NEW YORK

2020NHSMUN

UNCTADUnited Nations Conference on Trade & Development

Background Guide

Email: info@imuna.org

Phone: +1 (212) 652-9992

Web: www.nhsmun.org

Delegates,

Welcome to NHSMUN 2020 and the United Nations Conference on Trade and Development (UNCTAD)! My name is Casey Collins and I am the Session I Director of UNCTAD. I am incred-ibly excited for the opportunity to work with each of you!

This is my second year on NHSMUN staff and my fifth year attending the conference. I was the Session I Director of UNPBC for NHSMUN 2019, and in high school, I was a delegate in SO-CHUM and UNDP. Every NHSMUN that I have attended has been an amazing experience, and I am excited for another exceptional conference this year. Outside of Model UN, I am a junior at the University of South Carolina Honors College and am pursuing a double major in international business and finance. Beginning in January, I will be participating in a two-semester study abroad program at Universidad de Chile in Santiago. Outside of my course requirements, I enjoy working as a research assistant within UofSC’s International Business Department, passionately debating political issues, and discovering riveting biographies and documentaries.

My co-director, Margot Powers, and I are eagerly anticipating the work that you all will accomplish in the coming months and we hope that this guide will prove useful to you as you begin to research the topics that we have selected. Topic A, “Reducing Capital Flight in African Countries,” is a crip-pling issue that places severe constraints on the economic potential of African states and directly subverts the efficiency and effectiveness of development programs and aid across the continent. In order to reverse some of the negative effects of capital flight, it is crucial that delegates consider the economic origins of the issue, as well as the most appropriate coordination of regional and global responses to the crisis in Africa and the effects worldwide. Topic B, “The Effects of Increasing Protectionism in Global Trade,” is also an issue of significant concern for the global community that has been steadily gaining publicity in recent months. When researching and responding to this topic, delegates should consider the strong positions that many countries take on the issue of protectionism and use those positions to formulate responses and solutions to the issue. With both Topic A and Topic B, delegates should also pay close attention to UNCTAD’s mandate and main-tain a strong focus on international collaboration and sustainable development.

Margot and I hope that the information contained in this background guide will prove useful to you as you learn more about each of the topics. Please understand that this background guide should only be an initial step taken toward understanding these topics, and I am excited to see what new information you will bring to the table as your research and preparation continues. We would love to hear from you, so please reach out to us at any time with any questions, comments, or concerns that you may have!

Best of luck with your research, and I look forward to meeting you all soon!

Casey Collinscasey.collins@imuna.orgUnited Nations Conference on Trade and DevelopmentSession I

Secretary-GeneralVijittra Puckdee

Director-GeneralAlthea Turley

Chiefs of StaffAlex Burr

Walker Heintz

Delegate ExperienceLuis GonzálezMerve Karakas

Domestic PartnershipsMaura Goss

Odion Ovbiagele

Global PartnershipsRenata Koch

Salmaan Rashiq

Internal AffairsLia Lee

Natalie O’Dell

Under-Secretaries-General

Michael BeeliJill Bendlak

Rose BlackwellAnnica DenktasRahul FrancisOmar Mufti

Jonathan PackerAkanksha Sancheti

John WoodAlisa Wong

Email: info@imuna.org

Phone: +1 (212) 652-9992

Web: www.nhsmun.org

Delegates,

I am honored and excited to present the background guide for the UN Conference on Trade and Development (UNCTAD) at NHSMUN 2020. My name is Margot Powers and I am the Director for Session II of UNCTAD. Casey Collins, the Director for Session I, and I hope that you will find this guide both comprehensive and that it will serve as a helpful starting point as you delve into these topics. But first, I would like to introduce myself.

NHSMUN 2020 will be my first year at NHSMUN ever. I am thrilled to be joining this amazing community and cannot wait to work with all of you in March. I am a junior at the University of Massachusetts Amherst pursuing a double major in political science and geography, with minors in French and Russian. Outside of class, I am heavily involved with my collegiate model UN team and have staffed MinuteMUN, our conference for high school students, for the past two years as a vice-chair to a Joint Crisis Committee and a chair for the UN Office for Outer Space Affairs. I am also passionate about languages and am a translator for my university’s newspaper, the Massachusetts Daily Collegian, and also a member of the Russian Club. This fall, I am studying Political Science in Brussels, Belgium at the Université Libre de Bruxelles.

Casey and I wanted to present topics that were original and unique while also being relevant to today’s issues of trade and development, which is why we are proud to present delegates with these topics. Topic A, “Reducing Capital Flight from Africa,” discusses the loss of capital in African economies to offshore tax havens and international banks. This issue not only harms the populace of the affected countries, but also prevents these economies from developing. Topic B, “The Ef-fects of Increasing Protectionism in Global Trade,” presents the dilemma of trade wars and grow-ing protectionism across the world. Protectionism poses a threat to UNCTAD’s goal of increased free trade and can harm civilians by reducing access to necessary goods. These two topics are worldwide issues and fit UNCTAD’s mission of furthering economic development in lesser devel-oped countries and expanding trade accessibility. Casey and I look forward to seeing the innovative resolutions and solutions that you will create to address these topics.

Please keep in mind that this background guide is to be used to help you begin your research. As such, it should answer your initial questions and inspire you to ask more. I cannot wait to see what new information and expertise you will bring to this committee. If you have any questions, com-ments, or concerns, please do not hesitate to reach out to Casey and me; we are more than happy to help!

Happy researching, and I look forward to seeing you all in March!

Margot Powersmargot.powers@imuna.orgUnited Nations Conference on Trade and DevelopmentSession II

Secretary-GeneralVijittra Puckdee

Director-GeneralAlthea Turley

Chiefs of StaffAlex Burr

Walker Heintz

Delegate ExperienceLuis GonzálezMerve Karakas

Domestic PartnershipsMaura Goss

Odion Ovbiagele

Global PartnershipsRenata Koch

Salmaan Rashiq

Internal AffairsLia Lee

Natalie O’Dell

Under-Secretaries-General

Michael BeeliJill Bendlak

Rose BlackwellAnnica DenktasRahul FrancisOmar Mufti

Jonathan PackerAkanksha Sancheti

John WoodAlisa Wong

4| UNCTADTAble of CoNTeNTs

Table of Contents

Background Guide 1

A Note on the NHSMUN Difference 5

A Note on Research and Preparation 7

Committee History 8

Simulation 10

Reducing Offshore Capital (Capital Flight) in African Countries 11

Introduction 12

History and Description of the Issue 13

Current Status 20

Bloc Analysis 23

Committee Mission 25

The Effects of Increasing Protectionism in Global Trade 27

Introduction 28

History and Description of the Issue 28

Current Status 37

Bloc Analysis 41

Committee Mission 46

Research and Preparation Questions 48

Important Documents 50

Works Cited 52

|5UNCTADA NoTe oN The NhsMUN DiffereNCe

A Note on the NHSMUN Difference

Esteemed Faculty and Delegates,

Welcome to NHSMUN 2020! My name is Althea Turley and I am this year’s Director-General. Thank you for choosing to attend NHSMUN, the world’s largest Model United Nations conference for secondary school students. We are thrilled to welcome you to New York City in March!

As a space for collaboration, consensus, and compromise, NHSMUN strives to help transform today’s brightest thinkers into tomorrow’s leaders. Our organization provides a uniquely tailored experience for all in attendance through innovative and acces-sible programming. We believe that an emphasis on education through simulation is paramount to the Model UN experience and this idea permeates throughout NHSMUN.

Debate founded on strong knowledge: With knowledgeable staff members and delegates from over 70 countries, NHSMUN can facilitate an enriching experience reliant on substantively rigorous debate. To ensure this high quality of debate, our staff members produce extremely detailed and comprehensive topic overviews (like the one below) to prepare delegates for the com-plexities and nuances inherent in global issues. This process takes over six months, during which the Directors who lead our committees develop their topics with the valuable input of expert contributors. Because these topics are always changing and evolving, NHSMUN also produces update papers that are intended to bridge the gap of time between when the background guides are published and when committee starts in March. As such, this guide is designed to be a launching point from which delegates should delve further into their topics.

Extremely prepared and engaged staff: The detailed knowledge that our directors provide in this background guide through diligent research is aimed at spurring critical thought within delegates at NHSMUN. Prior to the conference, our Directors and Assistant Directors are trained rigorously through copious hours of both virtual and in-person exercises and workshops in an effort to provide the best conference experience possible. Beyond this, our Directors and Assistant Directors read every posi-tion paper submitted to NHSMUN and provide thoughtful insight on those submitted by the feedback deadline. Our staff aims not only to tailor the committee experience to delegates’ reflections and research but also to facilitate an environment where all delegates’ thoughts can be heard.

Emphasis on participation: The UN relies on the voices of all of its Member States to create resolutions most likely to make a dramatic impact on the world. That is our philosophy at NHSMUN too. We believe that in order to properly delve into an issue and produce fruitful debate, it is crucial to focus the entire energy and attention of the room on the topic at hand. Our Rules of Procedure and our staff are focused on making every voice in the committee heard, regardless of each delegate’s country as-signment or skill level. However, unlike many other conferences, we also emphasize delegate participation after the conference. MUN delegates are well researched and aware of the UN’s priorities and they can serve as the vanguard for action on the Sustain-able Development Goals (SDGs). Therefore, we are proud to also connect students with other action-oriented organizations at the conference to encourage further work on the topics.

Focused committee time: NHSMUN prohibits the use of any electronic devices during committee sessions. We feel strongly that face-to-face interpersonal connections during debate are critical to producing superior committee experiences and allow for the free flow of ideas. Ensuring a no-technology policy is also a way to guarantee that every delegate has an equal opportunity to succeed in committee. We staff a very dedicated team in our office who type up and format draft resolutions and working papers so that committee time can be focused on communication and collaboration. Please note that the dais is permitted a laptop to communicate with members of Senior Staff and for other administrative needs.

6| UNCTADA NoTe oN The NhsMUN DiffereNCe

Educational emphasis, even for awards: At the heart of NHSMUN lies education and compromise. As such, when NHSMUN does distribute awards, we de-emphasize their importance in comparison to the educational value of Model UN as an activity. NHSMUN seeks to reward schools whose students excel in the arts of compromise and diplomacy. More importantly, we seek to develop an environment in which delegates can employ their critical thought processes and share ideas with their counterparts from around the world. We always prioritize a dedication to teamwork and encourage our delegates to engage with others in a diplomatic and inclusive manner. In particular, our daises look for and promote constructive leadership that strives towards consensus, as delegates do in the United Nations.

Realism and accuracy: Although a perfect simulation of the UN is never possible, we believe that one of the core educational responsibilities of MUN conferences is to educate students about how the UN System works. Each NHSMUN committee is a simulation of a real deliberative body so that delegates can research what their country has actually said in the committee. Our topics are chosen from the issues currently on the agenda of that committee (except historical committees, which take topics from the appropriate time period). This creates incredible opportunities for our delegates to do first-hand research by reading the actual statements their country has made and the resolutions they have supported We also incorporate real UN and NGO experts into each committee through our committee speakers program and arrange for meetings between students and the actual UN Permanent Mission of the country they are representing. No other conference goes so far to deeply immerse students into the UN System.

As always, I welcome any questions or concerns about the substantive program at NHSMUN 2020 and would be happy to dis-cuss NHSMUN pedagogy with faculty or delegates.

Delegates, it is my sincerest hope that your time at NHSMUN will be thought-provoking and stimulating. NHSMUN is an incredible time to learn, grow, and embrace new opportunities. I look forward to seeing you work both as students and global citizens at the conference.

Best,

Althea Turley Director-General

|7UNCTADA NoTe oN reseArCh AND PrePArATioN

A Note on Research and Preparation

Delegate research and preparation is a critical element of attending NHSMUN and enjoying the conference’s intellectual and cosmopolitan perspective. We have provided this Background Guide to introduce the topics that will be discussed in your com-mittee. This document is designed to give you a description of the committee’s mandate and the topics on its agenda. We do not intend to represent exhaustive research on every facet of the topics. We encourage and expect each of you to critically explore the selected topics and be able to identify and analyze their intricacies upon arrival to NHSMUN in March. Delegates must be prepared to intelligently utilize your knowledge and apply it to your country’s unique policy.

The task of preparing for the conference can be challenging, but to assist delegates, we have updated our Beginner Delegate Guide and Advanced Delegate Guide. In particular, these guides contain more detailed instructions on how to prepare a position paper and excellent sources that delegates can use for research. Use these resources to your advantage—they can help transform a sometimes-overwhelming task into what it should be: an engaging, interesting, and rewarding experience.

An essential part of representing a state in an international body is the ability to articulate a given state’s views in writing. Ac-cordingly, NHSMUN requires each delegation (the one or two delegates representing a country in a committee) to write a posi-tion paper for both topics on the committee’s agenda. In delegations with two students, we strongly encourage each student to participate in the research for both topics, to ensure that both students are prepared to debate no matter what topic is selected first. More information about how to write and format position papers can be found in the NHSMUN Research Guide. To sum-marize, position papers should be structured into three sections, described below.

I: Topic Background – This section should describe the history of the topic as it would be described by the delegate’s coun-try. Delegates do not need to give an exhaustive account of the topic background, but rather focus on the details that are most important to the delegation’s policy and proposed solutions.

II: Country Policy – This section should discuss the delegation’s policy regarding the topic. Each paper should state the policy in plain terms and include the relevant statements, statistics, and research that support the effectiveness of the policy. Compari-sons with other global issues are also appropriate here.

III. Proposed Solutions – This section should detail the delegation’s proposed solutions to address the topic. Descriptions of each solution should be thorough. Each idea should clearly connect to the specific problem it aims to solve and identify potential obstacles to implementation and how they can be avoided. The solution should be a natural extension of the country’s policy.

Each topic’s position paper should be no more than 10 pages long double-spaced with standard margins and font size. We recommend 2-4 pages per topic as a suitable length. The paper must be written from the perspective of the country you are representing at NHSMUN 2020 and should articulate the policies you will espouse at the conference.

Each delegation is responsible for sending a copy of its papers to their committee Directors via myDais on or before 14 Febru-ary 2020. If a delegate wishes to receive detailed feedback from the committee’s dais, a position must be submitted on or before 24 January 2020. The papers received by this earlier deadline will be reviewed by the dais of each committee and returned prior to your arrival at the conference.

Complete instructions for how to submit position papers will be sent to faculty advisers via the email submitted at registration. If delegations are unable to submit their position papers on time, they should contact us at info@imuna.org as soon as possible.

Delegations that do not submit position papers to directors will be ineligible for awards.

8| UNCTADCoMMiTTee hisTory

Committee History

The United Nations Conference on Trade and Development was founded on 30 December 1964 by the General Assembly, with headquarters then and now in Geneva, Switzerland. Its creation envisioned a forum for developing countries to discuss economic development, and was a direct response to threefold concerns that many Least Developed Countries (LDCs) had: the institutions and policies designed to deal with international finance and trade, the presence and expansion of multinational cor-porations, and the discrepancies between developed and developing UN member states.1 Such concerns were warranted by the seeming oversight of international organizations and conventions regarding the general needs of LDCs and, oftentimes, their post-war reconstruction efforts. Thus, what was originally a one-off conference in Geneva in 1964 was successfully petitioned by the LDCs to become a permanent UN organ with full secretariat structure and quadrennial conferences.2 Additionally, the conference created the G-77 political bloc, today an 134-member group of developing countries whose mandate focuses on as-serting and maintaining their independence while also defending their economic interests.3

Today, UNCTAD bears three main functions: (1) to provide a forum for official international economic discussions, on issues like competition and consumer policies; (2) to offer data collection and research for the forum; (3) to provide technical assis-tance for developing countries.4 Its mission is thus to help developing countries adjust to the globalized economy by analyzing international trade and development issues.

UNCTAD is composed of all 193 UN member states and 2 observer states, as well as over four hundred full time secretariat employees. It is part of the UN Secretariat, but it also reports to the General Assembly and the Economic and Social Council, although it maintains its own membership, leadership, and budget autonomy. It also coordinates extensively with institutions whose purview lies in global economics and finance, namely the World Trade Organization (WTO), the International Monetary Fund (IMF), and the World Bank (WB), as well as several non-governmental organizations worldwide. It is also part of the UN Sustainable Development Group, which is composed of 36 different organizations and funds committed to achieving the 17 Sustainable Development Goals (SDGs). Thus far, there have been 14 such meetings, with the last happening in 2016 in Nairobi, Kenya. Its 10th Secretary-General since 2013, always elected from among G-77 countries, is Mukhisa Kituyi of Kenya.

Major early achievements exemplify the ideal role of the committee.5 A prime example is the Generalized System of Prefer-ences (1968), an international tariff system implemented under the aegis of UNCTAD whereby bilateral tariff applications are proportional to the economic development of the respective trading parties, thus allowing LDCs to have smaller export tariffs to counterbalance lack of robustness in production output.6 This complements the previous norm, the Most Favored Nation principle, whereby tariffs are reciprocal regardless of economic development.7 As another example, two years later in 1970, UNCTAD stipulated a minimum threshold of 0.7% of the GDP of donor developed countries in foreign aid to LDCs.8

1 Massoud Karshenas, “Power, Ideology and Global Development: On the Origins, Evolution and Achievements of UNCTAD,” Develop-ment & Change 47, no. 4 (July 2016): 664–85. doi:10.1111/dech.12239.2 “Group of 77 (G-77),” Britannica Academic, accessed 22 September 2019, https://academic-eb-com.acces-distant.sciencespo.fr/levels/collegiate/article/Group-of-77/438728.3 Ibid.4 “Mandate and Key Functions,” UNCTAD, accessed 22 September 2019, https://unctad.org/en/Pages/DITC/CompetitionLaw/ccpb-Mandate.aspx.5 “History,” UNCTAD, accessed 22 September 2019, https://unctad.org/en/Pages/About UNCTAD/A-Brief-History-of-UNCTAD.aspx.6 “Preferential Market Access and the Generalized System of Preferences,” UNCTAD, accessed 22 September 2019,

h t t p s : / / u n c t a d . o r g / e n / P a g e s / D I T C / G S P / G e n e r a l i z e d - S y s t e m - o f - P r e f e r e n c e s . a s p x ; “Main legal provisions,” WTO, accessed 22 September 2019, https://www.wto.org/english/tratop_e/devel_e/d2legl_e.htm.7 “Principles of the trading system,” World Trade Organization, accessed 29 September 2019, https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm.8 “History of the 0.7 ODA target,” DAC Journal 3, No. 4 (2002): 9-11, last modified March 2016, accessed 22 September 2019, http://www.oecd.org/dac/stats/ODA-history-of-the-0-7-target.pdf; TD/97/Vol.1, “Proceedings of the United Nations Conference on Trade and

|9UNCTADCoMMiTTee hisTory

Political scientists often refer to UNCTAD’s first very consequential decade as its “golden years.” They have argued that by the 1990s and extending to today, the Conference has lost its status as a policy forum for major trade and development issues; instead it has become somewhat anachronistic in today’s fast-changing international economic context, and in need of modernization and reform.9 Specifically, its expectations are rooted in a geopolitical structure of simpler and more homogeneous blocs, and its ethos lies in a coordinated discussion involving trade and concessions, which is somewhat inadequate at a time when there is heavy fragmentation between institutions governing trade negotiations and development finance.10

Despite previous shortcomings, many analysts predict an important role for UNCTAD to fill in the near future, especially in bridging the often desynchronized discussions around commerce, development and finance at the global scale, and in overseeing more coherent and democratic economic decision-making.11 It is thus a mainstream belief that this committee, with its history and accumulated expertise, is well-poised to be a main vector in identifying and addressing the shortcomings of globalization to trade and development, and in guaranteeing equity in otherwise lopsided bilateral and multilateral agreements.12

Development,” UNCTAD, October 1968, accessed 22 September 2019, https://unctad.org/en/Docs/td97vol1_en.pdf.9 Massoud Karshenas, “Power, Ideology and Global Development: On the Origins, Evolution and Achievements of UNCTAD,” Develop-ment & Change 47, no. 4 (July 2016): 664–85. doi:10.1111/dech.12239.10 Ibid.11 Ibid.12 John Toye, UNCTAD at 50: A short history (Switzerland: United Nations, 2014), accessed 22 September 2019, https://unctad.org/en/PublicationsLibrary/osg2014d1_en.pdf.

10|UNCTADsiMUlATioN

Simulation

This simulation at NHSMUN 2020 will allow all delegates to participate equally in a vibrant debate. Delegates must thoroughly familiarize themselves with their country’s policies so that they can accurately represent them when the committee discusses each topic. The goal of this committee will be to build a consensus to support and pass a resolution that thoroughly addresses the topics under discussion, while also respecting the differing goals and opinions of all member states. With this goal in mind, del-egates should develop and support resolutions that align with their country’s policies. Each country must work towards finding compromises without abandoning their own country’s goals in favor of the resolution. The resolutions should, therefore, aim to improve the situation while allowing each country to stay on policy and accomplish what their government believes is important.

To start committee, after delegates have been introduced to the dais, they will first debate the setting of the agenda and then progress to substantive debate, which will deepen and progress throughout the following sessions. There will be two main forms of discussion in this committee: formal debate and caucusing. Formal debate consists of delegates adding themselves to the speakers list to be formally recognized before the rest of the committee for a specified length of time. When delegates appear before the committee, it is their opportunity to give an overview of their country’s position. It is imperative that all delegates re-main respectful of others during this time and observe all procedural rules in order for delegates to be heard and for the speaker’s list to flow smoothly. The chair will move down the speakers list, allowing each country who has volunteered their name to speak for a set amount of time and present their concerns to the committee.

Caucusing can be done in one of two ways: moderated and unmoderated. The speakers list will be suspended for both types of caucuses. Moderated caucuses flow similarly to formal debate, but delegates’ speaking times are often shorter, and each caucus has a specific topic that delegates must discuss in their comments. A moderated caucus will allow more speakers to address the assembly without having to wait for their turn to come on the speakers list. Unmoderated caucuses suspend formal rules of debate for a designated period of time during which delegates are free to move around the room and informally discuss policy and potential solutions with one another. The majority of writing for working papers and draft resolutions will occur during these unmoderated caucuses.

The topics in this committee are challenging and will require a great deal of research. Because NHSMUN emphasizes compro-mise and innovative problem solving, pre-written resolutions are not allowed at this conference. While your delegation may have some informal ideas about possible solutions before committee begins, you may not bring them to the conference in resolution form; this would defeat the purpose of the committee, which is to work together and compromise. Working papers and resolu-tions are collaboratively created by starting with solutions, first just as a set of ideas. These solutions are formatted into a working paper, then voted upon as draft resolutions, and finally presented as resolutions in plenary if passed in committee. Throughout this process and the debates, the dais staff will be available at all times to help delegates with any concerns or questions they may have. The dais is always happy to help delegates not only with substantive questions related to the topics under discussion, but also with adjusting to the procedural aspects of Model UN.

During the conference, the chair will be moderating the committee and setting up a general direction for the flow of debate. However, it is truly up to the delegates to decide how the committee proceeds, and it is up to the delegates to make the confer-ence and committee the best that it can be. Delegates are welcome to contact the dais at any time for help, both before and during the conference, as they are there to answer any questions. They will help to make sure the committee runs smoothly and is a success.

