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Until recently, the World Trade Organization (WTO) has been an effective framework for cooperation because it has continually adapted to changing economic realities. The current Doha Agenda is an aberration because it does not reflect one of the biggest shifts in the international economic and trading system: the rise of China. Even though China will have a stake in maintaining trade openness, an initiative that builds on but redefines the Doha Agenda would anchor China more fully in the multilateral trading system. Such an initiative would have two pillars. First, a new negotiating agenda that would include the major issues of interest to China (export restrictions on foodstuffs, investment rules, and green protectionism) and its trading partners (exchange rates and state capitalism), and thus unleash the powerful reciprocal liberalization mechanism that has driven the WTO process to previous successes. Second, new restraints on bilateralism and regionalism that would help preserve incentives for maintaining the current broad non-discriminatory trading order.

Working Paper by Aaditya Mattoo and Arvind Subramanian.

Testimony submitted by Simon Johnson to the Subcommittee on Financial Institutions and Consumer Protection, Senate Committee on Banking, Housing, and Urban Affairs hearing on "A New Regime for Regulating Large, Complex Financial Institutions," December 7, 2011.

Europe is seeking further assistance from the international community through the International Monetary Fund (IMF) to address the crisis in the euro area. The global community has a clear interest in aiding Europe. But the package being developed will be the largest ever adopted by the IMF and poses risks for that institution as well as the non-European members supporting it. The rest of the world thus deserves several things in return. One critical change to European decision-making should be among them.

RealTime post by Randal C. Henning.

Everyone wants Iran to abandon its nuclear weapons program, but few urge a military strike. Financial sanctions, including several directed at leading Iranian banks, have been applied and tightened over the years by the United States Treasury, working with European and other allies. Now the Senate has unanimously approved a bill calling on the President to impose stiff new financial sanctions directed at the Central Bank of Iran (CBI). The Obama administration opposed the measure, however, arguing that it would be counterproductive and alienate key allies who have been cooperating in the campaign to isolate Tehran.

RealTime post by Gary Clyde Hufbauer and Julia Muir.

Energy-exporting countries have more at risk than any other participant in the world economy if the euro crisis plunges Europe into recession. These countries would likely experience greater losses in 2012 should Europe fail. Oil and natural gas prices would plummet, and the price collapse would likely be larger than the 2008–09 decline. Energy-exporting countries therefore should be working feverishly with the International Monetary Fund (IMF) and the European Union to rescue the euro. They, along with China and other large holders of foreign exchange reserves, should lend to the IMF to help it construct an emergency lending facility with capacity of more than €1 trillion. The fund, administered by the IMF, would be used to buy bonds issued by Greece, Italy, Spain, Portugal, and Ireland. The goal should be to bring interest rates on long-term bonds down to 3 percent. Simultaneously, efforts should be redoubled to fix the economic problems in the troubled nations and restore balance to their budgets. An energy price collapse would increase disruptions in energy-exporting countries, promote economic ills in some consuming nations, such as Canada, and almost certainly start yet a third, even more violent, economic cycle.

The excessively gloomy headlines about the imminent demise of the euro currency have at least temporarily receded as European Union (EU) politicians and central bankers play out their sequenced games of political quid pro quo. Progress is being made.

RealTime post by Jacob Funk Kirkegaard.

Edwin M. Truman explains why the US recovery is endangered by Europe and what Treasury Secretary Geithner and the Europeans might do about it.

Anders Åslund says the recent political setbacks for Prime Minister Putin have poisoned US relations and jeopardized prospects for improved trade relations.

Mohsin S. Khan assesses the economic implications of the recent parliamentary election victory scored by the Islamic parties in Egypt.

On Saturday December 10, the spell of the Vladimir Putin regime was broken. Today, the key questions that many are asking are how fast he will lose power and what will come in his place.

RealTime post by Anders Åslund.

Nicolas Véron says that it is unclear if the markets will be patient enough for the reforms discussed in Europe to be implemented in the months ahead.

When trade ministers meet in the World Trade Organization in Geneva next week, they will arrive with a set of marching orders from their bosses.

Op-ed by Aaditya Mattoo and Arvind Subramanian.

