Bretton Woods 2020 London International Model United Nations 21st Session | 2020 1 London International Bretton Woods 2020 Model United Nations 2020 Table of Contents TOPIC A: Reforming the International Trade Regime 7 Definitions 9 Timeline of Events 13 Discussion of the Problem 15 Bloc Positions 19 Conclusion 21 Questions a Resolution should answer: 22 Further Reading 23 Bibliography 25 TOPIC B: Assessing the Reserve Currency System 27 Definitions 29 Timeline of Events 30 Discussion 33 Bloc Positions 35 Conclusion 37 Questions a Resolution should answer: 38 Further Reading 38 Bibliography 39 2 London International Bretton Woods 2020 Model United Nations 2020 INTRODUCTION LETTER Dear Delegates, Welcome to LIMUN 2020! Every year, LIMUN delivers some of the highest-quality Model UN debate in the country, and this year promises much the same. We’re excited to be simulating the Bretton Woods Committee (2020), a novel simulation that, to our knowledge, has not been run in the UK MUN circuit. Our committee will give you the chance to research and engage with the structures that have held up the world order since 1945 – and which are being challenged in the tumultuous times in which we live. We look forward to seeing you in February! Best wishes, Your Chairing Team 3 London International Bretton Woods 2020 Model United Nations 2020 Director – Allen Haugh Dear Delegates, Welcome to LIMUN 2020! My name is Allen, and I’m a finalist studying Philosophy, Politics, and Economics at Oxford. I’ll have the pleasure of serving as your Director for the Bretton Woods Committee (2020). I attended LIMUN for the last two years as a delegate and then as a chair; in that time, I’ve come to appreciate the professionalism of the conference and the high quality of debate that it entails. That said, LIMUN is some of the most fun I’ve had at an MUN conference; I’m looking forward to a similar experience this year! Best wishes, Allen Haugh 4 London International Bretton Woods 2020 Model United Nations 2020 Assistant Director – Kevin Chuang Dear Delegates, Welcome to LIMUN 2020, and welcome to the Bretton Woods Committee 2020. My name is Sheng-Wei Kevin Chuang and I’ll be serving as your Assistant Director. Having attended LIMUN for the past two years as a delegate, I have a deep respect for LIMUN’s chairing and debate quality. As such, I strive to put my 40-some conference experience to use in creating an enjoyable debate that both challenges and helps you grow as delegates. Bretton Woods Committee 2020 differs from other more ‘traditional’ committees as you are tasked to represent individuals who are current or former policymakers within the US government, or as select representatives of foreign governments. As such, beyond your commitments to your government and character’s values, you are to consider the interests and positions of the organizations that you’ve served in. Nonetheless, Bretton Woods 2020 seeks to tackle the vexing issues relating to international trade and monetary system. It is my hope that this committee offers you a challenging, yet stimulating debate, and greater insight into the behind-the-scenes political considerations that real-life policymakers face. 5 London International Bretton Woods 2020 Model United Nations 2020 Introduction to the Committee: The Bretton Woods Committee is an American organisation that was founded in 1983 and was designed to be an “an organized effort to ensure that leading citizens spoke about the importance of the international financial institutions (IFIs)”1. The primary IFIs the group focused on were the two Bretton Woods Institutions – the IMF and World Bank – though the topics the Committee addresses have expanded to include broader development and economic themes. The Committee has more than 650 members from academia, non-profits, businesses, and governments. It organizes conferences and seminars on the importance of economic cooperation and lobbies the US Congress on the same. As such, the Committee does not have a formal mandate beyond the ones it has set itself; nor does it any executive powers. In this simulation, you will represent individual members of the Bretton Woods Committee. You will be charged with researching the organizations they are affiliated with and forming viewpoints on the topics in this guide. In committee, you will seek to form consensus viewpoints on the positions the Bretton Woods Committee should take, writing detailed position statements in lieu of formal resolutions. 1 About the Committee. (n.d.). Retrieved from https://www.brettonwoods.org/page/about-the- committee. 