
  The Peterson Institute and the International Chamber of Commerce (ICC) will webcast the launch of the PIIE–ICC Foundation study, "Payoff from the World Trade Agenda," at a conference on June 14. Robert B. Zoellick, former president of the World Bank and former US Trade Representative, will present the keynote speech.

The report, written by Gary Clyde Hufbauer and Jeffrey J. Schott and produced in partnership with the United States Council for International Business, takes a fresh look at the Doha Round trade negotiations and assesses the potential payoffs from seven agreements that could be revived and advanced in 2013 and entered into force as early as 2015. If all seven agreements were ratified, global gains could be substantial: export gains over $2 trillion, 34 million jobs supported, and global GDP gains of $2 trillion.

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>> More information

China and America Should Strike a Grand Bargain

Arvind Subramanian
Published in the Financial Times
  Arvind Subramanian Economic skirmishes between China and the United States threaten the viability of the World Trade Organization (WTO), the World Bank, and the International Monetary Fund (IMF). The two countries should strive to preserve the open, rules-based multilateral economic system by striking a grand bargain in which Washington would give up power in these institutions in return for China taking on greater global leadership to preserve the system's real purpose—free and fair globalization.

>> Read full op-ed
>> See related Policy Brief
>> See related event

The Great Powers' Relationship Hinges on the Pacific

Robert B. Zoellick
Published in the Financial Times
  Robert B. Zoellick The summit meeting between President Barack Obama and Chinese President Xi Jinping, which took place June 8–9 at a desert estate in California, could define the strategic relationship between the two most powerful countries in the world for years to come. Ahead of the meeting, Robert B. Zoellick called on the two presidents to recognize that their relationship cannot just rely on economic interdependence to overcome 21st century problems and threats. The leaders need to consider how economics and security interconnect and move beyond the standard exchanges of the past to reconcile their competing and conflicting strategies.

>> Read full op-ed

  Working Paper
Peers and Tiers and US High-Tech Export Controls: A New Approach to Estimating Export Shortfalls

Asha Sundaram and J. David Richardson
  Sundaram and Richardson employ a new approach to quantifying the trade impact of high-technology export controls imposed because of national security concerns. Their "difference-in-difference, gravity-equation" method results in new estimates of the effect of controls on high-tech export performance of the United States, and of traditional and emerging rival exporters. Examining seven high-tech sectors over 11 years, the authors find that the United States under-exports to countries that represent a high security threat. More surprisingly, the United States over-exports to medium-threat countries and also to a large trusted group of importers, both relative to a norm (default group) of importers. These findings suggest high substitutability between export suppliers and export markets for high-tech products. The study underlines the importance of American efforts to reform the export control regime.

>> Read full working paper [pdf]

Peterson Perspectives Interviews

audio  New Dangers of a Debt Ceiling Confrontation
Simon Johnson says the economy is growing but that another debt ceiling battle later in 2013 would disrupt the progress.

audio  Lingering Prospects for US Financial Reform
Simon Johnson says that despite a push back from the financial industry, Congress is taking a close look at increasing capital requirements for banks.

audio  Market Volatility in Japan: A Verdict on Abenomics?
Adam S. Posen says the market turmoil in Japan may actually be a sign that Prime Minister Abe's economic policies are working.

Recent Blog Posts

RealTime Economic Issues Watch   China Economic Watch    North Korea:  Witness to Transformation
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Latvia Is Approved by the European Union for Euro Adoption

The Sunnylands Summit: Power for Purpose

Managing International Capital Flows: The IMF's "Institutional View" Falls Short

The IMF Revisits Sovereign Debt Restructuring, Not the SDRM

Self-Defeating Austerity and the Improved US Fiscal Outlook
  President Xi's Americas Tour Reveals Economic Leverage as a Driver of China's Foreign Affairs

China's Never-Ending Stimulus

Getting Used to Slower Growth in China: Quality over Quantity

ASEAN: A Hot Destination for China's Outbound Investment

The Role of Trust Companies in China's Recent Credit Growth
  Lewis and Hansen on Yongbyon

Slave to the Blog: the Burden of Cool Edition

The Obama-Xi Summit

Pyongyang Racer

Sources: The Center for Economic Sanctions and Reform

PIIE Noted in the News and on the Web

Fed Tapering a Big Issue for the World
While in Singapore Robert B. Zoellick joins CNBC to discuss the role of emerging markets in the international economy, and what to expect from a tapering of quantitative easing by the US Federal Reserve.

Wall Street Journal
Xi and Obama Meet in Sunnylands: What's at Stake?
Nicholas R. Lardy tells the Wall Street Journal that he hopes Presidents Obama and Xi focus on defining how the US-China relationship works at the strategic level, leaving the list of specific issues for the Strategic and Economic Dialogue.

Preview of Our Next Issue

Gazprom's Demise Could Topple Putin
Published in Bloomberg
Anders Åslund

The Danger of Politicized Foreign Investment Reviews
Published in the Hill
Daniel H. Rosen and Thilo Hanemann

In This Issue

Recent Event
Arvind Subramanian Preserving the Open Global Economic System: A Strategic Blueprint for China and the United States

Arvind Subramanian proposes China and the United States strike a bargain to preserve an open, rules-based, multilateral economic system.

Featured Book
Figuring Out the Doha Round Figuring Out the Doha Round

Gary Clyde Hufbauer
Jeffrey J. Schott
Woan Foong Wong

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