Anders Åslund recently wrote a great deal of sense in RealTime (December 5) about a development that no longer looks impossible even if it is widely agreed that it would be unfortunate. I certainly agree that if a euro area breakup happens, it is better that it be done quickly, by all members simultaneously; that the national currencies should revert to their old names; that the old central banks that still exist should take responsibility for running monetary policy by a low-inflation rule in each of the successor monetary areas; and that all euro assets that were issued by a national authority should be redenominated into the new national currencies. Unfortunately this still leaves at least one critical issue to be resolved. And there is one issue for which Åslund's recommendation may prove infeasible.

RealTime post by John Williamson.

Yet another European Union summit meeting has come and gone surrounded by inflated expectations of a decisive breakthrough in the euro area debt crisis. Employing the same hyperbole applied to the Congressional budget "super committee"—despite the fact that the committee comprised the same members who had gridlocked on the issues beforehand—media commentators measured the summit by unrealistic standards.

RealTime post by Jacob Funk Kirkegaard.

Marcus Noland discusses the downside risks after the death of Kim Jong-il and suggests that a possible agreement to increase food aid would be appropriate.

The euro area crisis keeps evolving along multiple dimensions. On the sovereign debt front, no deal is yet in sight on Greece's debt restructuring, and Italy and Spain face major refinancing needs in early 2012. On the institutional reform front, the summit on December 9 fell short of delivering a true fiscal union, and tensions between the euro area and the United Kingdom have been brought to the boiling point. On the growth front, a possible deep and prolonged recession looms.

RealTime post by Nicolas Véron.

WASHINGTON—The Peterson Institute for International Economics is pleased to announce that C. Fred Bergsten, director of the Institute, has been appointed to the Advisory Committee of the Export-Import Bank of the United States (Ex-Im Bank). The Ex-Im Bank is the official export credit agency of the United States government. Its mission is to assist in financing the export of US goods and services to international markets at no cost to American taxpayers. The Ex-Im Bank approved $32.7 billion in total authorizations in FY 2011, including more than $6 billion directly supporting small-business export sales. Its authorizations support an estimated $41 billion in US export sales and approximately 290,000 American jobs.

Read full news release.

Reactions to the results of the annual UN climate change conference that wrapped up last week in South Africa have been all over the map. The AP heralded the outcome as a "landmark deal," The New York Times and Reuters called it "modest." And the always astute Michael Levi at the Council on Foreign Relations (CFR) cautioned that even this level of celebration is misplaced. This wide range of reactions is understandable, as there wasn't one agreement reached in Durban, but three. And the value of each of those agreements depends entirely on your view of how best to tackle climate change.

RealTime post by Trevor Houser.

Jeffrey J. Schott says China is sending a message of displeasure on commercial trade issues that is as much political as it is trade-related.

Nicolas Véron says the markets doubt the strength of Europe's economic prospects, its banking system, its fiscal discipline accords, and its bailout mechanisms.

Morris Goldstein discusses the China-Japan currency pact signed in December—and why Beijing faces obstacles in its bid to elevate the global role of the yuan.

Jeffrey J. Schott says a new law calling for sanctions on Iran's central bank and new European curbs on oil purchases are raising the stakes in the West's confrontation with Tehran.

The Russian "Snow Revolution" is proceeding in slow motion. The two big demonstrations on December 10 and 24 represented Vladimir Putin's worst nightmare: peaceful mass protests by the new professional middle class. For seven years, he has been preparing measures to counter a Russian version of the Orange Revolution in Ukraine, but to no avail. Suddenly, his repressive legislation and violent young guards do not look frightening but obsolete and ridiculous.

RealTime post by Anders Åslund.

As the most anxious year in the history of the euro draws to a close, and with dire predictions about the euro's fate in 2012, it is an irresistible option for this author to take stock in a more realistic way. Despite all this year's drama, the value of the euro is almost exactly where it was at the beginning of 2011. Indeed it seems 2011 and its attendant turmoil might just as well not have happened. It was certainly no annus horribilis for the value of Europe's currency. As Figure 1 shows, the real effective euro exchange rate today is above what it was in May–June 2010, when the crisis was only about Greece, and even slightly above what it was when the crisis spread to Ireland and Portugal in late 2010. After the prolonged decline in the real trade weighted value of euro following the revelation of the fraudulent Greek fiscal data in October 2009, it is almost as if investors actually stopped worrying, as it became clear by May–June 2010 that in the euro area (like everywhere else) the bailout that some doubted did happen.

