Monday, February 9, 2009

Chaque Nation pour Elle-même

. Monday, February 9, 2009

Apologies if the title is all wrong; it came from Babel Fish.

France has angered, well, most of the rest of Europe in the past few days. First, French President Sarkozy blasted British Prime Minister Brown for lowering the value-added tax in the U.K., and for not coordinating more on stimulus plans, misconstruing the nature of the British economy in the process (see link). Then, Sarkozy bailed out France's major auto manufacturers without bothering to coordinate with the rest of Europe first. This angered a few in the EU, notably the Czechs. Then Slovakia (Slovakia!) decided to play hardball:

Fico, the Slovak prime minister, joined in the criticism of Sarkozy's remarks about a possible return of French car factories to France.

"If one country starts behaving like this - for example, France - then we will send Gaz de France home," Fico said, referring to the state-controlled utility.

It would be funny if it wasn't serious. But this is in line with Drezner's protectionism-prisoner's-dilemma line.

One interesting thing: the WTO is starting to kick into gear. It's going to be interesting to see how involved they get, how early they jump in, how many complaints are brought before the dispute settlement body, how those disputes are ruled, and whether states accept putative tariffs or actually change their policies. International organizations, from the WTO to the IMF to the World Bank and even EU, are going to be severely tested over the coming months. My guess is that some of these organizations will look very different in a few years.


Chaque Nation pour Elle-même




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