UNCTAD

NHSMUN 2020

Photo Credit: Rob Mieremet

Topic A:Reducing Offshore Capital (Capital Flight) in African Countries

12|ToPiC A: reDUCiNg offshore CAPiTAl (CAPiTAl flighT) iN AfriCAN CoUNTriesiNTroDUCTioN

Introduction

1 Léonce Ndikumana, “Capital Flight From Africa: Is the World Genuinely Ready for Action?” Lecture, Old Chapel, Amherst, 9 April 2018.2 Sunil Gulati, “CAPITAL FLIGHT: CAUSES, CONSEQUENCES AND CURES,” Journal of International Affairs 42, no. 1 (1988): 165-85, http://www.jstor.org/stable/24357207.3 Darryl McLeod, “Capital Flight,” Concise Encyclopedia of Economics, accessed 26 June 2019, https://www.econlib.org/library/Enc1/Capi-talFlight.html.4 Ibid.5 Sunil Gulati, “CAPITAL FLIGHT: CAUSES, CONSEQUENCES AND CURES.”6 Rajan, Ramkishen S., “Financial Crisis, Capital Outflows, and Policy Responses: Examples from East Asia,” The Journal of Economic Educa-tion 38, no. 1 (2007): 92-108, http://www.jstor.org/stable/30042754.7 Eric Helleiner. “Regulating Capital Flight,” Challenge 44, no. 1 (2001): 19-34, http://www.jstor.org/stable/40722052.8 Ibid. 9 “Capital Flight from Africa,” United Nations Economic Commission for Africa, 7 April 2014, accessed 26 June 2019, https://www.uneca.org/stories/capital-flight-africa; “Capital Flight from Africa,” United Nations Economic Commission for Africa, 7 April 2014, accessed 26 June 2019, https://www.uneca.org/stories/capital-flight-africa.10 Alex Booth, “How Can Africa Solve Its Capital Flight Problem?” The Africa Report, 22 March 2019, accessed 26 June 2019, https://www.theafricareport.com/10439/how-can-africa-solve-its-capital-flight-problem/.

Capital flight is broadly defined as the outflows of capital, or financial resources, from a country. It is measured by discrepancies between recorded inflows of foreign exchange and recorded uses of these resources, as reported in the country’s balance of payments––a measure of financial transac-tions between countries.1 Capital flight can take numerous forms, including rapid outflows of capital, unrecorded movement outside a country’s borders, or the illicit movement of capital, which is the most commonly used definition. Despite various forms of capital flight, it is caused nearly uniformly by anticipated devaluation of capital located in a particular country.2 The most common forms of devaluation include political risks like instability or governmental seizure, restrictive financial policies, and most frequently, fear of inflation or currency devaluation.3

When a currency is devalued, every unit of capital stored in that currency is devalued as well.4 Inflation is a related phe-nomenon that reduces the purchasing power of each unit of currency due to the introduction of new currency.5 Note that a small amount of inflation is considered to be beneficial for an economy, but only when very low and well controlled. When unhealthy inflation or currency devaluation is antici-pated, investors have clear incentives to remove their capital from affected countries.

Capital flight can have devastating outcomes on the econo-mies it affects. The large, sudden transfer of money out of countries itself is economically painful; however, the fact that capital flight often occurs in anticipation of political or eco-nomic instability compounds the problem in states that are al-ready bound to struggle. Furthermore, it can often precipitate a crisis as a self-fulfilling prophecy, because demonstrated fear over a currency’s devaluation can cause more investors to flee that currency, furthering devaluation.6

The international community does not have a solid framework

for the regulation of capital flight. Under the International Monetary Fund (IMF) Articles of Agreement, cooperation between countries to prevent capital flight is permitted, yet no international institution is authorized to restrict capital flows, share information, or track their movement.7 Regulation of capital flight is fully within the autonomy of states, so long as the capital resides in their borders. The lack of consistency in regulation across countries, however, paired with the general difficulty of preventing the flow of capital, severely limits the ability of African states to reliably control and prevent capital flight. Corruption among government officials, tax evasion, and offshore banks also play a large part in illicit flows.8

Today, African states have the highest rates of capital flight in the world, specifically sub-Saharan countries where experts estimate capital flight losses totaled between 7.5%–11.6% of the region’s total trade between 2005–2014.910 These losses are put into stark contrast with the humanitarian aid and loans that many African countries receive; it is estimated that for ev-ery US dollar of foreign loans lent to sub-Saharan Africa, 60

|13ToPiC A: reDUCiNg offshore CAPiTAl (CAPiTAl flighT) iN AfriCAN CoUNTrieshisTory AND DesCriPTioN of The issUe

cents have been lost due to capital flight.11 The reported total amount lost from 1970–2008 in sub-Saharan Africa is equiv-alent to 70% of the entire region’s gross domestic product (GDP) in 2008.12 The issue is unlikely to subside as African economies grow and develop. African economies are expand-ing and have access to some of the most profitable industries on the planet, but those states continue to lag behind in major development goals.13 As the amount of capital produced in African economies increases, so will the amount of capital leaving the countries.14

Currently, very few African countries have policies to prevent capital flight––also known as capital controls––and those that do often only address one or two specific contributing factors, as opposed to crafting a comprehensive policy.15 Across the entire continent, and especially in tandem with the rest of the world, the lack of regulation consistently leaves the continent particularly vulnerable to the worst effects of capital flight.16 Even in countries with sound policy aimed at restricting capi-tal flight, billions of USD of capital manage to exit illicitly. The largest sources of illicit flows are corruption among gov-ernment officials, tax evasion, and offshore banks.17

However, the solution to this problem does not lie only with African states and regional legislation. Proper management re-quires recipients of illicit monetary flows to be held account-able for maintaining legal business and banking practices, as well as increased monitoring of accounting records. Capital flight is a competitive, interconnected conflict in the global economy. Delegates should keep in mind that this background guide is just a starting point for their research, and they should 11 Ed Stoddard, “Should Africa Challenge Its “Odious Debts?” Reuters, 15 March 2012, accessed 27 June 2019, https://af.reuters.com/article/angolaNews/idAFL5E8ED3JD20120315.12 Ibid.13 Ndikumana, “Capital Flight From Africa: Is the World Genuinely Ready for Action?”.14 Ibid.15 Alex Booth, “How Can Africa Solve Its Capital Flight Problem?”16 Crystal, Jonathan. “The Politics of Capital Flight: Exit and Exchange Rates in Latin America.” Review of International Studies 20, no. 2 (1994): 131-47. http://www.jstor.org/stable/20097364.17 Ibid. 18 Shafik Hebous, “Money at the Docks of Tax Havens: A Guide,” (27 September 2011), accessed 27 June 2019, https://ssrn.com/ab-stract=1934164.19 Ibid. 20 McLeod, “Capital Flight.”21 Christophe Farquet, “Capital Flight and Tax Competition after the First World War: The Political Economy of French Tax Cuts, 1922–1928,” Contemporary European History, no. 4 (2018) 561, accessed 27 June 2019, https://www.cambridge.org/core/journals/contemporary-european-history/article/capital-flight-and-tax-competition-after-the-first-world-war-the-political-economy-of-french-tax-cuts-19221928/ED755B072F4AD6281D31A17ECF608FE6/core-reader.22 Farquet, “Capital Flight and Tax Competition after the First World War,” 541.23 Ibid.

appropriately investigate this topic in a more in-depth manner.

History and Description of the Issue

History of Capital Flight

Capital flight has long been a fixture of the global economy, especially in countries that are developing or in turmoil. The first recorded instances of tax havens, or tax-advantaged ju-risdictions, were in the late 19th century in the regions of New Jersey and Delaware in the United States, where lax banking regulations were implemented with the goal of attracting cus-tomers and companies.18 In the 1920s, European banks adopt-ed these practices, primarily Swiss banks in Zug and Zurich, as well as Liechtenstein.19 With the growth of the global finan-cial system, capital flight has become an increasingly prevalent global phenomenon.20

In post-World War I France, the government reformed its tax policies with the intention of appeasing wealthy investors in the country and stabilizing its revenues by preventing their flight. These policies reduced the top tax rates, limited fis-cal controls, and weakened accountability enforcement for offshore tax holdings.21 After World War I, tax rates initially increased across Europe in order to begin paying all of the accrued debt; however, the wealthy population engaged in a range of practices to avoid their tax burden.22 Such methods were especially prominent in France, which had a system that required taxpayers to declare their assets, and it is estimated that 38%–47% of taxable assets went undeclared in 1924.23

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With so much money on the line, European countries redact-ed their higher tax rate and attempted to collaboratively imple-ment programs that prevented money from coming in from abroad.24 These practices were put in place in the hopes of attracting capital holders by restoring confidence with the as-set holders, but they largely failed.25 Capital flight from France further destabilized the system and created a downward spiral, which was marked all across Europe by a depreciation of the currency, and caused even more economic harm by drying up state budgets.26

As it exists today, capital flight is largely a product of the changes in the international financial system that accompa-nied the decline of the Bretton Woods system of fixed ex-change rates and the gold standard for currency value, which was implemented after World War II.27 The transition from fixed exchange rates to floating exchange rates reduced the need for global capital controls worldwide, as governments no longer had to decide the value of their currency on their own.28 After the United States moved the US dollar to a float-ing exchange rate in 1973, the US dollar became the primary currency for capital flight because it is convertible to most currencies.29

The international community appeared ready to take multilat-eral steps to regulate international capital flight in the midst numerous economic crises in Latin America during the 1980s. American economist David Felix proposed that US banks should share the financial information of Latin American citizens with their host governments in order to allow these countries to track and limit capital flight from their countries into countries like the United States empowering them to pay back their substantial debts.30 At a conference by the Insti-tute for International Economics at the time, other academ-24 Farquet, “Capital Flight and Tax Competition after the First World War,” 549.25 Farquet, “Capital Flight and Tax Competition after the First World War,” 561.26 Farquet, “Capital Flight and Tax Competition after the First World War,” 541-542.27 McLeod, “Capital Flight.” 28 Peter Garber, “The collapse of the Bretton Woods fixed exchange rate system”, In A Retrospective on the Bretton Woods system: Lessons for international monetary reform, pp. 461-494, University of Chicago Press, 1993,29 “Global Capital Flow Trends,” UNCTAD Stats, accessed 19 September 2019, https://stats.unctad.org/Dgff2012/chapter1/1.2.html.30 Eric Helleiner, “Regulating Capital Flight”, Challenge 44, no. 1 (2001): 19-34. http://www.jstor.org/stable/40722052.31 Ibid.32 Nathan Nunn, “Slave Trade and African Underdevelopment”, VOX, CEPR Policy Portal, 08 December 2007, accessed 27 June 2019, https://voxeu.org/article/slave-trade-and-african-underdevelopment.33 Ibid. 34 Ibid. 35 Ibid. 36 Ibid.

ics and advocates proposed restrictions on soliciting foreign capital flight and taxes on interest earned from foreign capi-tal.31 However, these measures were ever enacted by the global financial community as the crisis abated. Instead, the world economy has continued to move towards increasing trade lib-eralization. Delegates looking to reform the management of capital flight in Africa will need to consider the alarming rate at which capital flows have grown in recent years, as well as the necessity of prudent regulation when discussing such an enormous global financial market.

History of Economic Instability in Africa

The history of Africa and its constituent economies is critical to the discussion of capital flight, as the effects of colonial-ism and the slave trade continue to have a significant impact. One of the most striking pieces of evidence for this is that the countries with the lowest average income today were the primary origin points of African slaves taken between 1400 and 1900.32 Researchers argue that because the slave market tore apart ethnic groups and communities, political structures did not develop in the same way as in other African countries and remain weak to this day.33 These regions are still ethnically fragmented and their economies have remained stagnant.34 It is estimated that had the slave trade not occurred, 72% of the average income gap between Africa and the rest of the world would not exist.35 Additionally, studies have estimated that 99% of the income disparities between African countries and the rest of the developing world would not exist.36 This stark contrast emphasizes that African economies, especially those affected by the slave trade, have experienced an entirely different development trajectory than other least developed countries (LDCs). This trajectory provides insight into the

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structure of African economies as a whole, which can aid in comprehending the conditions under which capital flight oc-cur. Even after the end of the trans-Atlantic slave trade to America, colonial powers were still present and reshaped Af-rican economies, as colonizers introduced industry and com-pletely overhauled labor systems.37 Industrial innovations al-lowed for the cultivation of resources; however, most of these commodities were sent back to European centers of trade.38

Accompanying the recent rapid growth of capital flight from Africa has been the increasing wealth of the region.39 Al-though a portion of capital outflows is a result of foreign direct investment (FDI) by foreign actors, research indicates that economic development, growing economic stability, and

37 Ewout Frankema, “How Africa’s Colonial History Affects Its Development,” World Economic Forum, 15 July 2015, accessed 27 June 2019, https://www.weforum.org/agenda/2015/07/how-africas-colonial-history-affects-its-development/.38 Ibid. 39 James Boyce and Léonce Ndikumana, “Capital Flight from Africa: Updated Methodology and New Estimates,” 2018, https://www.peri.umass.edu/component/k2/item/1083-capital-flight-from-africa-updated-methodology-and-new-estimates.40 Ibid.41 Ibid.42 “Taking the Pulse of Africa’s Economy,” World Bank, 08 April 2019, accessed 27 June 2019, https://www.worldbank.org/en/region/afr/

financial liberalization in African countries has been the single greatest cause of growing capital outflows from the region.40 As economic development has led to largely unequal gains in African countries, and those states attempt to amass tax wealth for the purpose of development, capital flight in Africa is widely seen by scholars as the evasion of taxes or appropria-tion of private wealth aided by growing financial liberalization and access to foreign markets.41

It is important to note that despite the overall rise in Afri-can development, the region has still been deeply impacted by colonization in ways that continue to damage African economies today.42 Growth is often limited to and representa-tive of the three largest African economies: Nigeria, Angola,

This image depicts miners in South Africa during the colonial era

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and South Africa.43 These countries are commonly associated with connections to the oil industry and within each country, the vast majority of benefits of growth flow directly to small subsets of the population.44 Just as Africa’s colonial history has extracted and redirected wealth to an exclusive group, the economy in many countries on the continent today operates in a similar manner.45 As African countries generate increas-ing amounts of wealth, large shares are being extracted by a shrinking number of individuals that either legally, or through easy evasion of legal enforcement, stash their capital, free from taxation or seizure, abroad.46 When devising solutions, it is essential that delegates consider the historical legacy of colonialism, and to what extent, and in what methods, that legacy has influenced the scope of capital flight from African countries.

African Solutions to Capital Flight

African states have tried to combat capital flight. In 2013, the African Commission on Human and Peoples’ Rights voted to pass Resolution 236, which called for the Working Group on Economic, Social and Cultural Rights in Africa and the Work-ing Group on Extractive Industries, Environment and Human Rights Violations in Africa to form a joint study group to in-vestigate African capital flight.47 It also requested international cooperation and collaboration from other stakeholders.48 Fur-thermore, the joint study group can call on state parties to re-examine their tax laws to find and eliminate loopholes, and to introduce policies preventing illicit capital flight from their

publication/taking-the-pulse-of-africas-economy.43 Ibid. 44 Kinglsey Ighobor, “Closing Africa’s Wealth Gap”, Africa Renewal United Nations, December 2017- March 2018, https://www.un.org/afri-carenewal/magazine/issue/december-2017-march-2018.45 James Boyce and Léonce Ndikumana, “Capital Flight from Africa: Updated Methodology and New Estimates.”46 Ibid.47 ACHPR/Res.236, “Resolution on Illicit Capital Flight from Africa,” 23 April 2013, accessed 28 June 2019, http://www.achpr.org/sessions/53rd/resolutions/236/. 48 Ibid.49 Ibid. 50 Abiola Idowu-Ojo and Marie Saine, “Press release on the Joint Special Mechanisms Meeting between the Working Group on Extractive Industries, Environment and Human Rights in Africa and the Working Group on Economic, Social and Cultural Rights, Banjul, The Gam-bia,” African Commission on Human and Peoples’ Rights, 12 February 2019, accessed 16 July 2019, http://www.achpr.org/press/2019/02/d444/. 51 Alex Booth, “How Can Africa Solve Its Capital Flight Problem?”52 Benneth Obioma, “Corruption Reduction in the Petroleum Sector in Nigeria: Challenges and Prospects,” Mediterranean Journal of Social Sciences 3, No. 15, (2012), http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.651.7630&rep=rep1&type=pdf.53 Ibid.54 Abdul Tejan-Cole, “How Can Africa Stop Illicit Capital Flight?” World Economic Forum, 13 July 2015, accessed 27 June 2019, https://www.weforum.org/agenda/2015/07/how-can-africa-stop-illicit-capital-flight/.55 Stoddard, “Should Africa Challenge Its “Odious Debts?”.

economies.49 The group’s work continues, and in February 2019, it shared some preliminary research and suggestions.50

In Nigeria and Angola specifically, capital flight is complicated by the dominance of the oil industry in the national economy. Although the revenue from oil flows to the two states’ nation-al oil companies, corruption and poor oversight and account-ability within the oil companies and governments mean that many of the dollars never make it to national treasuries and are instead swept away, unaccounted for by the government.51 Benneth Obioma, an Economist at Imo State University in Nigeria, has identified a wide range of corrupt practices in Ni-geria’s oil sector, ranging from underreporting of extraction, to excessively liberal permit systems, to outright theft of rev-enues.52 Obioma has noted a list of policy responses needed to curb corruption in the sector, such as improved transpar-ency on permitting and total sales, regular audits, which he noted would likely require aggressive assistance from inter-national organizations like the United Nations Development Programme and World Bank, which have the expertise and resources to conduct operations of such a scope.53

Additionally, transfer pricing, wherein legal entities misprice the cost of products, is one of the main culprits of capital flight due to little regulation, costing the governments of the Economic Community of West African States (ECOWAS) an estimated USD 56 billion in tax revenue.54 In terms of trade, exports under-invoice to pay fewer tariffs for bringing an item out of the country while over-invoicing is used for imports.55 An importer can also benefit if a government has favorable

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foreign exchange rates.56 Transfer pricing is responsible for 60% of African capital flight, yet only Nigeria and Ghana have taken legislative action to monitor capital outflows from the oil sector.57

With only two states have taken legislative action against transfer pricing, there is a strong need to uniformly address illicit capital flows as the absence of action has left easily ex-ploitable loopholes all across the continent.58 As such, it is important to analyze each country’s contributions to the con-tinental economy. However, this has proven difficult due to a lack of record-keeping or audit trails from African economies, making the origin of the capital impossible to determine.59 Compliance checks also tend to be low, making the system easy to manipulate since many officials benefit from the status quo, and therefore have a vested interest in maintaining it.60

Tax incentives for foreign investors also contribute to a loss of capital in African economies.61 Governments are desperate for foreign investment, but often fail to consider all of the consequences of implementing such policies.62 Although their potential benefits are obvious, they often have only marginal advantages and high costs in lost revenues.63 Other factors in capital flight include: “money laundering and other proceeds of crime, wealth hidden in offshore tax havens, tax avoidance, and the dodging of custom duties.”64 Professor Simplice A. Asongu, Director of the African Governance and Develop-ment Institute, argues that governments need to make it easier to conduct business in their states by fostering private sector growth, along with streamlining and improving business regu-56 Ibid. 57 Booth, “How Can Africa Solve Its Capital Flight Problem?”. 58 James Boyce and Léonce Ndikumana, “Strategies for Addressing Capital Flight,” African Economic Research Consortium, September 2014, https://aercafrica.org/wp-content/uploads/2018/07/wp-cf-08.pdf.59 Tejan-Cole, “How Can Africa Stop Illicit Capital Flight?”60 James Boyce and Léonce Ndikumana, “Capital Flight from Africa: Updated Methodology and New Estimates.”61 Tejan-Cole, “How Can Africa Stop Illicit Capital Flight?”62 Ibid. 63 Ibid. 64 Ibid. 65 Simplice A. Asongu, “Fighting African Capital Flight: Empirics on Benchmarking Policy Harmonization,” The European Journal of Com-parative Economics 11, no. 1 (2014): 113, accessed 27 June 2019, EBSCO.66 Ibid. 67 Asongu, “Fighting African Capital Flight,” 114.68 Ibid. 69 Ibid. 70 Joseph E. Stiglitz and Hamid Rashid, “How Can Developing Countries Stop Their Capital Draining Away?” World Economic Forum, 19 February 2016, accessed 27 June 2019, https://www.weforum.org/agenda/2016/02/how-can-developing-countries-stop-their-capital-draining-away/.71 Michelle Clark Neely, “The Name Is Bond—Indexed Bond,” Federal Reserve Bank of St. Louis, last modified 1 January 1997, accessed 17 July 2019. https://www.stlouisfed.org/publications/regional-economist/january-1997/the-name-is-bondindexed-bond

lations.65 He suggests that a timeline for this plan can be a six to thirteen year time period, but western governments must become involved.66

Offshore Solutions to Capital Flight

The role of foreign countries in solving capital flight cannot be ignored, since the recipients enable the continuation of illicit outflows. Successful responses to capital flight in Af-rica will require western governments to take action against practices and policies that allow their banks to accept capital from corrupt African administrations.67 Such policy responses would enact stricter banking laws and required audits, with an emphasis on identifying instances of capital flight.68 More de-veloped countries (MDCs) can also contribute their resources and financial intelligence to help African countries identify the roots of the problem, either through individual state contri-butions or UN measures.69 However, a larger structural prob-lem exists in that developed countries have clear incentives to promote flight of capital to their own country, and little to no incentive to limit capital flows out of other countries. In other words, such solutions are difficult to imagine.