6 London International Bretton Woods 2020 Model United Nations 2020 TOPIC A: Reforming the International Trade Regime 7 London International Bretton Woods 2020 Model United Nations 2020 Introduction With the rise of what is termed the “trade-investment-services” nexus2 and the diffusion of economic power to countries of the “Global South,” calls for reforming the international trade regime – rules, norms, and practices set forth by the World Trade Organization – is not a new phenomenon. As the Bretton Woods Committee – an American organization dedicated to ensuring the continued prominence and centrality of the Bretton Woods Institutions in the international economic order – delegates are in a unique position to examine ongoing systemic issues within the international trade regime from both the perspectives of individual American policymakers and select foreign representatives. While the issues that confront the international trade regime is far- reaching, delegates are expected to focus on the issues that underlie the ongoing US-Chinese trade war. As such, this study guide will be oriented towards issues such as unfair trade practices, WTO structures and categorization system – this would entail a particular focus on: non-tariff protectionist policies, currency devaluation, dispute-settlement mechanisms, definitions of developing and developed nations, and the practice and future of special and differential treatment in relation to infant industry protection and ‘catching-up’ by developing nations. Given the nature of this committee, the study guide will focus mostly on contextualising the aforementioned issues within the context of 2 Baldwin, R. (2011). 21St Century Regionalism: Filling the gap between 21st century trade and 20th century trade rules. 21st Century Regionalism: Filling the gap between 21st century trade and 20th century trade rules. World Trade Organization. Retrieved from https://www.wto.org/english/res_e/reser_e/ersd201108_e.pdf 8 London International Bretton Woods 2020 Model United Nations 2020 the US-China trade war. However, delegates are expected to expand their scope of analysis, to understand and evaluate these issues not just in the context of the US-China trade war, but also in relation to American- foreign trade relations/disputes. To note, this topic tasks delegates to consider the underlying issues that led to the trade war – that is, what are the merits to the American argument, are the Chinese pre-trade war policies justified, and what are the steps the WTO and its members can and should take to address these underlying issues? Definitions Trade War A trade war is broadly defined as a large and sudden increase in tariffs charged on imported goods, followed by a subsequent tit-for-tat retaliatory tariff raises. As Goldman Sachs points out, a trade war is difficult to empirically define as tariff increases themselves do not constitute as a trade war, particularly if they are done in small but steady increments or are following WTO-sanctioned responses. 3 The significance of a trade war in this topic would be its definition and its resolution – delegates need to consider how can the WTO serve as a means to resolve the trade dispute? Tariffs Broadly speaking, tariffs refer to “customs duties on merchandise imports,” which “gives give a price advantage to locally-produced goods over similar goods which are imported.” 4 While at the Uruguay Round of negotiations, member-states of the WTO have committed to cut tariffs and set their tariff rates at levels that are difficult to raise according to the “goods schedules that are part of the Uruguay Round” of negotiations, 3 Mandel, B., & Anderson, H. (2018, July 31). What is a trade war, and are we in one? Retrieved October 31, 2019, from https://am.jpmorgan.com/fi/institutional/library/what-is-a-trade-war. 4 World Trade Organization. (n.d.). Tariffs. Retrieved October 31, 2019, from https://www.wto.org/english/tratop_e/tariffs_e/tariffs_e.htm. 9 London International Bretton Woods 2020 Model United Nations 2020 5 there are no legally binding agreement within the WTO to limit and/or cut tariffs.6 Most tariff limits are negotiated on a state-to-state level. Delegates should consider what are the measures to be taken to ensure states follow through on their Uruguay round commitments? What are possible changes to the WTO rules to ensure legally-binding agreements on tariff reductions can be conducted through the WTO? Non-Tariff Barriers to Trade (NTB) Non-tariff barriers to trade are wide-ranging set of policies designed to prevent or limit the import or export of goods without the use of tariffs. Measures considered a part of NTBs include import quotas, subsidies, custom procedures, import licensing, rules of origin, and other legal or administrative processes that poses an obstacle to the free flow of goods and services. 7 There are three broad types of NTBs: protectionist measures, assistance measures, and non-protectionist measures.