Currency Undervaluation and Sovereign Wealth Funds : A New Role for the World Trade Organization

Mattoo, Aaditya ; Subramanian, Arvind

World Bank, Washington, DC

关键词: AGREEMENT ON SUBSIDIES;    AGRICULTURE;    ARBITRATION;    ASSET MANAGERS;    ASSET PRICES;   

DOI  :  10.1596/1813-9450-4668
RP-ID  :  WPS4668

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Two aspects of global imbalances -undervalued exchange rates and sovereign wealth funds -require a multilateral response.For reasons of inadequateleverage and eroding legitimacy, the International MonetaryFund has not been effective in dealing with undervaluedexchange rates. This paper proposes new rules in the WorldTrade Organization to discipline cases of significantundervaluation that are clearly attributable to governmentaction. The rationale for WTO involvement is that there arelarge trade consequences of undervalued exchange rates,which act as both import tariffs and export subsidies, andthat the WTO's enforcement mechanism is credible andeffective. The World Trade Organization would not beinvolved in exchange rate management, and would not displacethe International Monetary Fund. Rather, the authors suggestways to harness the comparative advantage of the twoinstitutions, with the International Monetary Fund providingthe essential technical expertise in the World TradeOrganization's enforcement process. There is a bargainto be struck between countries with sovereign wealth funds,which want secure and liberal access for their capital, andcapital-importing countries, which have concerns about theobjectives and operations of sovereign wealth funds. TheWorld Trade Organization is the natural place to strike thisbargain. Its General Agreement on Trade in Services, alreadycovers investments by sovereign wealth funds, and otheragreements offer a precedent for designing disciplines forthese funds. Placing exchange rates and sovereign wealthfunds on the trade negotiating agenda may help revive theDoha Round by rekindling the interest of a wide variety of groups.