Nonetheless, MDCs have a role to play in helping African economies develop and gain stability, with one measure cre-ating joint partnerships with the developing countries’ gov-ernments to convert their debt into a GDP-linked or other form of indexed bond.70 Indexed bonds are more appealing to investors because they account for inflation, and more ap-pealing investments are more likely to sustain their value.71 It

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is also suggested that creditor countries should stop loaning money to African economies and directly invest in their econ-omies instead, which would allow these economies to develop and grow without the burden of extreme debt and high in-terest payments.72 Some economists also argue for the banks with illicit capital to simply band together and refuse to accept money from certain individuals or governments in what have been dubbed, “defensive cartels.”73 This is an admittedly un-likely solution, as it would prove difficult to incentivize banks to decline capital.74 Finally, there are also calls for dirigiste re-strictions at customs, which would involve random checks that would include the invoice examinations to limit transfer pricing.75 Although it is impossible to check every invoice, the random checks would still increase the risk of punishment for transfer pricing and discourage the practice.76

Finally, the greatest action that MDCs can take with regards to capital flight is adopting a sense of responsibility. Most of the offshore tax havens that receive African capital flows are not tropical islands, but rather major banking centers like New York and London.77 These cities are neither remote nor unac-countable for their actions, but they have become complicit in capital flight nonetheless.78 Economists assert that banks must become transparent and take responsibility for their own actions to truly solve the problem at both ends.79 Policy sug-gestions for this include strengthening and enforcing existing bank laws in MDCs, along with eliminating loopholes across all countries.80 Delegates will need to think critically about feasible mechanisms for change as well as any possibilities to align the incentives of international financial institutions with the development goals of African countries.72 Wilhelm Nölling, “Combating Capital Flight from Developing Countries,” Intereconomics 21, no. 3 (1986): 122, accessed 27 June 2019. doi:10.1007/bf02925281.73 Ibid. 74 Ibid. 75 Nölling, “Combating Capital Flight from Developing Countries,” 123.76 Ibid. 77 James K. Boyce and Léonce Ndikumana, “Strategies for Addressing Capital Flight,” Capital Flight from Africa: Causes, Effects, and Policy Issues (Oxford: 2014) 10-11, doi:10.1093/acprof:oso/9780198718550.003.0016.78 Ibid.79 Ibid. 80 Ibid. 81 Léonce Ndikumana and James K. Boyce, Africa’s Odious Debts: How Foreign Loans and Capital Flight Bled a Continent, (Zed Books: 2011), 107, accessed 26 June 2019, ProQuest.82 Stoddard, “Should Africa Challenge Its “Odious Debts?”83 Ndikumana and Boyce, Africa’s Odious Debts, 109.84 Stoddard, “Should Africa Challenge Its “Odious Debts?” 85 Ndikumana and Boyce, Africa’s Odious Debts, 109.86 “New Project to Measure Illicit Financial Flows in Africa,” United Nations Conference on Trade and Development, 16 March 2018, last accessed 26 June, 2019, https://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=1688

Aid to Africa vs. Lost Capital

Capital flight in developing countries contrasted with the hu-manitarian aid that African countries receive makes African capital flight an especially complex debate. African states have long been considered net beneficiaries of the global econo-my; however, when total change in capital accounts are con-sidered, the continent is actually a net creditor to the global economy.81 Humanitarian aid often takes the form of loans, so even though MDCs are providing support, they help African economies incur debt. 60% of the amount loaned to sub-Sa-haran African countries leaves the continent as capital flight.82 This phenomenon is called “debt-fueled capital flight.”83 This also refers to odious debt, that which is “incurred without the consent of the people, if it was not used for public benefit and if creditors knew these factors.”84 The tragedy of such capital flight is that capital that has left the country, and thus was not truly used by the state, must still be paid to the original credi-tor with interest. Essentially, the creditors in these situations are transferring funds to individuals that flee with the capital and require the debtor state to pay for it. Some economists argue that the legality of these debts should be challenged and that African countries should not be held accountable for pay-ing back money that did not benefit their economies.85

The scope of this debt, and to whom it is owed, are factors that make the contrast with capital flight especially notewor-thy. The UN estimated annual losses from capital flight to be 50 billion USD, approximately twice the amount of official aid African countries receive annually.86 Between 1970 and 2008, the 33 sub-Saharan countries with available data lost 700 bil-

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lion USD through illicit flows.87 To compare, the 2008 total gross domestic product (GDP) for all of sub-Saharan Africa was 997 billion USD, meaning that sub-Saharan Africa lost approximately 70% of the annual output of its economy to capital flight.88

Looking at more specific numbers, between 1970 and 2002, the World Bank and the International Monetary Fund (IMF) disbursed USD 28 billion to Nigeria and USD 10 billion to the Democratic People’s Republic of the Congo.89 Transparency International has estimated that each of these countries’ heads of state participated in the theft of approximately 5 billion USD.90 As is standard practice, neither of these countries were relieved of the lost 5 billion USD in their debt repayments. Understanding these numbers is also essential to grasping the role these international organizations play in capital flight.

Moving forward, delegates must balance evaluations of capital inflows into the continent with evidence of the scope of net outflows. Relatedly, delegates will need to consider the ways in which current institutional structures challenge or reinforce the current capital exodus.

Case Studies: Current Capital Flight Beyond Africa

Although capital flight is particularly prevalent among African countries, it is not unique to them. This problem is occurring in numerous countries around the world today and analyz-ing the methods these countries use to address it can provide context for potential solutions. It is also important to note that capital flight is not just a problem for least developed countries (LDCs) but can be experienced by states at all levels of development. 87 Ndikumana and Boyce, Africa’s Odious Debts, 38.88 Ibid. 89 Jennifer Nordin and Raymond Baker, “How Dirty Money Binds the Poor,” Financial Times, 12 October 2008, accessed 27 June 2019, https://www.ft.com/content/fe83a20a-1c7a-11d9-8d72-00000e2511c8.90 Ibid. 91 “Argentina’s Capital Flight: Will History Be Repeated?,” Knowledge@Wharton, 29 September 2011, accessed 27 June 2019. 92 Ibid. 93 Ibid. 94 Ambrose Evans-Pritchard, “Debt Crisis: Greek Euro Exit Looms Closer as Banks Crumble,” The Telegraph, 16 May 2012, accessed 27 June 2019, https://www.telegraph.co.uk/finance/financialcrisis/9270884/Debt-crisis-Greek-euro-exit-looms-closer-as-banks-crumble.html.95 Ibid. 96 Molly Moore, “Old Money, New Money Flee France and Its Wealth Tax,” The Washington Post, 16 July 2006, accessed 28 June 2019, http://www.washingtonpost.com/wp-dyn/content/article/2006/07/15/AR2006071501010_2.html.97 Ibid.

Argentina

Latin American countries have historically been victims of capital flight and many are at various points in ongoing cycles of low or high illicit flows. One case study is Argentina, where this issue has been linked to consumer confidence and the exchange rate.91 Individuals more confident in their country’s economic stability are more likely to invest in domestic prod-ucts and assets with their domestic currency. In Argentina, as consumers lost confidence in their economy, they would ex-change their money for foreign currency like the USD.92 This is a noteworthy example of capital flight because it accounts for funds that stay in the country as foreign currency, render-ing it useless for interaction with the domestic economy and creating instability in the domestic currency exchange rate.93

The European Union

Greece experienced a similar situation just prior to being bailed out by the European Union (EU) and the Internation-al Monetary Fund. Greek banks lost an estimated EUR 700 million due to panicked citizens withdrawing their money in preparation for a potential return to the drachma.94 Outflows from the country became uncontrollable and only worsened discussion of a Greek exit from both the Eurozone and the EU.95

France is also reporting a loss of capital as many of its wealth-iest citizens moving abroad due to high taxes.96 The state’s tax-es on the wealthy earn the country approximately 2.6 billion USD a year, but it has lost 125 billion USD in capital flight since 1998.97 France, whose labor laws favor workers over corporations, has not changed its laws to attract corporations and wealthy citizens. Given the attractiveness of financial lib-eralization in other countries and the ease of capital flight,

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the country has seen significant outflows from its wealthiest citizens and organizations.

China

China is another state with capital flight issues, however it is a relatively new problem for the country, which has historically experienced surpluses in its overall balance of payments.98 China accepted excess reserves in foreign payments which decreased interest rates, increasing the supply of money as well as inflation. To combat this, China used a strategy known as the sterilization of money, with the aim of shrinking its surpluses.99 This strategy included issuing bonds to banks to absorb excess yuan so that it could not be converted or leave the state.100 However, this poses a new challenge to the Chi-nese economy: finding a balance between adequately decreas-ing its surplus and maintaining growth as capital continues to flow out of the state.101 So far, the Chinese government and the People’s Bank of China have been mostly successful in maintaining this balance by increasing domestic credit.102 Go-ing forward, the economy is predicted to follow a similar track as Japan in the 1980s, making a rapid transition towards higher value-added industries.103

98 John Greenwood and Steve H. Hanke, “How China Copes With Capital Flight,” The Wall Street Journal (20 November 2018), accessed 27 June 2019, https://www.wsj.com/articles/how-china-copes-with-capital-flight-1542672901.99 Ibid.100 Ibid. 101 Ibid. 102 Ibid. 103 Ibid. 104 Akira Ariyoshi et al, “Capital Controls; Country Experiences with Their Use and Liberalization,” IDEAS Working Paper Series from RePEc (2000) https://www.imf.org/external/pubs/ft/op/op190/pdf/part1.pdf.105 Ibid.

The three examples above provide information on different environments and solutions to the challenge of capital flight globally. Delegates should take note of the unique circum-stances and challenges present in each case study, including the scope of Greece’s debt relief, lack of public trust in Ar-gentina, and ability of the French and Chinese states to pur-sue ambitious capital controls given the strength of their governments. Matching these situations with their outcomes may provide insight on capital flight management in African countries.

Current Status

African Countries’ Actions Against Capital Flight

When attempting to limit capital flight, countries must gen-erally approach the regulation from two primary angles. The first is prevention through capital controls. At the most basic level, these legally restrict the movement of capital, yet their effectiveness varies greatly depending on levels of corruption, as well as the effectiveness of state regulation. The second approach to limiting capital flight is anti-corruption measures and enforcement.

In theory, the first method, capital controls, is supposed to limit and delay the transfer of capital outside of bank ac-counts or through international wire transfers, requiring every transfer to be put under review and approved by government agencies.104 However, actual applications of capital controls differ widely across many African countries. More heavy-handed controls are referred to as administrative, or direct controls, that mandate approval processes for transactions and rely heavily on legal enforcement.105 More subtle controls like taxation, administrative requirements, and/or actions taken to alter the marketplace typically work to alter the incentives

Greek police force guards the national bank in face of protests after an economic crisis

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of actors rather than directly control their behavior.106 Other examples of capital controls include limiting bank lending to non-residents and restrictions on investments. These actions restrict the amount of foreign investments and limit the num-ber of citizens that may have invested in capital abroad.107 Ex-change control regulations also differ widely across countries on the continent. In Nigeria specifically, the government has enacted capital restrictions on shipping and investment in the oil and gas sectors, while such restrictions largely do not exist in neighboring countries.108

In recent years, African countries have started to individually address capital flight through a variety of legislative measures, however, the effectiveness of these measures is yet to be fully determined, with many undermined by their lack of consis-tency.109 For example, South African banking firms have an international presence and must maintain business practices that comply with international standards, whereas banking firms in neighboring Mozambique are not participants in that market, nor has the government enacted any anti-corruption legislation.110 This inconsistency means that as long as firms comply with regulations in South Africa, they can enjoy the benefits of a stable regulatory regime, and selectively take advantage of exceedingly liberal conditions in Mozambique. That being said, some new legislation has come to the fore-front of African politics.

Wide variation exists in anti-corruption and transparency lev-els across the continent as well. Kenya and Angola have both enacted anti-corruption and enforcement policies aimed at closing the gap between mandated and actual levels of capital mobility.111 However, the inconsistent application and focus of these laws has prevented them from fully addressing capital flight. Kenya’s law calls for the demolition of buildings built 106 Ibid.107 Coppola, “How Capital and Exchange Controls Affect International Trade.”108 Claude Harding, “African Exchange Controls — Almost everywhere you go,” Africa Business Insight, 18 October 2010, https://www.howwemadeitinafrica.com/african-exchange-controls-%e2%80%93-almost-everywhere-you-go/4727/.109 Booth, “How Can Africa Solve Its Capital Flight Problem?”110 Ibid. 111 Ibid. 112 Eyder Peralta, “Kenya’s Fight Against Corruption Includes Demolishing Buildings,” NPR, 2 January 2019, accessed 27 June 2019, https://www.npr.org/2019/01/02/681565758/kenyas-fight-against-corruption-includes-demolishing-buildings. 113 Ibid. 114 “Ghana Anti-Money Laundering Act,” International Labour Organization, accessed 27 June 2019, http://www.ilo.org/dyn/natlex/natlex4.detail?p_lang=en&p_isn=92293&p_country=GHA&p_count=115. 115 Booth, “How Can Africa Solve Its Capital Flight Problem?”116 “Voluntary Assets and Income Declaration Scheme,” Mazars in Nigeria, accessed 27 June 2019, https://www.mazars.com.ng/Home/News/Latest-News/Voluntary-Assets-and-Income-Declaration-Scheme.

with fraudulent permits.112 The state has tirelessly targeted buildings that were central to communities and dedicated re-sources to eradicating these structures.113 Priorities along the same vein call into question the true motivations behind gov-ernmental action. In other words, anti-corruption policies are enacted with the intention of providing more oversight of administrative officials handling monetary funds, but these same policies may be co-opted to pursue newer forms of cor-ruption.

In 2008, Ghana’s anti-money laundering act addressed a num-ber of causes of corruption, but it went a step further to is-sue the specific goal of reclaiming the country’s money.114 In February 2017, Nigeria enacted the Voluntary Assets and In-come Declaration Scheme (VAIDS) in an attempt to recover lost capital from tax evasion.115 It offers some tax waivers and rewards in exchange for a full declaration of assets by Nige-ria’s richest citizens, and in the past, a similar project in India brought 350,000 taxpayers into compliance.116 Nigeria’s strat-egy is lenient on defaulters who come forward and harsh on

Ugandan anti-corruption sign

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those who do not, potentially making it an even more effective way to reclaim lost capital.117 Expert economists assert that it is a strong plan, but must be accompanied with more legisla-tion to address other aspects of capital flight.118

International Action Against Capital Flight

Capital flight has started to catch attention beyond the af-fected developing countries, with the UN beginning to ad-dress the issue in a handful of different ways. This problem was first discussed on a UN panel in 2003, where both UN officials and independent contractors advocated for transpar-ency among all states and an overhaul of the international tax system.119 Almost a decade later, progress has been made in some areas, but the challenge as a whole remains as urgent, if not more so, than ever.

The European Union (EU) has also taken some compelling steps against capital flight. In March 2019, the EU added ten more countries to its blacklist of tax havens, increasing from five to fifteen countries.120 These states were added because they had failed to take any action against illicit capital in their countries by the one year deadline.121 The blacklist, which was created in December 2017 to encourage fair competition and transparency, is not without its critics, especially those who argue that its measurements are too loose since they leave out many countries that are traditionally considered tax havens.122

Furthermore, such standards do not apply to EU member states, leaving several European tax havens off the list.123 The consequences for blacklisted countries include trading diffi-culties and a damaged reputation, but measures such as sanc-117 Ibid. 118 Ibid. 119 GA/EF/3048, “Multilateral Approach Best Way to Tackle Capital Flight; Tax Evasion, Money-Laundering, Attorney Tells Second Committee Panel Discussion,” 21 October 2003, accessed 27 June 2019, https://www.un.org/press/en/2003/gaef3048.doc.htm. 120 Amanda Lee, “EU Tax Haven Blacklist Triples to Include 15 Countries,” Euractiv.com, last modified 19 March 2019, accessed 27 June 2019, https://www.euractiv.com/section/economy-jobs/news/eu-tax-haven-blacklist-triples-to-include-15-countries/.121 Ibid. 122 Ibid. 123 Ibid. 124 Ibid. 125 Francesco Guarascio, “EU shrinks tax haven blacklist, removes UK, Dutch territories,” Reuters, 17 May 2019, accessed 25 July 2019, https://www.reuters.com/article/us-eu-tax-blacklist/eu-shrinks-tax-haven-blacklist-removes-uk-dutch-territories-idUSKCN1SN12M. 126 Ibid. 127 Ibid. 128 “Sustainable Development Goal 16,” Sustainable Development Goals Knowledge Platform, accessed 27 June 2019, https://sustainabledevelop-ment.un.org/sdg16. 129 Ibid. 130 “Sustainable Development Goal 8,” Sustainable Development Goals Knowledge Platform, accessed 27 June 2019, https://sustainabledevelop-ment.un.org/sdg8.

tions have yet to be levied against these states.124 In May 2019, the list shrank to twelve countries, as Aruba, Bermuda, and Barbados were removed.125 However, this move caused some controversy because only EU territories were removed.126 The EU’s decision to remove these states from the blacklist rein-forces the importance of political factors in shaping regula-tion and global governance.127

Sustainable Development Goals

Capital flight relates to a number of the Sustainable Devel-opment Goals (SDGs). Most notably, it is explicitly stated as a target of SDG 16: Peace, Justice, and Strong Institutions under Target 16.4: “to significantly reduce illicit financial and arms flows, strengthen the recovery and return of stolen as-sets and combat all forms of organized crime.”128 This marks a specific objective laid out by the UN against capital flight as it directly relates to cash flows. SDG 16 is to “[p]romote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, account-able and inclusive institutions at all levels.”129 Capital flight de-tracts from that effort by rewarding corrupt institutions and politicians, depriving the affected country’s population the op-portunity for a more developed and diverse economy.

Reducing capital flight ties directly into SDG 8: Decent Work and Economic Growth, with a purpose is to: “[p]romote sus-tained, inclusive and sustainable economic growth, full and productive employment and decent work for all.”130 Eco-nomic growth cannot be inclusive if resources are continu-ously flowing out of the country, taking the opportunity for

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an improved standard of life with them. The UN has realized the importance of ending capital flight in order to fulfill the SDGs, which is apparent in UNCTAD’s project to measure illicit flows from Africa, starting in 2018.131 The role of capital flight in shaping Africa’s debt challenges is also central to the achievement of this goal.

Delegates must also note the role that outside forces play in preventing the actualization of these SDGs on the African continent, with experts pointing to the current global tax sys-tem as an obstacle in the growth of the African economy.132 Delegates are reminded that some level of change on the in-ternational level may be necessary in order to actualize the Sustainable Development Goals in this context.

Bloc Analysis

Point of Division

Blocs in this committee will be characterized by a combina-tion of two overarching premises. The first is based on the number of democratic characteristics each state shows. Dem-ocratic governments in developing states are more likely to favor capital controls, at the very least as a method of prevent-ing corruption. By comparison, authoritarian states have less accountability to public interests and will generally oppose capital controls that prevent capital flight of their wealthy benefactors.

Bloc positions will also be defined by a country’s exchange rate policy, which is how a country’s central bank exchanges its own currency for others. Generally, exchange rate policies, or regimes, can be fixed, having a set value set by a central 131 “New Project to Measure Illicit Financial Flows in Africa.”132 Greg Wilpert, “Unfair Global Tax System Makes Sustainable Development Impossible,” The Real News Network, 4 November 2018, ac-cessed 27 June 2019, https://therealnews.com/stories/unfair-global-tax-system-makes-sustainable-development-impossible.

133 “Debates over Exchange Rates: Overview and Issues for Congress,” EveryCRSReport.com, last modified 22 June 2018, accessed 17 Au-gust 2019, https://www.everycrsreport.com/reports/R43242.html. 134 Christina Majaski, “Fixed Exchange Rate,” Investopedia, last modified 14 April 2019, accessed 17 August 2019, https://www.investopedia.com/terms/f/fixedexchangerate.asp. 135 Ibid. 136 Cory Miller, “Floating Exchange Rates,” Investopedia, last modified 9 April 2019, accessed 17 August 2019, https://www.investopedia.com/terms/f/floatingexchangerate.asp. 137 Ibid.138 Frances Coppola, “How Capital and Exchange Controls Affect International Trade,” American Express, accessed 17 August 2019, https://www.americanexpress.com/us/foreign-exchange/articles/capital-controls-in-developing-economies-affect-international-trade/.

authority, or floating, in which exchange markets decide the value of the currency.133 When a country has a fixed exchange rate, the government has officially set the exchange rate to a “peg,” typically another currency or the price of gold, which stabilizes the currency’s value.134 This practice, more common in developing countries, provides stability in trade and low in-flation.135 As a contrast, states with a floating exchange rate have only indirect controls on the value of their currency, al-though federal governments and central banks may intervene in emergencies if they see fit (usually at the cost of investor confidence).136

Exchange rates are a helpful tool for determining blocs be-cause they indicate how a state perceives capital controls.137 A lack of capital controls is beneficial to countries with floating exchange rates, since their currency is tied to the flows of the global market, and reduced barriers inevitably mean increased gains from trade. Countries with fixed exchange rates would be in favor of controls, as they tend to prefer economic ac-tions that stabilize the economy, and the opposite is true of countries with floating exchange rates.138 Related sentiments are important in this discussion of capital flight because the reduction of illicit flows cannot be made possible without the implementation of capital controls.

Delegates must understand that not all countries will fit neatly into each of these blocs and some may have characteristics that oppose one another. In cases like these, delegates must thoroughly research their country’s position and any prece-dents set, and then establish their own individual balance.

Capital-Intensive Investor Countries

These countries are the largest contributors to the global

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economy and are thoroughly engaged in international trade. Those in this financial position prefer little to no capital con-trols because they reap the benefits of unfettered interna-tional trade.139 This means that this bloc would be unwilling to support many large-scale efforts against capital flight and would probably even oppose such measures, since practices like transfer pricing provide enormous financial benefits to investors that take advantage of them. Transfer pricing is pos-sible through inconsistency in the global economy, therefore more capital controls would limit the amount of transfer pric-ing that the countries in this bloc could take advantage of.

This bloc includes countries that have put large amounts of capital towards Foreign Direct Investment (FDI), tax havens, and those with a significant financial sector. Examples of financially oriented countries include the United States, the United Kingdom, Singapore, the United Arab Emirates and OECD countries. Significant foreign investors include many

139 Ibid. 140 “Foreign direct investment, net outflows (% of GDP),” The World Bank, last modified 2018, accessed 18 August 2019, https://data.worldbank.org/indicator/BM.KLT.DINV.WD.GD.ZS?most_recent_value_desc=true.141 Coppola, “How Capital and Exchange Controls Affect International Trade.”142 “Foreign direct investment, net outflows (% of GDP),” The World Bank.143 “Investor’s List: Countries with Fixed Currency Exchange Rates,” Investment Frontier, last modified 19 February 2013, accessed 2 August 2019, https://www.investmentfrontier.com/2013/02/19/investors-list-countries-with-fixed-currency-exchange-rates/.

of those countries as well, in addition to countries like China and India. Some of the countries that contribute and receive the most per GDP are the Cayman Islands, Luxembourg, Ire-land, Malta, and Singapore.140

Fixed Exchange Rate and Democratic Regimes

In order to stabilize a fixed exchange rate, countries typically need to implement capital controls, as free movement of capi-tal into and out of their borders can cause rapid fluctuations in their own currency’s supply and demand, which signifi-cantly increases the difficulty of maintaining a fixed rate of exchange. 141As a result, states with fixed exchange rates will tend to support capital controls, and be more willing to take measures against capital flight.142 This bloc would also be the most likely to take action against capital flight since, out of the 36 countries globally with fixed exchange rates, 19 of them are in Africa.143 Some countries with fixed currency rates are: Benin, Cameroon, Denmark, Djibouti, Jordan, Mali, Republic

Map summarizing the exchange rate policies of countries around the world. Countries in teal have free-floating currencies; countries in purple have “soft pegs;” countries in orange have “hard pegs;” and countries in magenta have other arrangements.

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of the Congo, Togo, United Arab Emirates, and Venezuela.144

In African countries with exchange rates, capital controls have become increasingly popular as a means to stabilize fluctua-tions in currency exchange rates, which can threaten trade balances and macroeconomic stability.145 States with these exchange rate policies typically rely heavily on stable capital flows for their economic management. Along the same lines, capital flight can doubly disrupt states’ development strategies when it occurs unexpectedly or in high concentrations.

A general trend is that the more democratic characteristics a developing country possesses, the more opposed it is to capi-tal flight and the fewer outflows stem from the state.146 With more democratic institutions, countries’ political preferences better reflect the wider populace, meaning that democratic countries are likely to institute more serious restrictions on capital, as capital flight typically benefits the wealthy. Higher levels of democracy also imply preferences lower levels of corruption, a critical means of limiting capital flight.

