The Free Trade Area of the Americas : positive outcomes for Brazil and the global community

This document discusses Brazil and the Free Trade Area of the Americas (FTAA). Since the FTAA is only a proposed agreement and trade apparatus at the moment, NAFTA is used as a working model and its influence on and benefit for Mexico and that country’s economy.

Net Neutrality Compendium: Human Rights, Free Competition and the Future of the Internet

The ways in which Internet traffic is managed have direct consequences on Internet users’ rights as well as on their capability to compete on a level playing field. Network neutrality mandates to treat Internet traffic in a non-discriminatory fashion in order to maximise end users’ freedom and safeguard an open Internet. This book is the result of a collective work aimed at providing deeper insight into what is network neutrality, how does it relates to human rights and free competition and how to properly frame this key issue through sustainable policies and regulations. The Net Neutrality Compendium stems from three years of discussions nurtured by the members of the Dynamic Coalition on Network Neutrality (DCNN), an open and multistakeholder group, established under the aegis of the United Nations Internet Governance Forum (IGF).

Rent dissipation, political viability and the strategic adoption of free trade agreements

This paper studies the political viability of free trade agreements (FTAs). The key element of the analysis is the “rent dissipation” that these arrangements induce: by eliminating intra-bloc trade barriers, an FTA reduces the incentives of the local firms to lobby for higher external tariffs, thereby causing a reduction of the rents created in the lobbying process. The prospect of rent dissipation moderates the governments’ willingness to participate in FTAs; they will support only arrangements that are “substantially” welfare improving, and no FTA that reduces welfare. Rent dissipation also implies that the prospects of political turnover may create strategic reasons for the formation of FTAs. Specifically, a government facing a high enough probability of losing power may want to form a trade bloc simply to “tie the hands” of its successor. An FTA can affect the likelihood of political turnover as well. If the incumbent party has a known bias toward special interests, it may want to commit to less distortionary policies in order to reduce its electoral disadvantage; the rent dissipation effect ensures that an FTA can serve as the vehicle for such a commitment. In nascent/unstable democracies, the incumbent government can use a free trade agreement also to reduce the likelihood of a dictatorial takeover and to “consolidate” democracy – a finding that is consistent with the timing of numerous accessions to and formations of preferential arrangements.

From legal commons to social commons: Brazil and the cultural industry in the 21st century

This article describes some of the current transformations regarding the processes by which information and culture are generated, from the point of view of developing countries. In this brief analysis, the article discusses the role of projects such as Creative Commons for developing countries. It also discusses the idea of legal commons and social commons. While the idea of legal commons can be understood as the voluntary use of licenses such as Creative Commons in order to create a “commons”, the idea of social commons has to do with the tensions between legality and illegality in developing countries. These tensions appear prominently in the so-called global “peripheries”, and in many instances make the legal structure of intellectual property irrelevant, unfamiliar, or unenforceable, for various reasons. With the emergence of digital technology and the Internet, in many places and regions in developing countries (especially in the “peripheries”), technology ended up arriving earlier than the idea of intellectual property. Such a de facto situation propitiated the emergence of cultural industries that were not driven by intellectual property incentives. In these cultural businesses, the idea of “sharing” and of free dissemination of the content is intrinsic to the social circumstances taking place in these peripheries. Also, the appropriation of technology on the part of the “peripheries” ends up promoting autonomous forms of bridging the digital divide, such as the “LAN house” phenomenon discussed below. This paper proposes that many lessons can be learned from the business models emerging from social commons practices in developing countries. The tension between legality and illegality in “peripheral” areas in developing countries is not new. The work of Boaventura de Sousa Santos and others in the 1970s was paradigmatic for the discussion of legal pluralism regarding the occupation of land in Brazil. This paper aims to follow in that same pioneer tradition of studies about legal pluralism, and to apply those principles to the discussion of “intellectual property” rather than the ownership of land.

Feasible multilateralism and the effects of regionalism

Recent research has underlined the efficiency of the GATT/WTO rules from the standpoint of politically motivated governments, emphasizing that the current multilateral rules are capable of delivering a politically efficient equilibrium. Such an equilibrium is, however, economically inef- ficient. Global free trade, in particular, is generally unattainable even in a fully cooperative world, provided that governments have distributive motivations. In such a context, we show that regional trade agreements can help move the world towards a welfare superior equilibrium. The reason is that, as members of regional trade agreements lower trade barriers against one another, they are induced to reduce their multilateral tariffs as well. Once we account for these endogenous changes–and only then–we find that regionalism can raise world welfare even in a fully cooperative (but political) world. We also find, however, that members are likely to gain "too much" from regional integration, thereby harming outsiders.

Monetary policy, default risk and the exchange rate

In a country with high probability of default, higher interest rates may render the currency less attractive if sovereign default is costly. This paper develops that intuition in a simple model and estimates the effect of changes in interest rates on the exchange rate in Brazil using data from the dates surrounding the monetary policy committee meetings and the methodology of identification through heteroskedasticity. Indeed, we find that unexpected increases in interest rates tend to lead the Brazilian currency to depreciate. It follows that granting more independence to a central bank that focus solely on inflation is not always a free-lunch.