RealTime post by Jacob Funk Kirkegaard.

We all agree. Russia needs to be rebuilt. Ample material is available: talented human capital, lots of cash, and plenty of raw materials. But how should it be done? The downside is that Russia's two biggest problems of corruption and authoritarianism are crippling the country.

Op-ed by Anders Åslund.

'The reason is its misuse of the concept of science...IPCC 'science' is a 'brand'” for selling propaganda'

Neil Cavuto of Fox News credits Climate Depot with exposing the Chevy Volt's failure: 'Thank you Marc. You were way ahead of this young man'

Volt named one of 'The Worst Product Flops of 2011' by Wall Street group: 'Sales for the vehicle have been consistently low'

'Morano got a boost from his former boss Limbaugh on Dec.19...Morano later celebrated the news that Gingrich had scrapped Hayhoe's chapter on climate...The fiasco attests to the influence wielded over the GOP by right-wing media & others who reject the scientific consensus...Morano previously said GOP candidates 'can believe in the science of global warming ... if you keep your mouth shut about it and you advocate no quote-unquote solution to the problem'

Emanuel@mit.edu

Flashback: MIT's Lindzen Reveals Kerry Emanuel's Ethics: 'Emanuel received relatively little recognition until he suggested that hurricanes might become stronger in a warmer world'

Gleick claims 'the scientific evidence for the accelerating human influence on climate further strengthened'

Climate Depot Response: Climate Depot Special Report: A-Z Climate Reality Check -- Sub-Prime Science Exposé: 'The claims of the promoters of man-made climate fears are failing'

Huh? Revkin: 'The marching orders for GOP pres. candidates appear to be out of sync with attitudes of most members of their party, outside a small fringe that is obstructionist on anything smacking of an energy policy...I'm sure Marc Morano of Climate Depot will be able to keep collating, and taking credit for, GOP statements of climate doubt at least through end of primary season'

'The 2000's show more F0 tornadoes, but this is the first decade Doppler systems have been fully operational, so we should now have a good basis for the future'

Cold-stunned turtles washing ashore in North Carolina

'A major outcome from UN climate talks in December was a plan to craft a deal by 2015 — one that would include big, developing nations such as China —and have it come into force by 2020' Obama's main GOP White House rivals are critical of emissions limits and skeptical of climate science'

'A new paper has been published by the Journal of Atmospheric and Solar Terrestrial Physics,authored by Nicola Scafetta,2012: Testing an astronomically based decadal-scale empirical harmonic climate model versus the IPCC (2007) general circulation models'

'Confirm that global warming has stopped over the last 15 years despite large increases of atmospheric CO2 levels'

'Kevin Theissen is incorrect in his statement that 'most episodes of climate change in Earth history' are at a comparatively slow rate...If Kevin Theissen is claiming that carbon emissions by humans is the dominate forcing of climate change over decadal time periods, examples of other forcing refute this claim'

'Climate alarmists have long predicted that CO2-induced global warming -- which they claim has (1) accelerated significantly over course of 20th century and is (2) unprecedented with respect to past millennium or more -- should be (3) greatly amplified in earth's polar regions. However, Thamban et al.'s results clearly indicate that all three of these climate-alarmist claims are false in regard to this portion of the planet's southern polar region'

'Cold snaps have emerged as a leading killer of manatees over the past three years, exceeding deaths by boat collisions...'Manatees are tropical animals so they start to suffer when the water temperature goes below 68 degrees'

'There is nothing that plants hate more than warmth,water and fertilizer. They prefer cold,dry,nutrient deficient conditions. Every global warming reporter understands that'

Moore: 'And no matter how many are built, they won't replace coal, gas or hydro or nuclear plants, because they are continuous and wind is not always reliable'

December sales released, show GM sold only 1,529 Chevy Volts -- 'sold 7,671 Chevy Volts in 2011, fewer than the 10,000 it had expected to sell'

Volt woes: 'This might be the most government-supported car since the [East German] Trabant'

'In correspondence with to patterns of the North Atlantic Oscillation, seal populations declined from 1950 to 1972 and then gradually recovered from 1973 to 2000. 'It's interesting to see how the abundance of animals tends to fluctuate in sync with the North Atlantic Oscillation'