Floating Exchange Rate and Centralized Re-gimes

Highly centralized countries will be more likely to support capital flight since its key political actors, small sets of well-connected individuals they benefit from a free flow of capital. Centralized authority over political and economic institutions generally are generally signs of easy movement of capital into and out of the country, and often these countries are vulnera-ble to corruption as well. Factors that may qualify a country in this bloc are policies that place limits on transparent elections, a lack of government checks and balances, citizen participa-

144 Ibid. 145 Alami, Ilias Alami, “Post-Crisis Capital Controls in Developing and Emerging Countries: Regaining Policy Space? A Historical Material-ist Engagement,” Review of Radical Political Economics, February 2019, https://journals.sagepub.com/doi/pdf/10.1177/0486613418806635.146 “Illicit Financial Flows to and from Developing Countries 2006 - 2015 (DOTS),” Global Financial Integrity, accessed 27 June 2019, https://gfintegrity.org/data-by-country/. 147 Alexandra Ma, “The 30 Most Authoritarian Regimes in the World,” Business Insider France, 4 February 2018, accessed 9 September 2019, http://www.businessinsider.fr/us/economist-intelligence-unit-2017-democracy-index-worst-countries-2018-1.148 Ibid. 149 Coppola, “How Capital and Exchange Controls Affect International Trade.”150 Coppola, “How Capital and Exchange Controls Affect International Trade.”.151 “Mandate and Key Functions,” UNCTAD, accessed 27 June 2019. https://unctad.org/en/Pages/DITC/CompetitionLaw/ccpb-Man-date.aspx. 152 “Mandate and Mission,” UNCTAD, accessed 27 June 2019, https://unctad.org/en/pages/gds/Economic Cooperation and Integra-tion among Developing Countries/Mandate-and-Mission.aspx. 153 “Mandate and Key Functions,” UNCTAD, accessed September 22, 2019, https://unctad.org/en/Pages/DITC/CompetitionLaw/ccpb-Mandate.aspx.154 Ibid.

tion in politics, and freedom of expression.147 Some examples countries in this bloc include Afghanistan, Chad, Eritrea, Iran, Kazakhstan, North Korea, Turkmenistan, and Viet Nam.148

Floating exchange rates are a natural consequence of coun-tries that want their capital to move freely and have histori-cally been considered a good way to manage the economy.149 As maintaining a fixed exchange rate requires strong capital controls, countries with a floating exchange rate naturally have reduced incentives to erect capital controls.150 However, al-though these countries do not want to implement capital con-trols, they do appreciate stable regulation of capital in order to maintain their economy, and thus will look to limit the abil-ity of international investors to exploit differences in transfer pricing across their economies.

Committee Mission

UNCTAD’s mission is to integrate developing countries into the world economy by fulfilling three main functions: provid-ing a forum for intergovernmental deliberations, undertaking relevant research and policy analysis, and spreading technical assistance to.151 The organization’s mission is to build up eco-nomic decisions and support cooperation between developing countries.152 UNCTAD’s role in the world economy has many varying facets, however providing a space for discussion and debate surrounding economic phenomena is one of its most critical.153 Allowing states to discuss their economic policies helps UNCTAD further its goal of increased competition and protecting consumers.154 Through this, UNCTAD can also help states and other organizations create direct links between

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competitive trade policy and development.155

Due to capital flight’s long-term impact and consequences for not only the African continent, but the world as a whole, combating it should be a top priority for the committee. Its direct impact on developing economies clearly ties to UNC-TAD’s mandate of removing obstacles for these states and by working to eliminate capital flight, the opportunities for in-debted African economies can become much more expansive. Failing to address this issue in either UNCTAD or any other capital will maintain a dangerous status quo for the continent’s economies.

The proper solutions for capital flight are not simple reforms and will require a comprehensive approach from all parties involved. Delegates are encouraged to think of the issue on the broad scope of the global economy as well as from their country’s perspectives.

155 Ibid.

Two officials pose in front of a sign for UNCTAD

UNCTAD

NHSMUN 2020

Photo Credit: Kevin Hutchinson

Topic B:The Effects of Increasing Protectionism in Global Trade

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Introduction

1 Regine A. N. Fouda, “Protectionism and Free Trade: A Country’s Glory or Doom?,” International Journal of Trade, Economics and Finance 5, Vol. 3 (October 2012), accessed 27 June 2019, https://pdfs.semanticscholar.org/6d2a/14b98280f98e67f129c8dce66081614c7f64.pdf.2 Ibid.3 “Dispute settlement activity – some figures,” World Trade Organization, accessed 21 July 2019, https://www.wto.org/english/tratop_e/dispu_e/dispustats_e.htm.4 Ibid.5 TD/519/Add.2, “Nairobi Maafikiano; From decision to action: Moving towards an inclusive and equitable global economic environment for trade and development,” 5 September 2016, accessed 27 July 2019, https://unctad.org/meetings/en/SessionalDocuments/td519add2_en.pdf.6 Arthur S. Guarino, “The Economic Effects of Trade Protectionism,” Focus Economics, last modified 1 March 2018, https://www.focus-economics.com/blog/effects-of-trade-protectionism-on-economy.7 Ibid.8 Ibid.9 Ibid.

Current trends in global trade reflect an increasing divergence in worldwide economic manage-ment—although the global economy of the past two decades has been largely characterized by open barriers to trade, protectionism, or the institution of barriers to trade at the national level in domestic motivations for the adoption of varied economic policies, specifically in the spirit of either free trade or protectionism.1 Understanding the aims of free trade and protectionism, both throughout history and in the context of recent economic and political events, is crucial to the evaluation of risks that protectionism poses to the health of the international economy and global trade activity.

Protectionism, at its core, is motivated by a country’s or group’s desire to protect its own interest by disengaging with other individuals, usually through a restriction of economic activity.2 The global community has recently observed a stark increase in protectionist measures taken against free trade; from 2017 to 2018, the number of consultations requested annually within the World Trade Organization (WTO) trade dispute settlement framework more than doubled from 17 to 38.3 This is the highest year-over-year increase reported in WTO history.4 Witnessing such a strong surge in filed trade disputes raises alarm within the international community, es-pecially among bodies like the United Nations Conference on Trade and Development (UNCTAD) that seek to maximize multilateral trade benefits for the global economy and particu-larly for developing economies.5

If protectionist measures become even more widely used and trade disputes continue to grow in frequency and severity, then the free trade practices supported by organizations like the United Nations, UNCTAD, and the WTO may be com-promised. The growth of protectionism has the potential to decrease market access for developing states and economies, leave current and future trade negotiations and agreements without structural support, restrict global supply chains, and

reduce consumer access to internationally produced and dis-tributed goods. Without steps to bolster free trade and mini-mize the damaging effects of stringent protectionism, the health of the global economy will as trade continues to face restrictions; for this reason, UNCTAD must urgently consider the pivotal impact of protectionist policies on international trade.

History and Description of the Issue

Historical Foundations and Trends

Protectionism in economics refers to the process of shielding domestic industries and interests from foreign competition.6 For international trade, this typically means the creation of trade barriers to foreign goods, particularly ones that com-pete with domestic alternatives.7 Within a state, protectionism is usually motivated by domestic political pressures; on the international stage, it can quickly escalate into a competitive process of attempts to cripple other countries’ industries.8

Protectionist measures are often implemented by countries in an attempt to limit free trade through various means.9 Free trade, for the purpose of this background guide, will be de-

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fined as the process of increasingly liberalizing, or reducing barriers to trade.10 Protectionist policies have been imple-mented by numerous countries worldwide since the initial-ization of international trade. These policies have evolved as national, regional, and global markets and economies respond to different pressures and developing infrastructure, but their motivations remain constant.11

Historically, the most severe protectionist measures taken to limit foreign interference within national economies have been trade embargoes.12 Their implementation most closely parallel clear political rifts or, in some cases, declarations of war be-10 Ibid; Regine A. N. Fouda, “Protectionism and Free Trade: A Country’s Glory or Doom?,” International Journal of Trade, Economics and Finance 5, Vol. 3 (October 2012), accessed 27 June 2019, https://pdfs.semanticscholar.org/6d2a/14b98280f98e67f129c8dce66081614c7f64.pdf.11 Simon J. Evenett and Johannes Fritz, “The Tide Turns? Trade, Protectionism, and Slowing Global Growth,” Center for Economic Policy Research, last modified 2015, https://www.alexandria.unisg.ch/253015/1/GTA18.pdf.12 George Shambaugh, “Embargo – International Law,” Encyclopaedia Britannica, last modified 10 May 2019, https://www.britannica.com/topic/embargo-international-law.13 Ibid.14 Ibid.15 Ibid.16 Christine Leung, “10 Examples of Trade Embargoes,” The Borgen Project, accessed 21 July 2019, https://borgenproject.org/examples-of-

tween two or more countries.13 Trade relations are inherently contentious as trade barriers affect other states unequally.14 In cases where a single good represents the entire perceived threat to the state, either through foreign competition, health and safety concerns, environmental effects, or other motiva-tions, states have also instituted embargoes against specific goods rather than all imported items from one country.15 The United States has been the state to most frequently and pub-licly institute embargoes, and has maintained a full embargo against Cuba since 1962 that conclusively ended all trade be-tween the two states as a result of the Cold War and politi-cal and military conflict.16 The United Nations, as well as the

This graph shows a global protectionist policy index from 2008 to 2013, per country, as calculated by Global Trade Alert. This coincides with the 2008 recession and its aftermath

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EU, have been known to enact embargoes centered around specific goods against states displaying undesirable political, economic, or social behavior in an attempt to economically force the country or group to act in a different manner.17 Ex-amples of ongoing mandatory arms embargoes established by the UN Security Council include those against the Demo-cratic People’s Republic of Korea (DPRK), the Taliban, and ISIL, Al-Qaeda and associated individuals.18

Another regulatory measure that can be, but is not always, used as a protectionist policy is the imposition of sanctions against a state. Economic sanctions are typically clearly-stated official policies released by one state, a bloc of states, or a multilateral organization that restrict commercial activity re-lated to a specific state, region, business, group, or individual.19 Similarly to trade embargoes, economic sanctions are used to make a publicized statement of expressed distrust or an un-willingness to work with certain parties.20 Although there is certainly a resulting economic impact, namely a limitation to market access on the part of producers and restricted access

trade-embargoes/.17 “Arms embargoes,” Stockholm International Peace Research Institute, accessed 27 July 2019, https://www.sipri.org/databases/embargoes.18 Ibid; “Subsidiary Organs of the United Nations Security Council,” United Nations Security Council, last modified 8 February 2019, https://www.un.org/securitycouncil/sites/www.un.org.securitycouncil/files/subsidiary_organs_factsheets.pdf.19 Jonathan Masters, “What are Economic Sanctions?,” Council on Foreign Relations, last modified 7 August 2017, https://www.cfr.org/back-grounder/what-are-economic-sanctions.20 Ibid.21 Ibid.22 “Subsidiary Organs of the United Nations Security Council,” United Nations Security Council, last modified 8 February 2019, https://www.un.org/securitycouncil/sites/www.un.org.securitycouncil/files/subsidiary_organs_factsheets.pdf.23 Ibid.24 Ibid.25 Simon J. Evenett and Johannes Fritz, “The Tide Turns? Trade, Protectionism, and Slowing Global Growth,” Center for Economic Policy Research, last modified 2015, https://www.alexandria.unisg.ch/253015/1/GTA18.pdf.26 Ibid.

to various goods on the part of consumers, most repercus-sions of economic sanctions are intended to be political, as many policy-holders express a willingness to remove sanc-tions once the sanctioned party adjusts its behavior or meets outlined requirements.21 One example of ongoing multilateral sanctions are those that the UN Security Council has enacted against the DPRK, which includes the previously mentioned arms embargo.22 In addition, the DPRK is subject to targeted asset freezes and travel bans, sectoral sanctions concerning various natural resources, food and agricultural products, and energy sources, as well as those aimed at proliferation net-works.23 The UN is unlikely to lift these sanctions against the DPRK until the designated sanctions committee, formed un-der the Security Council, has affirmed the compliance of the state and targeted individuals or groups with designated stan-dards to halt nuclear and ballistic missile testing.24

There are many additional protectionist policies that states have implemented in the past, and several of those will be discussed throughout this background guide. In order to bet-ter understand the origins of protectionism, particularly in recent history and drawing from previously stated informa-tion related to trade embargoes and economic sanctions, it is important to consider the historical trends and clear indicators of protectionist agendas worldwide.

The most recent global economic crisis that generated a nota-ble rise in protectionism and continues to impact the strategic policies employed by businesses, governments, and institutions today is the economic recession of 2008.25 Immediately fol-lowing the recession, beginning with observable data in 2009, many countries instituted protectionist measures to minimize the severity of economic fallouts experienced domestically in the aftermath of the initial decline.26 From the fourth quarter,

This photo depicts one of several meetings convened by the United Nations Se-curity Council to discuss international actions taken in response to the DPRK’s testing and possible use of nuclear weapons

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or last three months, of 2008 to the first quarter of 2009,

the number of trade distortions—changes made to trade poli-

cies, which in this case favored protectionism—increased by

an average 40% worldwide.27 Numerically, this means that

protectionist measures in the last quarter of 2008 numbered

approximately 55–120, depending on which global economic

report the figures were pulled from.28 The corresponding data

from the first quarter of 2009 showed protectionist measures

numbering between approximately 150 and 270.29

Understanding these numeric indicators is extremely impor-

tant to developing a comprehension of the effect of econom-

ic contraction on global trade policies. From this data, it is

clear that when countries feel that their economic security and

conditions are threatened, protectionist measures are the most

desired solution to attempt to minimize the existing threat.30

These actions, while most drastically implemented as an im-

mediate response to the economic crisis, continue to exist for

significant amounts of time following the crisis; in the case of

the 2008 crisis, the report that reflected the minimum number

of protectionist policies instituted worldwide did not return

to its original level at the time of the 2008 crisis until quarter

three of 2011—almost three years after the crisis itself.31 This

return to 2008 levels did not remain constant either, as politi-

cal and economic pressures in later years have also resulted in

spikes and subsequent revocations of protectionist policies.32

On the whole, however, it is safe to conclude that the 2008

financial crisis redefined the global view of protectionist mea-

sures, particularly during conflict response, and this shift in

historic trends has been sustained over the past decade.33

27 Ibid.28 Ibid.29 Ibid.30 Ibid.31 Ibid.32 Ibid.33 Ibid.34 Daniel Ben-Ami, “World Trade: Is protectionism on the rise?,” Investment & Pensions Europe, last modified February 2017, https://www.ipe.com/investment/briefing-investment/world-trade-is-protectionism-on-the-rise/10017403.article.35 “United Nations Security Council – Current Members,” United Nations, accessed 7 July 2019, https://www.un.org/securitycouncil/con-tent/current-members.36 Ibid.37 Daniel Ben-Ami, “World Trade: Is protectionism on the rise?,” Investment & Pensions Europe, last modified February 2017, https://www.ipe.com/investment/briefing-investment/world-trade-is-protectionism-on-the-rise/10017403.article.

Political Tensions Creating Economic Uncer-tainty

Undoubtedly, there are ties between political tensions or so-cial unrest and periods of economic uncertainty, which are observable through a historical lens as well as the current po-litical climate.

Historically, times of war have created the most significant disruptions to international trade.34 This is particularly true in consideration of the aftermath of World War II, as the United Kingdom, France, the Soviet Union, the United States, and China not only divided territorial authority of other states or regions among themselves, but also instituted control over the economies of their opposing states.35 The international political and economic power gained as a result of post-war settlements related to this conflict has been fairly well-retained by those states, as each of those five countries holds a perma-nent seat on the UN Security Council and is consistently able to include military, political, social, and economic decisions made by the United Nations, its agencies, and other multilat-eral organizations.36 Comparatively, those states who were not named as victors of the second world war struggled for de-cades, and in many cases continue to work, to gain economic power and level the global economic playing field in order to facilitate the entrance of other countries and regions to finan-cial markets and international trading.37

Another significant historical trend that points to economic uncertainty for some states as a result of political tensions is that of colonization and the efforts made by occupied territo-ries to gain independence. The vast majority of global politi-cal powers did not favor the dissolution of territorial empires

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and instead sought to prevent former colonies from access-ing resources or engaging in trade once they gained indepen-dence.38 The ramifications of such motivations can be easily observed within Africa, as many states continue to stay on the list of least developed countries (LDCs) due to the impact of colonization and proxy wars created through conflict between developed countries that took place on the African continent, especially during the Cold War, and ongoing political and eco-nomic instability.39

Considering cases of current political tensions related to eco-nomic uncertainty or instability, it is crucial to examine the cases of the United States and China, Europe, and South America. Arguably, the most publicized political tensions re-sulting in economic uncertainty and highly protectionist mea-sures are those between China and the United States.40 Ardent actions taken with protectionist motivations have been both states’ imposition of tariffs on the other, thereby resulting in higher prices for both Chinese and American consumers. The full result of this battle through tariffs remains unclear, although it is fair to conclude that if prices continue to rise and the diplomatic relationship between the United States and China continues to weaken, then bilateral trade between the two countries will decrease and they will each turn to other countries to supplement the trade lost.41 It is not clear, how-ever, what the ramifications may be on states other than the United States and China, as developed countries with high production capacities may stand to gain economic benefits from the ongoing tensions, while less developed economies may face greater strains as their access to goods and markets may be redefined or reduced through the reorganization of China and the United States. To minimize the severity of economic threat posed through tensions between the Unit-ed States and China, many states and regional coalitions are 38 Michael Kitson and Jonathan Michie, Managing the Global Economy, “Trade and Growth: A Historical Perspective,” Oxford, UK: Ox-ford University Press, 1995, accessed 27 June 2019, https://books.google.com/books?hl=en&lr=&id=q7PQutu1ZM4C&oi=fnd&pg=PA3&dq=historical+trade+protectionism&ots=bqXI1g7P8z&sig=W9YHuNEIMbpXC4AaG7DBbQdIZV0#v=onepage&q=historical%20trade%20protectionism&f=false.39 Ibid.40 Daniel Shane, “The US-China trade war could benefit Europe, Mexico and Japan,” CNN Business, last modified 5 February 2019, https://www.cnn.com/2019/02/05/business/us-china-trade-war-europe/index.html.; Michael Spence, “These are the real threats to the global economy in 2019,” World Economic Forum, last modified 27 March 2019, https://www.weforum.org/agenda/2019/03/these-are-the-real-threats-to-the-global-economy-in-2019/.41 Ibid.42 Ibid.43 “Report on G20 Trade Measures,” World Trade Organization, last modified 2011, https://www.wto.org/english/news_e/news11_e/g20_wto_report_may11_e.doc.; “Political Risk Map 2019,” Marsh & McLennan Companies, last modified 2019, https://www.marsh.com/us/insights/research/political-risk-map-2019.html.

strengthening their trade relationships outside of those two states, and should continue to do so to better secure imports and exports in spite of the trade war and to facilitate contin-ued international trade regardless of how the trade war may be resolved. Some countries may also consider forming eco-nomic or political ties with either, or both, the United States or China, since one possible outcome of the trade war is for those two countries to cease bilateral trade and look elsewhere for imports and exports of the goods that they currently re-ceive from each other.42

Another area of political tension is that of the EU, where multiple political and social pressures have resulted in various degrees of trade uncertainty moving forward. The most obvi-ous is Brexit, since the potential exit of the United Kingdom from the EU would necessitate a consideration of trade rela-tionships between the United Kingdom and other EU mem-ber states.43 Without membership in the EU or an exit deal that includes a trade agreement, the UK would lose access to beneficial trading conditions with current member states,

Shown here is a bilateral meeting between Chinese President Xi Jinping and US President Donald Trump in November 2017, prior to the development of signifi-cant trade tensions

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thereby potentially limiting its own economic growth and ac-cess to imported goods, as well as restricting EU access to goods produced within the UK. The most important factor of this political uncertainty is related to negotiations, since that will be the defining factor in whether or not the United Kingdom exits the EU with any preferential trade policies.44 The other possible repercussions to consider are the impacts that Brexit may have on the economies and political stability of developing states.

South America also represents a region of countries with widely varied economic policies that are strongly influenced by political pressures. Chile, one of the continent’s states that most favors free trade, saw an increase in its economic sta-bility related to political development, primarily through its 2017 presidential election, the results of which lowered un-employment and saw economic growth measures increase.45 Comparatively, political protests occurring in Nicaragua have decreased its economic stability and generated some econom-ic decline.46 Similar trends can be observed in Venezuela, and Brazil has seen an increase in protectionist measures tied to its political leadership, as well.47

Tariffs and Other Trade-Regulating Mecha-nisms

Tariffs are one of the most commonly used protectionist poli-cies implemented by countries that are interested in reduc-ing trade with one or more of its existing trading partners or increasing domestic demand for specific goods.48 Tariffs are usually defined as the taxes placed on imports from other countries or certain foreign markets.49 These taxes increase the price of the imported good that is purchased by the consum-44 Ibid.45 “Political Risk Map 2019,” Marsh & McLennan Companies, last modified 2019, https://www.marsh.com/us/insights/research/political-risk-map-2019.html.46 Ibid.47 Ibid.48 Arthur S. Guarino, “The Economic Effects of Trade Protectionism,” Focus Economics, last modified 1 March 2018, https://www.focus-economics.com/blog/effects-of-trade-protectionism-on-economy.49 Ibid.50 Ibid.51 Ibid.52 Ibid.53 Ibid.54 Ibid; “Protectionism: The practice of following protectionist trade policies,” Corporate Finance Institute, accessed 27 June 2019, https://corporatefinanceinstitute.com/resources/knowledge/economics/protectionism/.55 Arthur S. Guarino, “The Economic Effects of Trade Protectionism,” Focus Economics, last modified 1 March 2018, https://www.focus-economics.com/blog/effects-of-trade-protectionism-on-economy.56 Ibid.

er—a person residing in the country that has placed the tariff on that good.50 Through the imposition of taxes, the increas-ing price of the imported good results in a decreased demand for that good, thereby reducing the profits received by foreign producers and decreasing economic growth observed by the country, or countries, where the good was produced.51

In addition to reduced demand for foreign goods, tariffs have significant effects on the national level. In regard to the coun-try that institutes tariffs on foreign imports, the consumers of that country will face more limited choices of products that they can purchase due to a limited supply.52 Customers may also be required to pay more for the goods that they pur-chase, whether they purchase higher priced foreign goods or their domestic equivalents, which are able to increase prices as a result of constricted competition.53 Other areas of con-cern include reduced motivation for innovation and effective production methods, which arise through the restrictions on foreign competition.54 Outside of these effects experienced by the regulating country, individuals in the regulated coun-try will suffer from declining standards for quality of life due to decreased stimulation of the national economy and fewer resources entering the country.55 There is also the risk that infant industries within developing states will not be able to develop properly or successfully because they will not be able to actively compete through global trade and future potential for innovation will be constricted by limited resources and fi-nancial assets.56

Other measures that may be implemented by governments to boost domestic economic activity while decreasing foreign competition include the imposition of quotas—restrictions

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on the acceptable quantity of imports of a specific good or service—the provision of subsidies to lower production costs for domestic producers, and the creation of regulations that standardize the production and quality of certain goods, meaning that goods not meeting the set standard will not be imported by the regulating country.57 These policies are some examples of non-tariff measures (NTMs) that still work to boost domestic production and profit by limiting national ac-cess to or interaction with global markets.58

Although NTMs may negatively affect developed countries or their consumers, the most obvious economic restrictions fall on developing economies, especially the economies of LDCs.59 A few NTMs that may place restrictions on the par-ticipation of developing states in international trade include emission standards for cars and other types of transportation vehicles, specifications on the packaging of goods, restrictions on pesticides used in the growth of agricultural products in an attempt to ensure food safety, and limitations on the type and quantity of toxins contained in goods like children’s toys.60 These NTMs represent regulatory measures that states may institute outside of traditional tariffs and quotas that reduce developing countries’ abilities to export to developed coun-tries or force producers within developing states to revise their production processes in order to meet the established standards.61 Without economic support and access to resourc-es, however, it is exceptionally difficult for developing states to meet the demands of developed countries.62

