About the seminar
Cross-border capital flows are the engine of international finance and have assisted in the expansion, development and prosperity of nations. But the benefits of cross-border capital are not without risk as crises in Asia (1997), Argentina (2001) and globally (2008) illustrate. Asset bubbles, ‘hot’ money movements, currency appreciation and the like can overwhelm regulators and increase susceptibility to large and unstable outflows. For this reason, some nations resort to capital controls – including limitations or restrictions on the transfer of financial assets, use of foreign currency and bank deposits/withdrawals; cross-border transaction taxes; capital exit levies; and differential exchange rates – as a policy instrument.
In 2012, the International Monetary Fund (IMF) developed a new ‘institutional view’ on the regulation of cross-border capital flows – shifting away from its traditional role as an ardent proponent of liberalised capital accounts to endorsing and even requiring under certain circumstances regulation through capital controls (‘capital flow management measures’ (CFMs)). The IMF recognises but does not resolve the sizeable risk of conflict between CFMs in IMF stability/loan programmes and trade/investment obligations – namely the General Agreement on Trade in Services (GATS), bilateral/regional trade agreements and international investment agreements – simply requesting other institutions and members ‘take [its] view into account’ when drafting new agreements.Simply stated, what the IMF now condones and may require could directly conflict with obligations under the trade/investment regime.
This presentation focuses on the potential conflicts between the IMF’s view and the three strains of IEL, offering preliminary findings on the major sources of conflict – that is, the authority under Article VI of the IMF Articles to issue the view (and resulting controversies), various articles in the GATS Agreement and with IIA’s free transfer clauses, as well as issues with safeguards under the latter two regimes.
Tuesday 7 May 2019 | Melbourne Law School | Room 223
1:00 pm - 2:00 pm | 185 Pelham Street, Carlton VIC 3053
About the presenter
Bryan Mercurio is Chair Professor, Associate Dean (Research) and Vice Chancellor’s Outstanding Fellow of the Faculty of Law at the Chinese University of Hong Kong (CUHK). Specializing in international economic law, Professor Mercurio is a leading expert in the intersection between trade law and intellectual property rights. His work also frequently deals with free trade agreements, dispute settlement and increasingly international investment law. Professor Mercurio is co-author of one of the most widely used case books on WTO law (Hart Publishing, 2018, 3rd ed) and co-editor of the leading collection on bilateral and regional trade agreements (Cambridge University Press, 2nd ed, 2016).