It is also worth noting that NTMs are not only employed by developed countries in an attempt to achieve standardization of goods or to reduce competition from developing markets;

57 “Protectionism: The practice of following protectionist trade policies,” Corporate Finance Institute, accessed 27 June 2019, https://corpo-ratefinanceinstitute.com/resources/knowledge/economics/protectionism/.58 Ibid.59 Jaime de Melo and Alessandro Nicita, “The implications of non-tariff measures for developing countries’ exports,” Center for Economic Policy Research, last modified 4 May 2019, https://voxeu.org/article/implications-non-tariff-measures-developing-countries-exports.60 “The Unseen Impact of Non-Tariff Measures: Insights from a new database,” UNCTAD, last modified 2017, https://unctad.org/meet-ings/en/SessionalDocuments/ditc-tab-MC11-UNCTAD-NTMs.pdf.61 Ibid.62 Ibid.63 “Project tackles non-tariff barriers in Africa,” UNCTAD, last modified 21 March 2019, https://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=2022.64 Ibid.65 Ibid.66 “World Commodity Prices and their Impact on Developing Countries,” Overseas Development Institute, accessed 27 June 2019, https://www.odi.org/projects/1481-world-commodity-prices-and-their-impact-developing-countries.67 Ibid.68 Ibid.

developing states also utilize NTMs for similar reasons.63 One example of that usage was a confrontation between Zambian traders exporting molasses to Botswana in December 2016 and border officials who requested certification documents in order to allow the molasses to enter Botswana.64 Later, it was established that Botswana does not have an official regu-latory measure on the type of molasses that was being ex-ported from Zambia, and those goods were allowed to enter the country; however, the delay caused by border officials re-quiring specific documentation represents one consequence of NTMs on the exporting party, since the traders’ profits would have been eliminated if Botswana continued to refuse entry for those goods.65

Disturbances in Commodity Prices and Cur-rencies

There are numerous negative impacts on commodities ex-ported by developing countries. The most significant reper-cussion of protectionist measures regarding commodities is the observable decrease in price generated through decreas-ing demand in developing countries.66 As states impose regu-lations on commodities that are imported from developing countries, such as agricultural products or raw materials like wood, precious metals, and minerals, prices for those imports rise.67 This rise in the price of commodities shifts demand from imports to subsidized domestic producers in the regulat-ing countries.68 As the domestic supply of agricultural com-modities increases, there is less need for large quantities of imports from developing states, thereby reducing demand and requiring the reduction of prices, which reduces overall profit

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and economic growth.69

By limiting economic growth, as well as decreasing prices and limiting developing countries’ access to the international market and global demand, developed countries are working to retain their existing economic power without providing any assistance to developing economies.70 In other words, by creating trade barriers, developed states are effectively limit-ing the growth potential of developing economies, thereby placing those developing states in an increasingly unfair posi-tion with no opportunities to become more prosperous or participate more fully in the global economy. Through limita-tions to, or reductions of, global trade, the GDP of devel-oping countries falls, and there are correlating consequences in the value of national currencies.71 Without generating eco-nomic growth and profits, and with the corresponding issu-ance of new currency by national government, the value of developing countries’ currencies increasingly falls below that of developed countries and is at the mercy of market trends and fluctuations. This poses an increased risk to all citizens of developing countries, as their economic welfare may be jeopardized by severe or unexpected market setbacks, either through large economic crises, regional disruption, or shifts within industries.72

Facilitating and Preserving Trade Agreements and Negotiations

The future of existing trade agreements, as well as any current or future negotiations, is extremely uncertain when impacted by protectionism, such as the aforementioned cases of China and the United States and the European Union.73 Bilateral trade agreements between the United States and China are at risk of falling through with the increasing imposition of retaliatory tariffs, and the United Kingdom is at risk of leaving

69 Ibid.70 Ibid; “Commodities, Rainfall, Instability Biggest Challenges—African Ministers,” International Monetary Fund, last modified 8 October 2016, https://www.imf.org/en/News/Articles/2016/10/08/AM16-NA100816-Commodities-Rainfall-Instability-Biggest-Challenges-Afri-can-Ministers.71 Ibid.72 Ibid.73 Daniel Shane, “The US-China trade war could benefit Europe, Mexico and Japan,” CNN Business, last modified 5 February 2019, https://www.cnn.com/2019/02/05/business/us-china-trade-war-europe/index.html.74 Ibid.75 Ibid.76 Paul Brenton and Miriam Manchin, “Analysis: Trade agreements fail to deliver for developing nations,” Politico, last modified 4 December 2014, https://www.politico.eu/article/analysis-trade-agreements-fail-to-deliver-for-developing-nations/.

the EU without any trade agreement to continue its partner-ship with any or all of the EU member states.74 As other de-veloped countries institute protectionist policies, they run the same risk of economic restrictions through an unwillingness to participate in global economic activity.

Additionally, states not implementing protectionist policies are at risk of suffering in the limitation of trade negotiations in the future. Protectionist countries’ unwillingness to partici-pate in global trade by favoring domestic producers in official policies, as well as more discrete actions, result in a limited desire by those protectionist, mostly developed countries to engage in trade negotiations and construct trade agreements with other states.75

Looking at this issue on a regional level, the Balkan region of Europe has suffered as a result of exclusive trade poli-cies and negotiations with the EU.76 The EU’s existing trade policies are intended to provide developing countries with in-creased market access through preferential trade agreements with LDCs and other developing countries, including stabili-zation agreements with countries in the Balkans. Although the policies may appear preferential in writing, their implementa-tion has been limited, particularly in the case of textiles and clothing products exported from the Balkans. The textile and clothing industries represent a significant amount of indus-trialization and revenue opportunities for Balkan states, but the EU has historically only granted preferential trace condi-tions to around 30% of eligible exports in those industries. This low acceptance rate of preferential imports by the EU is a result of its strict requirements regarding rules of origin and other administrative processes; until those processes are streamlined or the regulatory measures change, developing countries will continue to suffer from restricted treatment in

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trade agreements and limited market access.77

Although it is a more dated example, the Doha Round of trade negotiations through the WTO presented exceedingly difficult and prolonged challenges to the organization and participating states.78 Facilitated discussion about trade ne-gotiations began in 1997 and the Doha Round was officially launched in 2001, but the refusal of developed countries like the United States and members of the EU to lower restric-tions on imports from developing countries, especially in the agricultural sector, pushed the negotiations into deadlock on multiple occasions.79 This was especially true in 2008 around the time of the global financial crisis, when developed coun-tries began to place increasing importance on holding their ground and defending their standardization of goods during trade negotiations.80 Because of the difficulty faced through these WTO negotiations, positive implications of the Doha Round have been mostly restricted to the Bali Package in 2013 and the Nairobi Package in 2015, the latter of which made some ground in expressing international desire to reduce the marginalization of developing economies moving forward.81 It is currently unclear how long lasting those desires will be and how successful the corresponding aid packages will be in reducing production and trade disadvantages present within LDCs and developing economies.82

Effects of Trade Disturbances on Global and Regional Development

The most obvious negative effects of protectionism are not experienced by most of the countries implementing protec-tionist measures, but rather by states with developing econ-omies that are largely dependent on the international trade

77 Ibid.78 “The Doha Round,” World Trade Organization, accessed 14 July 2019, https://www.wto.org/english/tratop_e/dda_e/dda_e.htm.; Kim-berly Amadeo, “Doha Round of Trade Talks,” The Balance, last modified 25 June 2019, https://www.thebalance.com/what-is-the-doha-round-of-trade-talks-3306365.79 Ibid.80 Ibid.81 Ibid; “Nairobi Ministerial Declaration,” World Trade Organization, last modified 19 December 2015, https://www.wto.org/english/thewto_e/minist_e/mc10_e/mindecision_e.htm.82 Ibid.83 Jaime de Melo and Alessandro Nicita, “The implications of non-tariff measures for developing countries’ exports,” Center for Economic Policy Research, last modified 4 May 2019, https://voxeu.org/article/implications-non-tariff-measures-developing-countries-exports.84 Ibid.85 Michael Ferrantino, “Supply chains and behind-the-border trade barriers: Implications for developing nations,” Center for Economic Policy Research, last modified 11 February 2012, https://voxeu.org/article/why-non-tariff-measures-matter-more-world-sliced-supply-chains.86 Ibid; Mark Zandi et al., “Pride and Protectionism: U.S. Trade Policy and its Impact on Asia,” Moody’s Analytics, last modified October 2018, https://www.economy.com/getlocal?q=87319467-6a15-4d93-ab33-d2dbe2f74a99&app=eccafile.

market for the facilitation of import and export activities.83 Without sustained levels exports generating income for pro-ducers within developing states and holistic economic growth for these developing countries, there are numerous risks of economic, social, and political crises that may result.

With regard to development, the most risky result of trade disturbances is that of limited market access for developing countries and their citizens.84 Without access to the global trade market, developing countries will be forced to create their own production processes for various goods or find ways to do without those necessities, which may include food or medicinal products.85 Such examples are dairy products, meats, specialty or prepared and packaged food products, pharmaceutical drugs, and chemical and medical supplies required to maintain healthcare services at local hospitals or clinics.86 Foregoing access to these goods would be extremely detrimental to developing states, since the development of in-

This is a demonstration of vaccination processes used in Ethiopia to eradicate the polio disease and to advocate for sustained immunization efforts worldwide dur-ing the Financing for Development Conference in 2015

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ternal, domestic production systems for these goods would require time and resources that are not readily available.87 There would also be notable humanitarian repercussions, as restrictions on access to food and medicine may result in food insecurity or outbreaks of global health epidemics, especially in regions where professional medical care is unavailable.88

Some examples of large scale development concerns were presented at the Third International Conference on Financing for Development in July 2015 by finance ministers and senior officials from small island developing states (SIDS), LDCs, and other developing countries in Africa and the Middle East.89 Several of the ministers explained that developed countries were not following through on their pledged economic aid to developing states, and the non-receipt of anticipated aid helped to exacerbate existing issues like unemployment, debt burdens, restricted production capacities, and other economic and trade constraints.90 In addition, developing countries like Malawi, Zimbabwe, and South Africa urged developed coun-tries to provide promised Official Development Assistance (ODA) so that they and other developing states could sup-port national and regional efforts to finance basic healthcare, improve infrastructure, and meet the energy needs of their populations.91

Other areas that may be affected by trade disturbances include national political stability, which in many cases relates directly to the national banking and financial sectors. Protectionism has a high potential for increasing unemployment, especially within developing countries, due to decreasing demand for goods and services that results in a falling GDP for those developing countries followed by decreased standards of liv-ing.92 As national and individual economic conditions deterio-rate within developing countries, it is likely to produce unrest, with much of that potentially directed at political leadership. 87 Ibid.88 Ibid; Arthur S. Guarino, “The Economic Effects of Trade Protectionism,” Focus Economics, last modified 1 March 2018, https://www.focus-economics.com/blog/effects-of-trade-protectionism-on-economy.89 DEV/3187, “As Developing Countries Strive to Enhance Economic Performance, Developed Partners Should Honour or Surpass Aid Pledges, Addis Conference Hears,” United Nations Economic and Social Council, 14 July 2015, accessed 27 July 2019, https://www.un.org/press/en/2015/dev3187.doc.htm.90 Ibid.91 Ibid.92 Ibid.93 Arthur S. Guarino, “The Economic Effects of Trade Protectionism,” Focus Economics, last modified 1 March 2018, https://www.focus-economics.com/blog/effects-of-trade-protectionism-on-economy.94 “Dispute settlement activity – some figures,” World Trade Organization, accessed 21 July 2019, https://www.wto.org/english/tratop_e/dispu_e/dispustats_e.htm.

Conflicts resulting from political and economic unrest will de-flect government attention from development to controlling the people, thereby setting back infrastructure expansion and related projects. In fact, the Iranian government faced chal-lenges in June 2019 as civil unrest and foreign political pres-sure shifted focus from sustained access to technology and oil exports. Students held rallies to protest mandatory hijab regulations at the University of Tehran, and these activities, which were spurred by social media outcries about students’ freedom of expression and the right to choose how to dress, became the focus of government attention and regulatory ac-tion in the form of increased censorship or restricted tech-nology access was considered as a result. In addition to direct repercussions on the local or national level, as seen in Iran, cases of civil or social unrest may increase regional or global tensions between countries, which then puts all countries, es-pecially developing ones, at risk of becoming involved in mili-tary conflict.93

Current Status

Significant Ongoing Trade Disputes

When formalized, trade disputes may take a number of dif-ferent forms throughout the dispute settlement proceedings. The first step to achieve formalization on a global level is for a complaint to be filed with the World Trade Organization (WTO).94 This is done through a request for consultations, during which the complainant party would meet with the re-sponding party to attempt to find an agreeable solution prior to litigation. If the two parties are able to reach an amicable solution, then there are no further measures taken to resolve the dispute; however, if no solution through consultation can be found, then the complainant can request the establishment

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of a panel to consider and find a resolution to the dispute, and the panel’s published decision can later be appealed by either party.95

The WTO’s standing process for facilitating dispute settle-ment through consultations and formulated panels stands tes-tament to the value placed on facilitated dialogue and diplo-macy by international institutions.96 It also represents a more than 20-year old custom that is endangered by the spirit of protectionism when individual countries’ interests are placed above those of other states or the collective global communi-ty. In order to understand the more recent role of dispute set-tlement through the WTO, it would be useful to compare the number of disputes initiated in recent years to those in prior eras. Since 2015, the number of disputes formalized, panels created, and appeals filed have been moderately increasing; however, in 2018, the number of disputes submitted and pan-els created more than doubled from 2017. Almost 40 disputes were initiated and close to 30 panels were established in 2018; the only area that did not show marked growth was that of appeals filed, as that number remained around five, which is equivalent to the previous year. The number of disputes initi-ated is at the highest level it has been since 2002, while the number of panels created in 2018 is the highest number in single-year history, since the creation of the WTO in 1995.97 This sharp increase in dispute settlement proceedings creates significant cause for concern, as it serves as a clear reflection of the impact of protectionist policies and also demonstrates a growing inclination for trade disputes to require external mediation in lieu of bilateral or multilateral diplomatic nego-tiation.

Looking at individual cases of recent trade disputes, two of the states most heavily involved as respondents in WTO-filed 95 Ibid.96 Ibid.97 Ibid.98 “Current status of disputes,” World Trade Organization, last modified 2019, https://www.wto.org/english/tratop_e/dispu_e/dispu_cur-rent_status_e.htm.99 Ibid; “DS580: India – Measures Concerning Sugar and Sugarcane,” World Trade Organization, last modified 2019, https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds580_e.htm.100 “Current status of disputes,” World Trade Organization, last modified 2019, https://www.wto.org/english/tratop_e/dispu_e/dispu_cur-rent_status_e.htm.101 Ibid.102 Ibid.103 Ibid.104 Vanessa Gunnella and Lucia Quaglietti, “The economic implications of rising protectionism: a euro area and global perspec-tive,” European Central Bank, last modified March 2019, https://www.ecb.europa.eu/pub/economic-bulletin/articles/2019/html/ecb.ebart201903_01~e589a502e5.en.html#toc3.

disputes are the United States in 2018 and India in 2019.98 The majority of disputes filed against India, which represent six out of the 10 disputes submitted in 2019, are foregoing consultations and many concern the same subject – measures taken by the Indian government to favor domestic producers of sugar and sugarcane and related export subsidy measures.99 Comparatively, disputes submitted in the previous year against the United States are more varied in topic, ranging from en-ergy and technology trade and production policies to mea-sures taken regarding seafood products.100 Although there are numerous complainant parties opposite the United States, it is also worth noting that the most frequent complainant in 2018 was China.101 This data from 2018 closely mirrors the in-creasing media coverage of, and speculation about, a trade war between the United States and China, while the disputes filed in 2019 may demonstrate a deviation from singular attention on those two states and instead turn an eye toward India and other countries in their imposition of protectionist measures.

Holistically, the major themes of disputes filed with the WTO are also worth consideration, since these may arise in discus-sions surrounding protectionist measures worldwide, or in regard to the most popular conflict between China and the United States.102 A non-exclusive list of some of the most recurring themes include anti-dumping measures, tariffs on specific goods or industries, and measures that limit trade and supply chains related to food products, energy, natural resources, infrastructure development, and technology.103

To focus singularly on the highly publicized tensions, often designated a “trade war,” between China and the United States, the internal politics and motivations for both countries pursuing protectionist action against the other greatly dictates the future development of economic tensions.104 China’s eco-

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nomic capacity continues to increase, although the national government’s regulation of domestic and foreign activity, regarding both production and trade, generates barriers to increasingly favorable conditions for global economic collab-oration.105 Rumored attempts by the state to de-privatize busi-nesses within China, which means restructuring companies so that they fall under government ownership, were met with strong public opposition.106 Although the government denied claims that it sought to secure complete control over the Chi-nese economy and domestic producers, the public response produced shocks of uncertainty and, at times, threatened Chi-nese stability.107 These threats to China’s economic stability worsened as a result of increasing trade-driven conflicts with the United States in late 2018, which have yet to be resolved.108

On the side of the United States in this economic conflict, an increasingly well-defined political movement toward na-tionalism has produced rhetoric and government policies that support protectionism as a means of preserving prosperity and the advancement of US interests.109 Beginning as early as March 2017, current United States President Donald Trump has scrutinized the existence and enforcement of American 105 Yun Tang, “China’s Internal Challenges Will Threaten Xi Jinping’s Reign,” The National Interest, last modified 21 January 2019, https://nationalinterest.org/feature/chinas-internal-challenges-will-threaten-xi-jinpings-reign-41952.106 Ibid.107 Ibid.108 Ibid.109 Vanessa Gunnella and Lucia Quaglietti, “The economic implications of rising protectionism: a euro area and global perspective.”110 Dan Burns and Jonas Ekblom, “Timeline: Key dates in the U.S.-China trade war,” Reuters, last modified 1 August 2019, https://www.reuters.com/article/us-usa-trade-china-timeline/timeline-key-dates-in-the-u-s-china-trade-war-idUSKCN1UR5RW.111 Ibid.112 Ibid.113 Ibid.114 Thomas Heath and Taylor Telford, “Global markets rattled amid Brexit, U.S.-China trade war standoffs; Dow falls nearly 300 points,” The Washington Post, last modified 3 September 2019, https://www.washingtonpost.com/business/2019/09/03/global-markets-wracked-with-

tariffs on Chinese goods with the hope of strengthening those regulatory measures in an attempt to benefit United States industries in competition with China.110 The trade war truly began to manifest in 2018 when China and the United States, almost simultaneously, began to increase tariffs – first on all imports, and then directly on imports from the oppos-ing country.111 As these initial tariffs were instituted, additional protectionist measures began to take form, particularly as re-taliatory tariffs that increased in rate and scope as tensions rose.112 These retaliatory tariffs are the primary manifestation of the trade war between the United States and China, and they represent the most significant threat to all bilateral trade or negotiation and each states’ individual economic prosperi-ty.113

Both the United States and China have contributed to the es-calation of bilateral trade tensions in recent months and it is unlikely that the situation will deescalate until such a time when the nationalistic motivations of both states can be more stringently controlled. Globally, the effects of such motiva-tion are varied by industry, but are also consistently nega-tive.114 Stock market volatility has reverberated through Asia

This graph illustrates the trade imbalance between the US and China, highlighting the moment China joined the WTO

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and North America during August and early September 2019, but the implications of this uncertainty can also be observed in industry production in Europe, Africa, and South America. A few examples of these effects include decreased spending on the manufacturing industry in Japan, the declining market value of iron in China and oil in the Middle East, and reduced interest rates by central banks in Europe, Asia, and Austra-lia.115 Achieving greater stability in this situation is crucial, as such direct conflict between two of the world’s largest na-tional economies has resounding, largely negative effects on global economic stability and development. However, it must be realized through the recognition of both states’ national sovereignty and a willingness on each side to negotiate and compromise.

Ongoing Trends in Protectionist Policies

As has been demonstrated in the elevated usage of WTO dis-pute settlement proceedings, global trends indicate an increas-ing imposition of protectionist policies.116 Outside of WTO data, however, there are other cases in which protectionism has motivated the adoption of certain economic policies.

The Heritage Foundation’s 2018 report analyzed current trends in global trade and assigned trade freedom scores to each country to demonstrate their willingness and ability to participate in the trade-based global economy.117 According to the findings, there is a correlation between free trade and rising national income, better food security and political sta-bility, and healthier environments; therefore, a reluctance by countries implementing protectionist measures to participate in global trade not only decreases their own success in achiev-ing those outcomes, but also restricts developing countries’

anxiety-amid-brexit-us-china-trade-war-standoffs/?noredirect=on.115 Ibid.116 “Current status of disputes,” World Trade Organization, last modified 2019, https://www.wto.org/english/tratop_e/dispu_e/dispu_cur-rent_status_e.htm.117 Bryan Riley and Patrick Tyrell, “2018 Index of Economic Freedom: Freedom to Trade Is a Key to Prosperity,” The Heritage Foundation, last modified 21 November 2017, https://www.heritage.org/sites/default/files/2017-11/BG3266.pdf.118 Ibid; UNCTAD/TDR/2018, “Trade and Development Report 2018: Power, Platforms, and the Free Trade Delusion,” UNCTAD, 2018, accessed 28 June 2019, https://unctad.org/en/PublicationsLibrary/tdr2018_en.pdf.119 UNCTAD/TDR/2018, “Trade and Development Report 2018: Power, Platforms, and the Free Trade Delusion.”120 Ibid.121 Bryan Riley and Patrick Tyrell, “2018 Index of Economic Freedom: Freedom to Trade Is a Key to Prosperity,” The Heritage Foundation, last modified 21 November 2017, https://www.heritage.org/sites/default/files/2017-11/BG3266.pdf.122 Ibid.123 Ibid.124 Ibid.125 Ibid.

abilities to improve their economic, political, and social situ-ations, as UNCTAD referenced throughout its Trade and Development Report in 2018.118 This has been reflected in studies completed by other international organizations, as UNCTAD’s analysis of the status of trade and development in 2018 recognized that the theory-based impacts projected by the Heritage Foundation have manifested within several developing states.119 This is especially true in regard to the contraction of developing state’s abilities to respond to stim-uli, including popular social and political movements.120 Shift-ing focus to the individual trade freedom scores, five parties shared the highest score, marking themselves as the most open to participating in international trade: Hong Kong, Liechten-stein, Macau, Singapore, and Switzerland.121 Members of the European Union hold a collective rank of number 23 out of 183, and the United States falls just behind the EU.122 The trade freedom scores received by many states fall largely along political and geographic lines, as most African, Asian, Middle Eastern, and island states fall below number 50 and comprise most of the middle and bottom of the Heritage Foundation’s list.123 South American countries are not as closely tied as oth-er regional divisions and are therefore scattered throughout the entirety of the list.124

Although the Heritage Foundation’s report may not be fully comprehensive, it does serve as an effective starting point for the analysis of countries’ comparative restrictions on trade, primarily through national or regional legislative policies.125 It also shows that many of the countries that have been re-ported to show increasing protectionist motivations are not currently the most restrictive in their trade policies, although they may become more restrictive in quantifiable measures in

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the future.126

Sustainable Development Goals

With regard to increasing protectionism and its effect on global trade, its most direct connection to the Sustainable De-velopment Goals (SDGs) is the pressure and limitation that it places on goals that are economic in nature. The most rel-evant goal that may be limited or threatened by protectionism is SDG 8: Decent Work and Economic Growth, which aims to “promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.”127 The concluding specification of SDG 8, “for all,” ex-emplifies one of the greatest challenges presented to global economic development by protectionism, which is the reduc-tion of inequalities and maintenance of access to financial and trade markets for developing countries, especially LDCs. The endangerment of economic growth and aid in trade-related matters is addressed by Target A of SDG 8, as well as by the general focus of SDG 10: Reduced Inequalities.”128

The importance of SDG 8 and SDG 10 cannot be overstated in relation to UNCTAD’s mission. One example of UNC-

126 Ibid.127 “Sustainable Development Goal 8,” United Nations, accessed 27 June 2019, https://sustainabledevelopment.un.org/sdg8.128 “Sustainable Development Goal 10,” United Nations, accessed 27 June 2019, https://sustainabledevelopment.un.org/sdg10.129 “Market Access, Rules of Origin and Geographical Indications for the Least Developed Countries,” UNCTAD, accessed 28 August 2019, https://unctad.org/en/PublicationChapters/tc2015d1rev1_S02_P04.pdf.130 Ibid.131 “The Sustainable Development Goals Report 2018,” United Nations, accessed 27 June 2019, https://unstats.un.org/sdgs/files/re-port/2018/TheSustainableDevelopmentGoalsReport2018-EN.pdf.132 Ibid.133 Ibid.

TAD’s commitment to these goals is the project it has sus-tained since 2006 that aims to support LDCs that are members of the WTO in improving market access.129 By collaborating with WTO member states to establish and protect preferential rules of origin for exported goods from LDCs, UNCTAD is actively working with the international community to improve the economic situation of LDCs through increased market access.130

Although they are less directly connected to the issue of in-creasing protectionism, SDGs 1, 2, 3, 7, 9, 11, and 12 all ad-dress various areas of global concern that may be impacted by protectionist measures.131 These areas include poverty, food security and agriculture, access to healthcare and the neces-sary products needed to provide effective care, energy, tech-nology, infrastructure, and production systems.132 Undoubt-edly, if protectionism continues to be utilized with increasing dependence by states that are large contributors to the global economy and provide substantial amounts of aid or trade ac-tivity to developing countries, then the effects suffered within these areas of concern may place the international community at risk of failing to reach multiple SDGs by 2030.133

Bloc Analysis

Protectionist policies are highly variable in their interpreta-tion and implementation by each state. This characterization of the issue means that some countries have clearly defined their position on the appropriate uses of protectionism as an economic strategy, while other states’ positions are more ob-scure and fluid. For this reason, it is important to note that the positions of countries identified as belonging to each bloc only serve as examples of common ideological tendencies, so those countries’ policies, as well as the overarching classifica-tion of countries according to support for protectionism, may either evolve unpredictably or remain stagnant.

This picture shows a wide shot of the Doha Ministerial Conference, held from 9-13 November 2001 in Doha, Qatar. This conference launched the Doha trade round of the World Trade Organization

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Highly Protectionist Countries

The general position held by highly protectionist countries is that defense of national interest or domestic producers super-sedes compliance with international trade standards, bilateral or multilateral trade partnerships, or other global economic standards.134 This position may be expressed either officially through state-issued statements or unofficially through the creation of protectionist economic policies on the national level, or the imposition of protectionist measures noted through WTO-filed disputes.135 There are many states that may fit in this bloc consistently or under certain consider-ations, including an evaluation based on the weighted aver-age applied tariff rate on all products within each country.136 Based on that evaluation, some of the countries that have the highest average applied tariff rates and are thereby consid-ered to be more protectionist in nature are Palau, St. Kitts and Nevis, Bermuda, The Bahamas, Djibouti, Gabon, Central African Republic, and Iran.137 It is also worth noting that only

134 UNCTAD/TDR/2018, “Trade and Development Report 2018: Power, Platforms, and the Free Trade Delusion,” UNCTAD, 2018, accessed 28 June 2019, https://unctad.org/en/PublicationsLibrary/tdr2018_en.pdf.135 Ibid.136 “Tariff rate, applied, weighted mean, all products (%),” The World Bank, accessed 27 July 2019, https://data.worldbank.org/indicator/TM.TAX.MRCH.WM.AR.ZS.137 Ibid.138 Ibid.139 Bryan Riley and Patrick Tyrell, “2018 Index of Economic Freedom: Freedom to Trade Is a Key to Prosperity,” The Heritage Foundation, last modified 21 November 2017, https://www.heritage.org/sites/default/files/2017-11/BG3266.pdf.140 Donald Boudreaux and Hane Crevelari, “Brazil’s Trade War Is a Warning to America,” The National Interest, last modified 19 March

using tariff rates to measure countries’ favorability of protec-tionist policies would be a mistake, since high tariffs may be overvalued in developing states, like some of those previously named, compared to more developed countries. For this rea-son, it is important that other factors, like WTO disputes or a willingness to participate in regional or international trade, be considered in the determination of which countries subscribe to highly protectionist ideologies.138

Brazil is one state that has earned the reputation of being highly protectionist throughout its history of participation in international trade. Most recently, from the Heritage Founda-tion’s 2018 report on Trade Freedom, Brazil tied with Leso-tho for a rank of number 141, placing it in a classification of states that have the most restrictions to free trade.139 Similarly, in the 2019 Index of Economic Freedom, Brazil is ranked at number 150 out of 180 countries and has been classified as “mostly unfree.”140 Its average applied tariff rate is approxi-mately 8.59%, which is notably high compared to the global

This image depicts all global customs unions as of 5 October 2019

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average of 2.59%.141 In specific industries, the Brazilian gov-ernment has imposed extreme protectionist measures in an attempt to protect domestic producers, as agricultural and in-dustrial tariff rates fall at approximately 55% and 35%, respec-tively.142 Through these tariffs and other quotas, the Brazilian economy has become extremely closed to global producers, and the Brazilian population suffers from the effects of such steep trade barriers through decreased labor productivity, high prices, and unstable employment.143

China may also be viewed as having increasingly protection-ist views and policies, due to both its national economic and political attitudes toward trade, as well as its involvement in the ongoing trade war with the United States. In the 2019 In-dex of Economic Freedom, China ranks at number 100, earn-ing a classification of “mostly unfree.”144 The primary reason for such a low score is the lack of transparency involved in business ownership and trade processes, since most economic activity is controlled by the state and individuals do not have the opportunity to participate in global trade freely.145 Increas-ing tensions with the United States also place improvements that China has made in the areas of labor freedom and judi-cial effectiveness in jeopardy as a result of political discourse and retaliatory measures.146 Although rising tensions between the two states may suggest that the US should be similarly grouped with China in the bloc of highly protectionist coun-tries, the US has historically been more open to bilateral and multilateral trade agreements and has fewer state-imposed regulations of the national economy and trade market; for these reasons, the US is not traditionally classified as a highly

2019, https://nationalinterest.org/feature/brazils-trade-war-warning-america-48137.141 Ibid.142 Ibid.143 Ibid.144 “China – 2019 Index of Economic Freedom,” The Heritage Foundation, last modified 2019, https://www.heritage.org/index/country/china.145 Ibid.146 Ibid.147 “United States – 2019 Index of Economic Freedom,” The Heritage Foundation, last modified 2019, https://www.heritage.org/index/country/unitedstates.148 “The Near Future: Tensions are Rising,” Global Trends – Office of the United States Director of National Intelligence, accessed 21 July 2019, https://www.dni.gov/index.php/global-trends/near-future.; Szu Ping Chan, “Why India is one of world’s most protectionist countries,” BBC, last modified 11 April 2019, https://www.bbc.com/news/business-47857583.149 Ibid.150 Ibid.151 “India – 2019 Index of Economic Freedom,” The Heritage Foundation, last modified 2019, https://www.heritage.org/index/country/india.152 “The Near Future: Tensions are Rising,” Global Trends – Office of the United States Director of National Intelligence, accessed 21 July 2019, https://www.dni.gov/index.php/global-trends/near-future.153 UNCTAD/TDR/2018, “Trade and Development Report 2018: Power, Platforms, and the Free Trade Delusion,” UNCTAD, 2018, ac-

protectionist country.147

India represents one of the strongest and fastest growing economies in Southeast Asia, but its policies have historically aimed at protecting domestic markets and producers at the ex-pense of participating in international trade.148 Although India highly favors foreign investment, it traditionally institutes high tariffs that limit market accessibility for foreign producers.149 This not only has negative effects on companies and coun-tries wishing to engage in trade with India, but may also limit innovation by domestic producers and reduce the access of Indian consumers to a wider variety of goods and services.150 To quantifiably measure the country’s general protectionism, India ranks at number 129 on the 2019 Index of Economic Freedom, and experts suggest that in order to improve that score and to better engage with the global economy, India must work to continue improving its rule of law and increase market access for both domestic and foreign parties.151

Although Brazil, China, and India are not the only countries that may regularly implement highly protectionist policies in-cluding, but also in addition to, tariffs on certain goods or industries, they are strong representatives of consistency in protectionist measures.152 For this reason, their actions and existing policies may be used as a guide when considering the future measures implemented by increasingly protection-ist countries. In discussion of the effects of protectionism, members of this bloc would prioritize their interests in main-taining the strength and prowess of domestic producers or companies over foreign competitors.153 Highly protectionist

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countries also place substantial value on their ability to regu-late their respective national economies and would not sup-port solutions that would place limitations on their regulatory powers, such as the formation of multilateral economic coali-tions or trade agreements that include compulsory clauses.154

Moderately Protectionist Countries

In general, moderately protectionist countries do not regularly implement protectionist measures, but instead balance their participation in free and global trade with their support for domestic producers and suppliers.155 Members of this bloc may be party to regional economic coalitions or trade agree-ments, which help to facilitate regional and international trade, while also giving individual states the opportunity to adjust their national economic policies under certain circumstances. Other members of this bloc may generally subscribe to an economic ideology that support free trade, but identify spe-cific industries that it seeks to protect from significant inter-national competition.156

Contrary to the situations observed in Brazil, China, and In-dia, the United States is considered to be open to free trade, with comparatively few economic or political restrictions on participation in global trade activities.157 Statistically speaking, the United States strongly favors free trade policies and open participation in national, regional, and global markets; how-ever, due to recent political rhetoric and the ongoing, well-publicized trade war with China, the United States may serve as an example of a developed country that is adopting increas-ingly protectionist policies and motivations, thereby placing

cessed 28 June 2019, https://unctad.org/en/PublicationsLibrary/tdr2018_en.pdf.154 Ibid.155 Ibid.156 Ibid.157 “United States – 2019 Index of Economic Freedom,” The Heritage Foundation, last modified 2019, https://www.heritage.org/index/country/unitedstates.158 Dan Burns and Jonas Ekblom, “Timeline: Key dates in the U.S.-China trade war,” Reuters, last modified 1 August 2019, https://www.reuters.com/article/us-usa-trade-china-timeline/timeline-key-dates-in-the-u-s-china-trade-war-idUSKCN1UR5RW.159 UNCTAD/TDR/2018, “Trade and Development Report 2018: Power, Platforms, and the Free Trade Delusion.”160 “United States – 2019 Index of Economic Freedom,” The Heritage Foundation, last modified 2019, https://www.heritage.org/index/country/unitedstates.161 “2019 Index of Economic Freedom,” The Heritage Foundation, last modified 2019, https://www.heritage.org/index/.162 Ibid.163 “Chronological list of disputes cases,” World Trade Organization, accessed 21 July 2019, https://www.wto.org/english/tratop_e/dispu_e/dispu_status_e.htm.164 “Protectionism in Indonesia: Falling Role of Commodities in the Economy,” Indonesia Investments, last modified 29 March 2017, https://www.indonesia-investments.com/business/business-columns/protectionism-in-indonesia-falling-role-of-commodities-in-the-economy/item7708; “2019 Index of Economic Freedom,” The Heritage Foundation, last modified 2019, https://www.heritage.org/index/.

sustained economic growth in danger.158 In reality, the United States uses protectionist measures in a strategic, mostly sector-specific manner that often focuses heavily on goods in the agricultural and technology industries.159 Even so, the US is not as highly protectionist as some other states, but its recent positions on issue of the international economy and global trade have come to represent its perceived, regressing willing-ness to participate in free and global trade.160 For these rea-sons, it is fair to classify the United States as a moderately, and selectively, protectionist country.

Several member states of the European Union may be clas-sified as moderately protectionist due to their participation in a regional economic coalition that facilitates trade agreements both within and outside of the EU.161 In general, the EU pos-sesses an open view of global trade and ranks highly on indi-cators published by the Heritage Foundation, demonstrating a willingness and ability for their populations to participate in international trade.162 Under specific circumstances, however, the EU has been known to file disputes with the WTO or be a respondent in WTO disputes, thereby showing that there are occasional disagreements between EU economic policies and free trade.163

Indonesia is one example of a state that has not been strongly impacted by regional economic policies or coalitions, but in-stead suffered economically through political transitions and declining commodity prices.164 The 2019 presidential election in Indonesia placed pressure on the national economy and economic policies, which resulted in increasing, but likely

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temporary, protectionist measures.165 Current opportunities to recover from economic decline due to political instability include the development of manufacturing and infrastruc-ture-related industries, which may create additional means of retracting protectionist measures in order to more readily par-ticipate in global trade.166

Whereas highly protectionist countries typically implement protectionist measures on their trade and economic policies without differentiation, many moderately protectionist coun-tries adopt protectionist trade policies within individual sec-tors.167 Global trade sectors that may often fall subject to pro-tectionist measures include agricultural products, technology, and minerals, metals, or other commodities.168 Looking to the EU as an example, its most notorious protectionist measure in the agricultural sector was its regulation of hormone treat-ment in imported meats like beef.169 The implementation of this particular policy, which was intended to raise the stan-dards for cattle raising and meat production in the interests of European consumers’ health and wellbeing, resulted in several countries filing disputes against the EU through the WTO, including Canada and the United States.170

Moderately protectionist countries would most likely be eager to strike a balance between national regulation, particularly with an industry- or sector-specific focus, and international collaboration through trade.171 Most members of this bloc would be cautious of any efforts to push forward total free trade, but would instead favor continued multilateral nego-tiations in order to build economic and political partnerships and grow the international economy.172

165 Ibid.166 Ibid.167 UNCTAD/TDR/2018, “Trade and Development Report 2018: Power, Platforms, and the Free Trade Delusion.”168 Ibid.169 Renée Johnson, “The U.S.-EU beef hormone dispute,” Congressional Research Service, last modified 14 January 2015, https://fas.org/sgp/crs/row/R40449.pdf.170 Tom Miles, “EU and Canada settle cattle battle at the WTO,” Reuters, last modified 3 October 2017, https://www.reuters.com/article/us-canada-eu-wto-meat/eu-and-canada-settle-cattle-battle-at-the-wto-idUSKCN1C81HY.171 “The Near Future: Tensions are Rising,” Global Trends – Office of the United States Director of National Intelligence, accessed 21 July 2019, https://www.dni.gov/index.php/global-trends/near-future.; UNCTAD/TDR/2018, “Trade and Development Report 2018: Power, Plat-forms, and the Free Trade Delusion.”172 Ibid.173 UNCTAD/TDR/2018, “Trade and Development Report 2018: Power, Platforms, and the Free Trade Delusion.”174 Ibid.175 Ibid.176 Ibid.177 Ibid.178 Harry G. Broadman, “Africa, The Continent Of Economic Misperceptions,” Forbes, last modified 13 March 2018, https://www.forbes.com/sites/harrybroadman/2016/03/31/africa-the-continent-of-economic-misperceptions/#26dece566c54.

Minimally Protectionist Countries

Countries that may be classified as minimally protectionist are typically those who seek to participate in global trade to a high extent in order to increase their economic prosperity and stimulate national growth.173 In the recent global eco-nomic climate, which largely supports free and open trade, most states would be classified as taking a public position of being minimally protectionist in discourse and motivation.174 The majority of developing states seek foreign investment and participation in the global market and, therefore, do not actively seek a restriction of international economic activity that would otherwise grow their national economy.175 Other factors, however, may limit these states’ abilities to participate in global trade, including political turmoil and a lack of eco-nomic or political transparency.176 In such cases, even when developing states may not take strong protectionist measures, their full participation in international trade is severely limit-ed.177

It is useful to consider some of the ways in which minimally protectionist countries may implement various protectionist measures in order to achieve specific goals or protect the in-terests and profits of individual sectors. Although these are not observed with the same frequency as they appear in highly or moderately protectionist countries, members of this bloc do still take action to regulate the economic activities of their states.178 For example, African countries, alongside small is-land developing states (SIDS) and some Asian countries, are perceived by many as being the most open to foreign invest-

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ment, global economic collaboration, and free trade.179 It is true that many of those states traditionally belong to the minimally protectionist bloc; however, nuances that can be observed in individual states’ economic policies reflect eco-nomic and developmental disparities across the African con-tinent and show that, although the continent is largely open to trade and investment, this openness and political positions vary by country.180 Much of this variation is derived from dif-ferences in the resources available to individual countries, governments, and entrepreneurs that are guiding the devel-opment of industry and production of goods and services across the African continent.181 In particular, South Africa is one of Africa’s two largest sub-Saharan economies and often acts as the favored point of entry for investors seeking access to the continent.182 Although it has benefited from compara-tively better economic development than other African states, the South African government continues to heavily regulate foreign investment and trade policies that impact both South African industries and foreign producers.183 In this case, bu-reaucratic circumstances are the most significant driver of protectionism, and the status of national governments within Africa, as well as their prioritization of specific and varied in-dustries, has a notable impact on the continents’ engagement with global trade, either through protectionist measures or free trade motivations.184

While it is true that developing countries, especially LDCs and states within Africa, are frequently classified as minimally protectionist, there are also several developed countries that traditionally adhere to free trade policies and forgo the use of protectionist measures to regulate trade activity.185 Examples of minimally protectionist developed states include Australia, 179 Ibid.180 Ibid.181 Ibid; UNCTAD/TDR/2018, “Trade and Development Report 2018: Power, Platforms, and the Free Trade Delusion.”182 Harry G. Broadman, “Africa, The Continent Of Economic Misperceptions,” Forbes, last modified 13 March 2018, https://www.forbes.com/sites/harrybroadman/2016/03/31/africa-the-continent-of-economic-misperceptions/#26dece566c54.183 Ibid.184 Ibid.185 “2019 Index of Economic Freedom,” The Heritage Foundation, last modified 2019, https://www.heritage.org/index/.186 Ibid.187 Ibid.188 UNCTAD/TDR/2018, “Trade and Development Report 2018: Power, Platforms, and the Free Trade Delusion.”189 Ibid.190 Ibid.191 “About UNCTAD,” UNCTAD, accessed 5 July 2019, https://unctad.org/en/Pages/aboutus.aspx.192 Ibid.193 Ibid; TD/519/Add.2, “Nairobi Maafikiano; From decision to action: Moving towards an inclusive and equitable global economic en-vironment for trade and development,” 5 September 2016, accessed 27 July 2019, https://unctad.org/meetings/en/SessionalDocuments/

New Zealand, Singapore, and Switzerland.186 Each of these countries support a free national economy with open markets and significant accessibility to sustain their substantial involve-ment in international trade through both production and con-sumption.187

Regardless of development status, countries within the mini-mally protectionist bloc are likely to be the most fervent sup-porters of free trade policies, multilateral negotiations, and highly accessible markets.188 This bloc would cautiously con-sider the necessary balance between national and international support for domestic and global industries, as they understand that the two are reliant upon each other for sustained growth, but could easily be compromised due to their often conflict-ing interests.189 Members of this bloc should also consider the effects of NTMs and the longevity and sustainability of free or open trade policies.190

Committee Mission

In considering the far-reaching impact of protectionist mea-sures on international trade and the global economy, it is crucial to note that in most cases, UNCTAD works for the benefit of the international community, rather than the sole benefit of individual states, by taking steps to strengthen the global economy.191 In order to best support the global econ-omy, UNCTAD assumes a position favoring and emphasiz-ing the need for free trade.192 Although UNCTAD’s individual member states may take varied positions in their use and sup-port of protectionist or free trade policies, it is the mission of this body to promote multilateral and free trade activities worldwide.193

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A second motivation that distinguishes UNCTAD is its focus on developing economies, especially those within LDCs.194 Al-though UNCTAD shares many similarities with, and strongly supports, the activities of the WTO, the two bodies differ in that the WTO generally gives more attention to more devel-oped countries that typically have a more secure means of negotiating trade agreements and filing trade disputes.195 It is important to keep the differences between UNCTAD and the WTO in mind when developing responses to the issue of in-creasing protectionism, since their focus on specific countries or states of development shapes the actions that they take to address individual countries and the global community. His-torically, UNCTAD’s work has manifested through research and data collection, and this methodology should serve as a guide, but not a restriction of the means that UNCTAD may use now and in the future to increase market access, stimulate international economic prosperity while decreasing economic disparities between states, and promoting free trade policies worldwide.196

td519add2_en.pdf.194 Ibid.195 Ibid.196 Ibid.

48|UNCTADreseArCh AND PrePArATioN QUesTioNs

Research and Preparation Questions

Your dais has prepared the following research and preparation questions as a means of providing guidance for your research process. Delegates are NOT obligated to formally answer these questions either in committee or in position papers. Rather, these questions should be carefully considered, as they embody some of the main critical thought and learning objectives surrounding your topic.

Topic A

1. Has your country historically been associated with capital flight? If so, how has it benefited or suffered from the effects of capital flight, and how might that shape your country’s perspective in policymaking related to this issue?

2. How does your country position itself with regards to capital controls? How has your country responded to any recent rapid devaluation or inflation of currency? What taxes and tariffs has your country chosen to implement?

3. Does your country send economic or humanitarian aid to African states; or, if your country is an African nation, does it receive economic or humanitarian aid from other countries? If so, how does this dispensation or receipt of aid impact your country’s national policies, international relations, or other economic and political activities? If you send economic aid to African states, is it in the form of loans or grants? Are there any strings attached to how this economic aid may be used?

4. How does your country generally respond to corruption? Does your country have a history of experiencing corrup-tion? If so, how has that corruption been addressed nationally or internationally, if at all? Has your country been involved in addressing the possible corruption of another state, or corruption on an international scale? If so, what was the nature of your country’s involvement? How might your country’s history or perspective relative to corruption impact its position in discussion of corruption as a contributing force to capital flight?

5. What is your country’s history with colonization? For African countries, to what extent did the slave trade play a part in your history and how does that continue to affect your economy today? How has a colonial history impacted the growth of a fully developed legal system and government structure in your country? For former colonial powers, how has your history of control enabled you to benefit from capital flight?

Topic B

1. What degree of protectionism does your country typically implement through formal or informal policymaking, par-ticularly related to economic and political issues? How is that level of protectionism traditionally displayed within your country’s policies, governance, or international relations?

2. How significant a role does your country play in regional and global trade? What percentage of your national economy or budget is dependent upon activities directly tied to trade with other countries? With regard to your country’s primary exports and imports, how does your country fit into the global supply chain for those goods and services? Which indus-tries or economic sectors are most important or valuable to your country? Which trade alliances or coalitions are most important to your country on a regional level and a global level, and why are these important?

3. What role does your country typically play in trade agreements and negotiations? Which states are your country’s most frequent trading partners? Which specific goods and services are commonly exchanged through those trade relation-

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ships? Which trade agreements is your country party to (bilateral and multilateral), and how does its membership in those agreements impact your country’s political and economic relationships with other states? What has been your country’s stance in WTO trade-negotiation rounds and, in particular, the Doha Round? How often has your country created bilateral free trade agreements (FTAs)?

4. What, if anything, has your country done to foster positive economic relations with least developed countries (LDCs) or, in the case of LDCs, to construct multilateral economic relationships? In regard to future trade agreements and ne-gotiations, how could your country contribute to the development and improvement of market accessibility for LDCs? Which factors most substantially prevent your country from contributing to development and accessing the global market at its full potential?

5. How does your country view current trade disputes, including, but not limited to, trade tensions between China and the United States and official trade disputes filed with the WTO? To what extent is your country involved in any ongoing trade disputes, either formally or informally, on a regional or global level?

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Important Documents

Topic A

ACHPR/Res.236. “Resolution on Illicit Capital Flight from Africa.” 23 April 2013. Accessed 28 June 2019, http://www.achpr.org/sessions/53rd/resolutions/236/.

This ACHPR resolution details a plan set out by African countries at an international scale in order to start doing research and acting against capital flight. This resolution is especially important because it is one of the biggest statements from a UN body on capital flight. Furthermore, this is the first action against capital flight by a large body of African states.

Boyce, James K., and Léonce Ndikumana. “Strategies for Addressing Capital Flight.” Capital Flight from Africa: Causes, Effects, and Policy Issues (Oxford: 2014) 393-417. doi:10.1093/acprof:oso/9780198718550.003.0016.

These authors delve into the issue of capital flight as a systematic problem. They also elaborate on the role that international and national institutions play in capital flight and also lay out potential solutions to all sides of the problem, thus promoting the need for holistic solutions as well as providing the logistics behind them.

“Capital Flight from Africa.” United Nations Economic Commission for Africa. 7 April 2014. Accessed 26 June 2019, https://www.uneca.org/stories/capital-flight-africa.

This source provides an overarching background on capital flight in Africa and explains how and why the issue is more prominent there than other regions of the world and highlights efforts that will need to be made to reduce capital flight. This information, from the UN itself, is an essential over-view to capital flight.

Frankema, Ewout. “How Africa’s Colonial History Affects Its Development.” World Economic Forum. 15 July 2015. Accessed 27 June 2019. https://www.weforum.org/agenda/2015/07/how-africas-colonial-history-affects-its-development/.

This source provides an essential overview of the history of the African continent and how that history affects the current state of economics. Since to-day’s African economy is the largest player and victim of international capital flight, it is imperative that delegates understand how the economy got there.

Ndikumana, Léonce and James K. Boyce. Africa’s Odious Debts: How Foreign Loans and Capital Flight Bled a Continent, (Zed Books: 2011). Accessed 26 June 2019, ProQuest.

This book introduces the crucial idea to African capital flight discussions that Africa was a net contributor and not a net benefactor based on humani-tarian aid. This argument is original and brings up unique solutions to both African debt and capital flight.

“New Project to Measure Illicit Financial Flows in Africa.” United Nations Conference on Trade and Development. 16 March 2018. Accessed 26 June 2019. https://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=1688.

This source explains UNCTAD’s partnership with the UN Economic Commission for Africa (UNECA) and the UN Office on Drugs and Crime (UNODC) and their current efforts to measure and reduce capital flight from Africa and establishes the precedent for UNCTAD to address this issue. It is important that delegates understand why UNCTAD is addressing this issue and what UNCTAD’s mandate enables it to do regarding capital flight.

Topic B

Fouda, Regine A. N. “Protectionism and Free Trade: A Country’s Glory or Doom?” International Journal of Trade, Economics and

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Finance 5, Vol. 3 (October 2012). Accessed 27 June 2019. https://pdfs.semanticscholar.org/6d2a/14b98280f98e67f129c8dce66081614c7f64.pdf.

This article notes the implications of protectionist policies adopted by individual states on global trade dynamics and economic prosperity. It also uses data-based analysis to evaluate the trade of specific goods through case studies in order to demonstrate the varied effects of free trade policies and pro-tectionist measures on revenue and market accessibility.

Guarino, Arthur S. “The Economic Effects of Trade Protectionism.” Focus Economics. Last modified 1 March 2018. https://www.focus-economics.com/blog/effects-of-trade-protectionism-on-economy.

This article provides a more in-depth explanation of protectionism in practice and its effects on global and national economies. By detailing the purpose and practical effects of protectionist measures and individual policies, the article facilitates a better understanding of NTMs and other unorthodox methods for regulating trade activity.

“Key Statistics and Trends in Trade Policy - 2018.” United Nations Conference on Trade and Development. Last modified 2019. https://unctad.org/en/PublicationsLibrary/ditctab2019d1_en.pdf.

This source represents UNCTAD’s annual report on the status of global trade and pays particular attention to any viable threats – one of the primary threats being tensions between the United States and China and potential spillover effects. It also enumerates on the major issues for development and sustainability concerning trade by paying particular attention to LDCs and other critical developing countries.

Riley, Bryan and Tyrell, Patrick. “2018 Index of Economic Freedom: Freedom to Trade Is a Key to Prosperity.” The Heritage Foundation. Last modified 21 November 2017. https://www.heritage.org/sites/default/files/2017-11/BG3266.pdf.

By using a metric analysis of how political and social factors impact the economic state of a country, the Heritage Foundation’s annual index of economic freedom is a useful tool for understanding and comparing country policies regarding protectionism and global economic collaboration. It also explains, on a country-by-country basis, how the internal policies and governmental activities formulate the overall economic freedom rating.

TD/519/Add.2. “Nairobi Maafikiano; From decision to action: Moving towards an inclusive and equitable global economic environment for trade and development.” 5 September 2016. Accessed 27 July 2019. https://unctad.org/meetings/en/SessionalDocuments/td519add2_en.pdf.

As the resultant document from the fourteenth session of UNCTAD in July 2016, this document provides additional guidance for the operations and involvement of UNCTAD as a UN agency and global institution. It also outlines UNCTAD’s priorities in communicating and collaborating with international organizations focused on trade, especially the World Trade Organization.

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Works Cited

Committee History

“Group of 77 (G-77).” Britannica Academic. Accessed 22 September 2019. https://academic-eb-com.acces-distant.sciencespo.fr/levels/collegiate/article/Group-of-77/438728.

This article contextualizes the formation of the Group of 77 and defines the alliance through an explanation of its international political activities. Although most of the focus is placed on the historical foundation of the G-77, this source also makes note of the contemporary meetings and activities of the alliance.

“History.” UNCTAD. Accessed 22 September 2019. https://unctad.org/en/Pages/About UNCTAD/A-Brief-History-of-UNCTAD.aspx.

By providing a chronological record of UNCTAD’s formation, in conjunction with the description of the Group of 77, this source establishes a basis of understanding for the literal organization of UNCTAD, as well as its intended function.

“History of the 0.7 ODA target.” DAC Journal 3, No. 4 (2002): 9-11. Last modified March 2016. Accessed 22 September 2019. http://www.oecd.org/dac/stats/ODA-history-of-the-0-7-target.pdf.

This is an academic journal article that explains the motivations and progress regarding the threshold of 0.7% of GDP to be donated as aid.

Karshenas, Massoud. “Power, Ideology and Global Development: On the Origins, Evolution and Achievements of UNCTAD.” Development & Change 47, no. 4 (July 2016): 664–85. doi:10.1111/dech.12239.

Through a consideration of economic theory and standards for international dialogue and policy-making, the author evaluates the role of UNCTAD in influencing international economics, regional and national financial structures, and global development.

“Main legal provisions.” WTO. Accessed 22 September 2019. https://www.wto.org/english/tratop_e/devel_e/d2legl_e.htmThis source highlights the main legal provisions that give special rights to developing countries in all WTO Agreements. Besides their overall importance for UNCTAD, of particular highlight is the Generalized System of Preferences provision.

“Mandate and Key Functions.” UNCTAD. Accessed 22 September 2019. https://unctad.org/en/Pages/DITC/Competition-Law/ccpb-Mandate.aspx.

This source lays out UNCTAD’s mandates and missions, which can be used to direct the committee’s authority on the topic.

Nun, Bernardo P. “UNCTAD.” Lawyer of the Americas 4, no. 3 (1972): 449-59. http://www-jstor-org.acces-distant.sciencespo.fr/stable/40175626.

Although more dated that some of the other resources included in this list, Nun’s article offers an important temporal analysis of UNCTAD, as well as of its categorical member states. Published within the first decade of UNCTAD’s operation as an agency of the UN, the source outlines the perceived role of UNCTAD and the opportunities available for its engagement with the global economy.

“Preferential Market Access and the Generalized System of Preferences.” UNCTAD. Accessed 22 September 2019. https://unctad.org/en/Pages/DITC/GSP/Generalized-System-of-Preferences.aspx.

This source, part of UNCTAD’s website, explains the Generalized System of Preferences and what UNCTAD’s role was in its conception. Ad-ditionally, it also contains an electronic library of all official UNCTAD documents related to the Generalized System of Preferences published since

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1999, and an archive of all relevant news on the matter and UNCTAD’s involvement.

“Principles of the trading system.” World Trade Organization. Accessed 29 September 2019. https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm.

The global trade policies outlined by the WTO on this informational page are tied together chronologically, as they represent the gradual development of free trade standards, beginning with the treatment of trading partners under the most-favored-nation principle.

TD/97/Vol.1. “Proceedings of the United Nations Conference on Trade and Development.” UNCTAD. October 1968. Ac-cessed 22 September 2019. https://unctad.org/en/Docs/td97vol1_en.pdf.

This is the compilation of all proceedings, reports and annexes of the second UNCTAD conference, held in New Delhi in 1968. It is a robust docu-ment worthy of reference in this circumstance for its mentions of the Generalized System of Preferences, and brief discussions on the 0.7 ODA target, and how both topics fit into the scope of the conference as a whole.

Toye, John. UNCTAD at 50: A short history. Switzerland: United Nations, 2014. Accessed 22 September 2019. https://unctad.org/en/PublicationsLibrary/osg2014d1_en.pdf.

This source is a book by Oxford professor John Toye, a political scientist with several appointments and consulting experience in international institu-tions. It was commissioned by UNCTAD for its 50th birthday in 2014, but its perspective is Toye’s uniquely, allowing a glimpse at what certain pundits consider UNCTAD’s successes, failures, and positioning for the future.

Topic A

UN Sources

ACHPR/Res.236. “Resolution on Illicit Capital Flight from Africa.” 23 April 2013. Accessed 28 June 2019, http://www.achpr.org/sessions/53rd/resolutions/236/.

This ACHPR resolution details a plan set out by African countries at an international scale in order to start doing research and acting against capital flight.

“Capital Flight from Africa.” United Nations Economic Commission for Africa. 7 April 2014. Accessed 26 June 2019, https://www.uneca.org/stories/capital-flight-africa.

This source provides an overarching background on capital flight in Africa and explains how and why the issue is more prominent there than other regions of the world and highlights efforts that will need to be made to reduce capital flight.

Idowu-Ojo Abiola and Marie Saine. “Press release on the Joint Special Mechanisms Meeting between the Working Group on Extractive Industries, Environment and Human Rights in Africa and the Working Group on Economic, Social and Cul-tural Rights, Banjul, The Gambia,” African Commission on Human and Peoples’ Rights,. 12 February 2019. Accessed 16 July 2019. http://www.achpr.org/press/2019/02/d444/

This press update provides an update on ACPHR Resolution 236, and though there is not much to report, it is important to be aware of the most recent information.

“Mandate and Key Functions.” UNCTAD. Accessed 27 June 2019. https://unctad.org/en/Pages/DITC/CompetitionLaw/ccpb-Mandate.aspx.

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This source lays out UNCTAD’s mandates and missions, which can be used to direct the committee’s authority on the topic.

“Mandate and Mission.” UNCTAD. Accessed 27 June 2019. https://unctad.org/en/pages/gds/Economic Cooperation and Integration among Developing Countries/Mandate-and-Mission.aspx.

This source goes into further detail of UNCTAD’s mandate, especially with regards to LDCs and South-South cooperation.

“New Project to Measure Illicit Financial Flows in Africa.” United Nations Conference on Trade and Development. 16 March 2018. Accessed 26 June 2019. https://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=1688

This source goes into further detail of UNCTAD’s project to measure illegal capital flows in Africa.

“Sustainable Development Goal 16” Sustainable Development Goals Knowledge Platform. Accessed 27 June 2019. https://sustain-abledevelopment.un.org/sdg16.

This source thoroughly explains SDG 16, target 16.4 of which specifically references illicit flows.

“Sustainable Development Goal 8” Sustainable Development Goals Knowledge Platform. Accessed 27 June 2019. https://sustain-abledevelopment.un.org/sdg8.

This site details the targets and goals of SDG 8, which relates to sustainable economic growth and development.

Non-UN Sources

“Argentina’s Capital Flight: Will History Be Repeated?” Knowledge@Wharton. 29 September 2011. Accessed 27 June 2019. This article provides another example of capital flight in the current economy, this time in Argentina, an MDC.

Akira Ariyoshi, Andrei Kirilenko, Inci Ötker, Bernard Laurens, Jorge Canales Kriljenko, and Karl Habermeier. “Capital Controls; Country Experiences with Their Use and Liberalization.” IDEAS Working Paper Series from RePEc (2000) https://www.imf.org/external/pubs/ft/op/op190/pdf/part1.pdf.

This paper provides an in-depth analysis of the structure and implementation status of capital controls across different countries worldwide.

Asongu, Simplice A. “Fighting African Capital Flight: Empirics on Benchmarking Policy Harmonization.” The European Journal of Comparative Economics 11, no. 1 (2014): 93-122. Accessed 27 June 2019. EBSCO.

This source analyzes links between countries suffering from capital flight and offers perspective on the causes and potential policy solutions.

Booth, Alex. “How Can Africa Solve Its Capital Flight Problem?” The Africa Report. 22 March 2019. Accessed 26 June 2019. https://www.theafricareport.com/10439/how-can-africa-solve-its-capital-flight-problem/.

This source analyzes the causes of capital flight and current measures and lack thereof being taken by African countries against capital flight. This source also proposes further solutions and culprits, both in Africa and globally.

Boyce, James K., and Léonce Ndikumana. “Strategies for Addressing Capital Flight.” Capital Flight from Africa: Causes, Effects, and Policy Issues (Oxford: 2014) 393-417. doi:10.1093/acprof:oso/9780198718550.003.0016.

These authors elaborate on the role that international and national institutions play in capital flight and also lay out potential solutions to all sides of the problem.

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Coppola, Frances. “How Capital and Exchange Controls Affect International Trade.” American Express. Accessed 17 August 2019. https://www.americanexpress.com/us/foreign-exchange/articles/capital-controls-in-developing-economies-af-fect-international-trade/.

This article explains what capital controls are, provides examples, and elaborates on how they can be both detrimental and beneficial to a country’s economy.

“Debates over Exchange Rates: Overview and Issues for Congress.” EveryCRSReport.com. Last modified 22 June 2018. Accessed 17 August 2019. https://www.everycrsreport.com/reports/R43242.html.

This report has a valuable explanation about exchange rates as well as a map detailing which countries use each type of exchange rate.

“Democracy Index 2018.” The Economist Intelligence Unit. 2018. https://www.eiu.com/topic/democracy-index.The Democracy index is a measure of levels of democracy in countries across the world.

Epstein, Gerald A. Capital Flight and Capital Controls in Developing Countries. Northampton, MA: Edward Elgar, 2006). Accessed 26 June 2019. https://www.peri.umass.edu/fileadmin/pdf/chapter_1.pdf

This book provides a thorough and well-rounded set of case studies of capital flight from all over the world. Although South Africa is one case study, it is contrasted well with other developing countries’ relationship with capital flight.

Evans-Pritchard, Ambrose. “Debt Crisis: Greek Euro Exit Looms Closer as Banks Crumble.” The Telegraph, 16 May 2012. Accessed 27 June 2019. https://www.telegraph.co.uk/finance/financialcrisis/9270884/Debt-crisis-Greek-euro-exit-looms-closer-as-banks-crumble.html.

The Greek economic crisis was also influenced by capital flight and represents some of the dire consequences of capital flight.

Farquet, Christophe. “Capital Flight and Tax Competition after the First World War: The Political Economy of French Tax Cuts, 1922–1928.” Contemporary European History, no. 4 (2018) 537-61. Accessed 27 June 2019.

This source provides a thorough background on the history of capital flight in different economic contexts, which can allow delegates to draw parallels and comparisons.

“Foreign direct investment, net outflows (% of GDP).” The World Bank. Last modified 2018. Accessed 18 August 2019. https://data.worldbank.org/indicator/BM.KLT.DINV.WD.GD.ZS?most_recent_value_desc=true.

This info sheet from the World Bank provides multiple graphs, timelines, and statistics about foreign direct investment on an international scale.

Frankema, Ewout. “How Africa’s Colonial History Affects Its Development.” World Economic Forum. 15 July 2015. Accessed 27 June 2019. https://www.weforum.org/agenda/2015/07/how-africas-colonial-history-affects-its-development/.

This source provides an essential overview of the history of the African continent and how that history affects the current state of economics.

“Ghana Anti-Money Laundering Act.” International Labour Organization. Accessed 27 June 2019. http://www.ilo.org/dyn/natlex/natlex4.detail?p_lang=en&p_isn=92293&p_country=GHA&p_count=115.

Ghana’s 2014 legislation against money laundering is a direct act against capital flight and establishes a financial intelligence center.

Greenwood, John and Steve H. Hanke. “How China Copes With Capital Flight.” The Wall Street Journal (20 November 2018).

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Accessed 27 June 2019. https://www.wsj.com/articles/how-china-copes-with-capital-flight-1542672901. This source provides an example of capital flight as a current issue outside of Africa and in China, which has quite different circumstances from many African LDCs.

Guarascio, Francesco. “EU shrinks tax haven blacklist, removes UK, Dutch territories.” Reuters. 17 May 2019. Accessed 25 July 2019. https://www.reuters.com/article/us-eu-tax-blacklist/eu-shrinks-tax-haven-blacklist-removes-uk-dutch-territo-ries-idUSKCN1SN12M.

This news report provides up-to-date information on EU action against tax havens and helps to provide a timeline of the EU’s blacklist.

Hebous, Shafik. “Money at the Docks of Tax Havens: A Guide.” (27 September 2011). Accessed 27 June 2019, https://ssrn.com/abstract=1934164.

This source analyzes the detriments and benefits of tax havens, which is useful to help determine policies. It also lists certain countries that are histori-cally known to be tax havens.

“Illicit Financial Flows to and from Developing Countries 2006 - 2015 (DOTS).” Global Financial Integrity. Accessed 27 June 2019. https://gfintegrity.org/data-by-country/.

This map provides a graphic of where illicit flows are happening in the world, which is information that will be useful to delegates when deciding how they want to form blocs.

“Investor’s List: Countries with Fixed Currency Exchange Rates.” Investment Frontier. Last modified 19 February 2013. Accessed 2 August 2019. https://www.investmentfrontier.com/2013/02/19/investors-list-countries-with-fixed-currency-ex-change-rates/.

This source provides a thorough explanation behind fixed exchange rates in addition to providing a detailed list of all the countries that use fixed rates, as of 2018.

Lee, Amanda. “EU Tax Haven Blacklist Triples to Include 15 Countries.” Euractiv.com. Last modified 19 March 2019. Accessed 27 June 2019. https://www.euractiv.com/section/economy-jobs/news/eu-tax-haven-blacklist-triples-to-include-15-countries/.

The EU’s drastic additions to this blacklist demonstrates a willingness to start handing out consequences to tax havens, which could translate to support for reforming institutions that enable capital flight.

Ma, Alexandra. “The 30 Most Authoritarian Regimes in the World.” Business Insider France. 4 February 2018. Accessed 9 September 2019. http://www.businessinsider.fr/us/economist-intelligence-unit-2017-democracy-index-worst-countries-2018-1

This source provides information on how to identify an authoritarian regime.

Majaski, Christina. “Fixed Exchange Rate,” Investopedia. Last modified 14 April 2019. Accessed 17 August 2019. https://www.investopedia.com/terms/f/fixedexchangerate.asp.

This article explains in detail how fixed exchange rates work and why countries might prefer them.

Miller, Cory. “Floating Exchange Rates,” Investopedia. Last modified 9 April 2019. Accessed 17 August 2019. https://www.in-vestopedia.com/terms/f/floatingexchangerate.asp.

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In contrast with the previous source, this article explains floating exchange rates.

McLeod, Darryl. “Capital Flight.” Concise Encyclopedia of Economics. Accessed 26 June 2019. https://www.econlib.org/library/Enc1/CapitalFlight.html.

This source provides a holistic definition of capital flight and a brief history of capital flight around the world and in different eras. Its overview ex-plains different kinds of capital flight and how they have presented themselves through history.

Moore, Molly. “Old Money, New Money Flee France and Its Wealth Tax.” The Washington Post. 16 July 2006. Accessed 28 June 2019. http://www.washingtonpost.com/wp-dyn/content/article/2006/07/15/AR2006071501010_2.html.

France’s loss of taxes through the emigration of its wealthiest citizens represents a type of capital flight not often discussed, but important to analyze.

Ndikumana, Léonce and James K. Boyce. Africa’s Odious Debts: How Foreign Loans and Capital Flight Bled a Continent, (Zed Books: 2011). Accessed 26 June 2019, ProQuest.

This book introduces the crucial idea to African capital flight discussions that Africa was a net contributor and not a net benefactor based on humani-tarian aid.

Ndikumana, Léonce. “Capital Flight From Africa: Is the World Genuinely Ready for Action?” Lecture, Old Chapel, Amherst. 9 April 2018.

This source thoroughly explains capital flight, how it is exacerbated by the growth of economies, and how countries in both Africa and the West must be responsible for the solutions.

Neely, Michelle Clark. “The Name Is Bond—Indexed Bond.” Federal Reserve Bank of St. Louis. Last modified 1 January 1997. Accessed 17 July 2019. https://www.stlouisfed.org/publications/regional-economist/january-1997/the-name-is-bondindexed-bond

This short article succinctly explains what an indexed bond is, which is a difficult concept to understand, but often proposed as a solution to African debt.

Nölling, Wilhelm. “Combating Capital Flight from Developing Countries.” Intereconomics 21, no. 3 (1986): 117-23. Accessed 27 June 2019. doi:10.1007/bf02925281.

Although this article focuses on Latin American capital flight, it proposes detailed methods for MDCs to help LDCs combat capital flight.

Nordin, Jennifer, and Raymond Baker. “How Dirty Money Binds the Poor.” Financial Times. 12 October 2008. Accessed 27 June 2019. https://www.ft.com/content/fe83a20a-1c7a-11d9-8d72-00000e2511c8.

This article provides a short analysis of how tax havens and loopholes harm the economies of LDCs.

Nunn, Nathan. “Slave Trade and African Underdevelopment.” VOX, CEPR Policy Portal. 08 December 2007. Accessed 27 June 27, 2019. https://voxeu.org/article/slave-trade-and-african-underdevelopment.

Slavery’s prevalence in African history is linked to the least developed African economies in this research paper, suggesting that there may be links between capital flight and a history of slave trade.

Peralta, Eyder. “Kenya’s Fight Against Corruption Includes Demolishing Buildings.” NPR. 2 January 2019. Accessed 27 June 2019. https://www.npr.org/2019/01/02/681565758/kenyas-fight-against-corruption-includes-demolishing-buildings.

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This news story highlights recent Kenyan anti-corruption campaigns that involve drastic measures and can provide context for governmental attitudes towards corruption and potential capital flight.

Stiglitz, Joseph E., and Hamid Rashid. “How Can Developing Countries Stop Their Capital Draining Away?” World Economic Forum. 19 February 2016. Accessed 27 June 2019. https://www.weforum.org/agenda/2016/02/how-can-developing-countries-stop-their-capital-draining-away/.

These authors propose conversion of national debt to some form of an indexed bond, as well as reducing federal reserves of other currencies.

Stoddard, Ed. “Should Africa Challenge Its “Odious Debts?” Reuters. 15 March 2012. Accessed 27 June 2019, https://af.reuters.com/article/angolaNews/idAFL5E8ED3JD20120315.

Stoppard discusses the relationship between the aid that Africa receives annually and its losses due to capital flight and analyzes assertions that Africa is a net contributor to the world economy.

“Taking the Pulse of Africa’s Economy.” World Bank. April 08, 2019. Accessed June 27, 2019. https://www.worldbank.org/en/region/afr/publication/taking-the-pulse-of-africas-economy.

This article from the World Bank reports that African economies are on an overall downturn, with external debt being a large contributor. An under-standing of how debt cripples African economies is essential, especially since it relates to the concept of odious debts.

Tejan-Cole, Abdul. “How Can Africa Stop Illicit Capital Flight?” World Economic Forum. 13 July 2015. Accessed 27 June 2019. https://www.weforum.org/agenda/2015/07/how-can-africa-stop-illicit-capital-flight/.

This article proposes numerous solutions to capital flight that African countries can take, as well as noting current legislation in Africa.

“Voluntary Assets and Income Declaration Scheme.” Mazars in Nigeria. Accessed 27 June 2019. https://www.mazars.com.ng/Home/News/Latest-News/Voluntary-Assets-and-Income-Declaration-Scheme.

This source announces the introduction of a new Nigerian policy that, if effective, will help to decrease capital flight.

Wilpert, Greg. “Unfair Global Tax System Makes Sustainable Development Impossible.” The Real News Network. 4 November 2018. Accessed 27 June 2019. https://therealnews.com/stories/unfair-global-tax-system-makes-sustainable-develop-ment-impossible.

This interview with Léonce Ndikumana offers an analysis of the global tax system and how it is a detriment to the development of the economies in LDCs, especially those in Africa.

Topic B

UN Sources

“About UNCTAD.” UNCTAD. Accessed 5 July 2019. https://unctad.org/en/Pages/aboutus.aspx.In order to understand UNCTAD’s areas of influence, this source provides useful information about how the Conference’s mandate and foundational ideology shapes its actions and initiatives.

DEV/3187. “As Developing Countries Strive to Enhance Economic Performance, Developed Partners Should Honour or Surpass Aid Pledges, Addis Conference Hears.” United Nations Economic and Social Council. 14 July 2015. Accessed 27 July

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2019. https://www.un.org/press/en/2015/dev3187.doc.htm.This report from the UN Economic and Social Council give insight concerning global financial aid pledges and packages, as well as the country policies of those states that chose to speak on the topic.

“Key Statistics and Trends in Trade Policy - 2018.” United Nations Conference on Trade and Development. Last modified 2019. https://unctad.org/en/PublicationsLibrary/ditctab2019d1_en.pdf.

This source represents UNCTAD’s annual report on the status of global trade and pays particular attention to any viable threats – one of the primary threats being tensions between the United States and China and potential spillover effects.

“Market Access, Rules of Origin and Geographical Indications for the Least Developed Countries.” UNCTAD. Accessed 28 August 2019. https://unctad.org/en/PublicationChapters/tc2015d1rev1_S02_P04.pdf.

Paying special attention to SDGs eight and ten, this project write-up demonstrates the extent to which UNCTAD is committed to improving market access worldwide. This is realized through collaboration with LDCs and other states that are members of the WTO in order to establish preferential rules of origin for LDC exports.

“Project tackles non-tariff barriers in Africa.” UNCTAD. Last modified 21 March 2019. https://unctad.org/en/pages/newsde-tails.aspx?OriginalVersionID=2022.

Projects like that which is described in this article may prove to be useful in monitoring the use of non-tariff trade barriers and mitigating their effects.

“Subsidiary Organs of the United Nations Security Council.” United Nations Security Council. Last modified 8 February 2019. https://www.un.org/securitycouncil/sites/www.un.org.securitycouncil/files/subsidiary_organs_factsheets.pdf.

By explaining the roles of subsidiary organs of the UN Security Council, this report provides information about how the Security Council operates and achieves its goals.

“Tariff rate, applied, weighted mean, all products (%).” The World Bank. Accessed 27 July 2019. https://data.worldbank.org/indicator/TM.TAX.MRCH.WM.AR.ZS.

The data provided from this source facilitates a contextualization of tariff-related concerns and allows for a fairer comparison of protectionist measures applied by individual countries.

TD/519/Add.2. “Nairobi Maafikiano; From decision to action: Moving towards an inclusive and equitable global economic environment for trade and development.” 5 September 2016. Accessed 27 July 2019. https://unctad.org/meetings/en/SessionalDocuments/td519add2_en.pdf.

As the resultant document from the fourteenth session of UNCTAD in July 2016, this document provides additional guidance for the operations and involvement of UNCTAD as a UN agency and global institution.

“The Unseen Impact of Non-Tariff Measures: Insights from a new database.” UNCTAD. Last modified 2017. https://unctad.org/meetings/en/SessionalDocuments/ditc-tab-MC11-UNCTAD-NTMs.pdf.

Data-driven connections made within this report make the implications of non-tariff measures, especially for developing states, easier to comprehend.

“United Nations Security Council – Current Members.” United Nations. Accessed 7 July 2019. https://www.un.org/securitycoun-cil/content/current-members.

This source provides a list of permanent and non-permanent members of the UN Security Council.

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Non-UN Sources

“2019 Index of Economic Freedom.” The Heritage Foundation. Last modified 2019. https://www.heritage.org/index/.By comparatively ranking states according to measurable levels of economic freedom, the Heritage Foundation uses historical background and current events to justify its classification of each state and project countries’ future courses of action.

“A new dawn for protectionism? From trade wars to mega-regional trade agreements.” The Brookings Institution. Last modified 8 October 2019. https://www.brookings.edu/events/a-new-dawn-for-protectionism-from-trade-wars-to-mega-regional-trade-agreements/.

This filmed discussion considers the regional implications of protectionism on existing trade relationships and regional trends, particularly within the East Asia region.

Amadeo, Kimberly. “Doha Round of Trade Talks.” The Balance. Last modified 25 June 2019. https://www.thebalance.com/what-is-the-doha-round-of-trade-talks-3306365.

This article provides a general summary of the sector-based priorities of the Doha round of negotiations, as well as analysis of why the Doha talks were considered a failure.

“Arms embargoes.” Stockholm International Peace Research Institute. Accessed 27 July 2019. https://www.sipri.org/databases/em-bargoes.

By using a timeline of embargoes initiated through international organizations, namely the UN and EU, this source helps to draw conclusions about the necessary severity of a situation to prompt significant economic intervention on the global level.

Bacchetta, Marc and Beverelli, Cosimo. “Non-tariff measures and the WTO.” Center for Economic Policy Research. Last modified 31 July 2012. https://voxeu.org/article/trade-barriers-beyond-tariffs-facts-and-challenges.

This article explains the economic principles behind NTMs and their use globally, with specific emphasis on the disadvantages that developing states and LDCs face as a result of NTMs.

Brenton, Paul and Manchin, Miriam. “Analysis: Trade agreements fail to deliver for developing nations.” Politico. Last modified 4 December 2014. https://www.politico.eu/article/analysis-trade-agreements-fail-to-deliver-for-developing-nations/.

This article considers the unique positions of developing countries in relation to tense and unstable trade negotiations as developed countries protect their own interests at the cost of benefits to other states.

Broadman, Harry G. “Africa, The Continent Of Economic Misperceptions.” Forbes. Last modified 13 March 2018. https://www.forbes.com/sites/harrybroadman/2016/03/31/africa-the-continent-of-economic-misperceptions/#26dece566c54.

By applying a specific focus to the African continent, this article provides examples of how the economic situation in Africa must be better understood by the global community if it is to see notable improvements in trade and foreign investment.

Burns, Dan and Ekblom, Jonas. “Timeline: Key dates in the U.S.-China trade war.” Reuters. Last modified 1 August 2019. https://www.reuters.com/article/us-usa-trade-china-timeline/timeline-key-dates-in-the-u-s-china-trade-war-idUSKC-N1UR5RW.

Through a chronological record of most recent trade tensions between China and the United States, this source provides the evidence necessary to draw conclusions about temporal decision-making and the policy-driven reactions of each country to its counterpart.

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Chan, Szu Ping. “Why India is one of world’s most protectionist countries.” BBC. Last modified 11 April 2019. https://www.bbc.com/news/business-47857583.

This article takes a detailed look at the historical and modern conditions of the Indian economy, through which conclusions can be reached concerning how India interacts with the regional and global economies.

“China – 2019 Index of Economic Freedom.” The Heritage Foundation. Last modified 2019. https://www.heritage.org/index/country/china.

This subset of the annual index of economic freedom singularly considers the national factors and regional and global influences that shape China’s economy and position on international trade and investment.

“Chronological list of disputes cases.” World Trade Organization. Accessed 21 July 2019. https://www.wto.org/english/tratop_e/dispu_e/dispu_status_e.htm.

Analyzing the trends in dispute filing and settlement on a year-by-year basis is crucial when attempting to determine how current perceptions of inter-national trade are similar to or deviate from historical norms.

“Commodity market instability and asymmetries in developing countries: Development impacts and policies.” FERDI. Accessed 27 June 2019. http://www.ferdi.fr/en/event/commodity-market-instability-and-asymmetries-developing-countries-de-velopment-impacts-and.

This source focuses heavily on food security and the impact that decreasing global trade has on developing countries’ access to food and agricultural products.

“Commodities, Rainfall, Instability Biggest Challenges —African Ministers.” International Monetary Fund. Last modified 8 Octo-ber 2016. https://www.imf.org/en/News/Articles/2016/10/08/AM16-NA100816-Commodities-Rainfall-Instability-Biggest-Challenges-African-Ministers.

Although brief, this source provides an overview of the most important financial stressors that African countries in particular must address on a con-tinual basis. These areas of concern and the developing countries that are responding to these challenges are increasingly important to the mission of UNCTAD.

“Current status of disputes.” World Trade Organization. Last modified 2019. https://www.wto.org/english/tratop_e/dispu_e/dispu_current_status_e.htm.

Because of the nuanced format of the dispute settlement process through the WTO, differentiating between disputes based on progressive stages of the settlement is incredibly important. Without this differentiation, reported updates on country policy and dialogue between the opposing parties have no relevant context.

de Melo, Jaime and Nicita, Alessandro. “The implications of non-tariff measures for developing countries’ exports.” Center for Economic Policy Research. Last modified 4 May 2019. https://voxeu.org/article/implications-non-tariff-measures-devel-oping-countries-exports.

By noting the specific cases of action taken to limit developing countries’ accessibility to global trade, this article comments on the prevalence of NTMs and the countries that are impacted by their development and response.

“Dispute settlement activity – some figures.” World Trade Organization. Accessed 21 July 2019. https://www.wto.org/english/

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tratop_e/dispu_e/dispustats_e.htm.This source breaks down the operations of the WTO based on stages of dispute settlement and country-by-country engagement.

“The Doha Round.” World Trade Organization. Accessed 14 July 2019. https://www.wto.org/english/tratop_e/dda_e/dda_e.htm.This source gives explicit insight into the thoughts of negotiators involved in the Doha Round, as well as a temporal explanation of the events of the trade talks.

“DS580: India – Measures Concerning Sugar and Sugarcane.” World Trade Organization. Last modified 2019. https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds580_e.htm.

As one case of a WTO-filed dispute within a particular trade sector and against an individual country, this report serves as a genuine example of how discrepancies in trade policies become manifested through official disputes and are then investigated through WTO processes.

Evenett, Simon J. and Johannes Fritz. “The Tide Turns? Trade, Protectionism, and Slowing Global Growth.” Center for Economic Policy Research. Last modified 2015. https://www.alexandria.unisg.ch/253015/1/GTA18.pdf.

This report not only breaks down trade-related trends affecting the global economy and impactful trade agreements but addresses the specific policies and trade attitudes held by all G20 states.

Ferrantino, Michael. “Supply chains and behind-the-border trade barriers: Implications for developing nations.” Center for Eco-nomic Policy Research. Last modified 11 February 2012. https://voxeu.org/article/why-non-tariff-measures-matter-more-world-sliced-supply-chains.

Expanding upon the implications of NTMs, this article addresses the internal and external factors affecting developing countries in a disproportion-ately negative manner.

Fouda, Regine A. N. “Protectionism and Free Trade: A Country’s Glory or Doom?” International Journal of Trade, Economics and Finance 5, Vol. 3 (October 2012). Accessed 27 June 2019. https://pdfs.semanticscholar.org/6d2a/14b98280f98e67f129c8dce66081614c7f64.pdf.

This article notes the implications of protectionist policies adopted by individual states on global trade dynamics and economic prosperity.

Guarino, Arthur S. “The Economic Effects of Trade Protectionism.” Focus Economics. Last modified 1 March 2018. https://www.focus-economics.com/blog/effects-of-trade-protectionism-on-economy.

This article provides a more in-depth explanation of protectionism in practice and its effects on global and national economies.

Gunnella, Vanessa and Quaglietti, Lucia. “The economic implications of rising protectionism: a euro area and global per-spective.” European Central Bank. Last modified March 2019. https://www.ecb.europa.eu/pub/economic-bulletin/ar-ticles/2019/html/ecb.ebart201903_01~e589a502e5.en.html#toc3.

The value of this source lies in its consideration of the theory behind protectionism and the ways that it is currently applied, or may be applied in the future, on a country-by-country basis.

Heath, Thomas and Telford, Taylor. “Global markets rattled amid Brexit, U.S.-China trade war standoffs; Dow falls nearly 300 points.” The Washington Post. Last modified 3 September 2019. https://www.washingtonpost.com/business/2019/09/03/global-markets-wracked-with-anxiety-amid-brexit-us-china-trade-war-standoffs/?noredirect=on.

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This article outlines the most recent events, up to the date of publishing, related to the China-US trade war and its global impact. By focusing on regions outside of the two main parties, this article gives a more holistic presentation of the ongoing situation.

“India – 2019 Index of Economic Freedom.” The Heritage Foundation. Last modified 2019. https://www.heritage.org/index/country/india.

This source pays individual attention to economic conditions in India and the ways in which those may impact current and future international trade and development.

Johnson, Renée. “The U.S.-EU beef hormone dispute.” Congressional Research Service. Last modified 14 January 2015. https://fas.org/sgp/crs/row/R40449.pdf.

By considering the highly publicized example of trade disputes between the EU and the United States over hormones in beef and cattle-raising, this report notes the relationships between economic policy, international mediators, and public relations initiatives.

Kitson, Michael and Jonathan Michie. Managing the Global Economy, “Trade and Growth: A Historical Perspective.” Oxford, UK: Oxford University Press, 1995. Accessed 27 June 2019. https://books.google.com/books?hl=en&lr=&id=q7PQutu1ZM4C&oi=fnd&pg=PA3&dq=historical+trade+protectionism&ots=bqXI1g7P8z&sig=W9YHuNEIMbpXC4AaG7DBbQdIZV0#v=onepage&q=historical%20trade%20protectionism&f=false.

The noted chapter of this book draws historical ties between global political events and the concurrent economic climate.

Lawrence, Robert Z. and Litan, Robert E. “Why Protectionism Doesn’t Pay.” Harvard Business Review. Last modified May 1987. https://hbr.org/1987/05/why-protectionism-doesnt-pay.

Although dated, this journal excerpt places protectionism in a historical context and underlines themes in protectionist policies that remain true in the modern global economic climate.

Leung, Christine. “10 Examples of Trade Embargoes.” The Borgen Project. Accessed 21 July 2019. https://borgenproject.org/examples-of-trade-embargoes/.

An overview of well-known and notorious trade embargoes that makes the economic theory behind this protectionist measure more easily understood.

Masters, Jonathan. “What are Economic Sanctions?” Council on Foreign Relations. Last modified 7 August 2017. https://www.cfr.org/backgrounder/what-are-economic-sanctions.

By explaining the process of passing sanctions and the intended effects of those policies, this article gives insight about the increasing use of sanctions as an international political regulating mechanism.

Miles, Tom. “EU and Canada settle cattle battle at the WTO.” Reuters. Last modified 3 October 2017. https://www.reuters.com/article/us-canada-eu-wto-meat/eu-and-canada-settle-cattle-battle-at-the-wto-idUSKCN1C81HY.

This article explains the history behind trade disputes related to hormones in cattle-raising and meat production and also comments on the international collaboration needed to find a conclusion to the dispute through settlement processes.

Milner, Helen V. Resisting Protectionism: Global Industries and the Politics of International Trade. Princeton: Princeton University Press, 1989. Accessed 27 June 2019. https://books.google.com/books?hl=en&lr=&id=e-A9DwAAQBAJ&oi=fnd&pg=PP12&dq=trade+protectionism&ots=XjjuifPrZF&sig=0u_duUh-yC3j_CQRGqX34IWJyOk#v=onepage&q=trade%20

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protectionism&f=false.Referencing historic periods of global economic uncertainty, such as the 1920s following the first world war and the 1970s-1980s throughout the Cold War, this book helps to explain the evolving international utilization of protectionist trade policies.

Naidu, Vahini. “Knowledge Production in International Trade Negotiations is a High Stakes Game.” Global Policy Journal. Last modified 18 June 2019. https://www.globalpolicyjournal.com/blog/18/06/2019/knowledge-production-internation-al-trade-negotiations-high-stakes-game.

This article not only discusses the general processes involved in trade negotiations, but also incorporates examples of recent or ongoing negotiations and the roles that specific countries played in each discussion.

“Nairobi Ministerial Declaration.” World Trade Organization. Last modified 19 December 2015. https://www.wto.org/english/thewto_e/minist_e/mc10_e/mindecision_e.htm.

While providing an opportunity to consider individual country policies relative to discrepancies in access to global trade systems, this report also highlights existing means of facilitating international dialogue and trade negotiation.

“The Near Future: Tensions are Rising.” Global Trends – Office of the United States Director of National Intelligence. Accessed 21 July 2019. https://www.dni.gov/index.php/global-trends/near-future.

This article considers both international trends in trade activity, as well as regionally specific goals for trade and future economic activity.

Ostry, Jonathan D. “Why protectionism spells trouble for global economic growth.” World Economic Forum. Last modified 13 March 2019. https://www.weforum.org/agenda/2019/03/why-tariffs-spell-trouble-for-economic-growth/.

This source focuses on the effects of tariffs on global trade, as well as the economic theory behind current protectionist activity.

“Protectionism: The practice of following protectionist trade policies.” Corporate Finance Institute. Accessed 27 June 2019. https://corporatefinanceinstitute.com/resources/knowledge/economics/protectionism/.

This source provides a basic outline of the components of protectionist trade policies and the methods through which they are instituted.

“Report on G20 Trade Measures.” World Trade Organization. Last modified 2011. https://www.wto.org/english/news_e/news11_e/g20_wto_report_may11_e.doc.

Focusing on an increase in protectionist measures within G20 countries following the global economic crisis of 2008, this report notes the precursors to current trends in global trade and emphasizes the impact of trade policies held by G20 countries on developing states and the overall international trade arena.

Riley, Bryan and Tyrell, Patrick. “2018 Index of Economic Freedom: Freedom to Trade Is a Key to Prosperity.” The Heritage Foundation. Last modified 21 November 2017. https://www.heritage.org/sites/default/files/2017-11/BG3266.pdf.

By using a metric analysis of how political and social factors impact the economic state of a country, the Heritage Foundation’s annual index of eco-nomic freedom is a useful tool for understanding and comparing country policies regarding protectionism and global economic collaboration.

Shambaugh, George. “Embargo – International Law.” Encyclopaedia Britannica. Last modified 10 May 2019. https://www.britan-nica.com/topic/embargo-international-law.

In addition to providing a working definition of an embargo, this article details the repercussions of embargoes and touches on their historical use.

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Smillie, Dana. “Regional Trade Agreements.” The World Bank. Last modified 5 April 2018. https://www.worldbank.org/en/topic/regional-integration/brief/regional-trade-agreements.

This source provides preliminary analysis from the World Bank concerning decreasing inclinations toward large trade agreements in favor of smaller, regional arrangements.

Spence, Michael. “These are the real threats to the global economy in 2019.” World Economic Forum. Last modified 27 March 2019. https://www.weforum.org/agenda/2019/03/these-are-the-real-threats-to-the-global-economy-in-2019/.

Combining an evaluation of political uncertainty and instability with a consideration of related economic trends, this article outlines the most significant economic threats to the global economy in 2019.

Subervie, Julie. “The impact of world price instability on agricultural supply according to several macroeconomic factors.” HAL Sciences de l’Homme et de la Société. Last modified 9 February 2011. https://halshs.archives-ouvertes.fr/halshs-00564577.

This report not only considers the observable effects of price instability and disturbances within the agricultural sector, but also comments on the economic theory behind these effects.

Taha, Ali. “Sanctions and social media: Civil unrest and Iran-US relations.” Global Risk Insights LLP. Last modified 23 June 2019. https://globalriskinsights.com/2019/06/sanctions-social-media-unrest-iran-us/.

This article provides an example of civil unrest that results in the limitation of development initiatives due to a redirection of government focus and action.

“World Commodity Prices and their Impact on Developing Countries.” Overseas Development Institute. Accessed 27 June 2019. https://www.odi.org/projects/1481-world-commodity-prices-and-their-impact-developing-countries.

Although this project is dated and has already been completed, its description provides valuable information concerning the work that NGOs and external parties can do to help countries, industries, and economies suffering from the effects of price instability.

“United States – 2019 Index of Economic Freedom.” The Heritage Foundation. Last modified 2019. https://www.heritage.org/index/country/unitedstates.

Through an examination of current events and national and international influences, this source comments on the status of the United States economy relative to protectionism and participants’ abilities to participate in global trade.

Yun, Tang. “China’s Internal Challenges Will Threaten Xi Jinping’s Reign.” The National Interest. Last modified 21 January 2019. https://nationalinterest.org/feature/chinas-internal-challenges-will-threaten-xi-jinpings-reign-41952.

This article discusses the impact of China’s internal politics and legislative policies on international cooperation and multilateral trade.

Zandi, Mark, Steven G. Cochrane, Ryan Sweet, Ruth Stroppiana, Katrina Ell. “Pride and Protectionism: U.S. Trade Policy and its Impact on Asia.” Moody’s Analytics. Last modified October 2018. https://www.economy.com/getlocal?q=87319467-6a15-4d93-ab33-d2dbe2f74a99&app=eccafile.

This report expands upon traditional analysis of United States economic policy by looking beyond its effect on China to address the more expansive region of Asia in a holistic manner.

The National High School Model United Nations Con-ference (NHSMUN) is a project of IMUNA, a non-profit organization formally associated with the Unit-ed Nations Department of Global Communications (UNDGC). IMUNA is dedicated to promoting global issues education through simulation.

Written by Casey Collins and Margot Powers

Edited by Alex Burr, Walker Heintz, Omar Mufti, Althea Turley, and

John Wood

© 2019 IMUNA. All Rights Reserved.