International Economic Law

Interviewer: Lucy Vernall (Project Director, Ideas Lab)
Guest:  Dr Celine Tan
Recorded: 09/05/2011
Broadcast: 16/05/2011

Intro VO: Welcome to the Ideas Lab Predictor Podcast from the University of Birmingham. In each edition we hear from an expert in a different field, who gives us insider information on key trends, upcoming events, and what they think the near future holds.

Lucy: Today we’re joined by Dr Celine Tan who is a lecturer in Law in the Law School at Birmingham University. Welcome, Celine.

Celine: Thank you, Lucy.

Lucy: Now Celine, you look at international economic law.

Celine: I do. I look at international economic law and international economic organisations.  

Lucy: So we’re talking about organisations like the World Bank, the World Trade Organisation.

Celine: Yes and the International Monetary Fund, the IMF, economic agencies of the United Nations, for example the United Nations Conference on Trade and Development.

Lucy: And sometimes you do consultancy and other times you critique.

Celine: I have done consultancies for the organisations and I do actually hold them to account in terms of doing some critique of their activities and their operations.

Lucy: And you look at where international economic law intersects with development issues?

Celine: I do, yeah, how international economic rules and international economic organisations in terms of their activities’ impact on social and economic development, particularly in what we call developing countries: countries which haven’t attained the level of industrialisation, like many countries in the West.

Lucy: So Celine, a lot going on in the last few years with the international financial crisis in your area.

Celine: Yes, the global financial crisis is something on everybody’s mind. It is something that represents the inadequacies of the international economic legal system today, in the sense that we don’t have a comprehensive international financial legal system to deal with the prevention of crisis and also importantly, the intervention and resolution of crisis. This is why we see lots of countries having to go through sort of what is known as ad-hoc restructuring processes every time they have a financial crisis.  We don’t have an international system to regulate financial markets to ensure that the negative economic practices of one country doesn’t overflow and affect all the other countries in the world, which is what happened in the recent financial crisis. The banking crisis in the US caused the global financial crisis today, that’s a lack of regulation.  We also don’t have a system which allows countries, when facing financial crisis, to get out of the problem, to repay their debts in a very orderly fashion and that is the main problem in the international economic system today.

Lucy: There’s obviously been a focus on Western countries like Greece and Portugal recently but you look particularly also at the developing countries in the world, and even the least developed countries in the world.

Celine: Yes, I tend to look at how international economic rules and the operations of international economic organisations affect developing countries and also a group of countries known as the least developed countries: countries that are at the most economically vulnerably, most sensitive to environmental changes, and these countries are disproportionately affected by economic crisis and by environmental crisis.

Lucy: So these are the countries that are really going to be at the sharp edge of climate change.

Celine:  Yes, these countries are particularly vulnerable to climate change because they don’t have the economic resources to adapt to the impact of climate change, they cannot mitigate the process of climate change obviously because they’re not primarily responsible for them and because of their dependence on agricultural products as a means of income, they’re very susceptible to climate change which affects their crops. 

Lucy: So which countries in particular are we talking about? There’s a list of ten isn’t there of least developed countries?

Celine:  A lot of the countries in Sub-Saharan Africa and South Asia are particularly vulnerable to the effects of climate change. There is a study that has shown that there are ten countries most vulnerable to the socio-economic impacts of climate change and these are Afghanistan, Burundi, Chad, Comoros, Eritrea, Ethiopia, Niger, Somalia, Rwanda and Yemen and this study by the Global Humanitarian Forum has shown that there have been 180 incidents of storms, of floods, in these particular countries in the last thirty years with 11 million people affected by drought in 2008 alone, 85 million being affected by droughts in the last three decades in these ten countries alone. So these countries are extremely sensitive to the impact of climate change.

Lucy: So we’re in a situation where climate change has arguably been created by industrialised countries who are pumping out carbon and it’s these least developed countries who aren’t responsible for climate change who are feeling the effects of it.

Celine: Yes, that is the irony of the situation. Industrialised countries through the industrialisation process have contributed substantially to climate change but it is the least developed countries which have contributed very minimally, if at all, to the current climatic changes that are feeling the impact of it and that’s why we need international law to apportion blame in some way so that the countries most responsible provide the financial resources to support the countries most affected by climate change to adapt to the impacts of climate change.

Lucy: So the big polluters like us, like the US, need to pay up?

Celine: Yes, in effect. There needs to be a redistribution of wealth because obviously countries have gained industrially, economically, as a result of using up, you know, their allocation of carbon. An average person in the US uses more carbon in their first six weeks of life than an average Tanzanian will do in his entire lifetime.  So this disparity has to be addressed, particularly when the average Tanzanian has to bear the brunt of climate change today.

Lucy: Another one of the things that you look at are how international trade laws impact on individual countries and their own development.

Celine: Yeah, I look generally at international economic law and their effects on countries which are bound by them.  Countries sign up to international trade agreements such as the trade agreements under the World Trade Organisation, the WTO. These rules bind countries in terms of limiting their ability to use certain economic policy to achieve certain economic goals. There are benefits to this in the sense that it prevents countries from using what is known as protectionist measures which hinder the free-flow of goods and services across different countries.  So very high taxes to prevent import of goods into a particular country and that has a negative effect for international trade because obviously countries cannot trade as easily as they should but there is also a downside, particularly for developing countries – so for example a country like Ghana which had a thriving textile industry because the Governments used to impose very high taxes on the import of foreign fabrics and textiles to enable the local textile industry to develop, the Government used to provide subsidies to these industries to enable local textile producers to function and to develop their enterprises. This is all unlawful under international trade rules and as a result the Government had to lower the taxes on the import of textiles. As a result the local textile producers can’t compete with cheap imported clothes and fabric and because the Governments are not allowed to subsidise them anymore, a lot of them have had to pack up and the local industry has collapsed and this is a very sad story that happens to many, many, many developing countries as a result of trade rules.

Lucy: So free trade can be great for consumers because it can mean we get cheaper goods but for developing countries it means it’s much, much harder for them to nurture a young industry and to grow it.

Celine: Yes and it’s not just developing countries, it’s countries everywhere. I mean if you look in the UK I think a lot of farmers are also quite concerned with trade liberalisation because it affects their ability to sustain their farming practices. It’s getting very expensive now to produce goods and services if they’re being faced with cheaper imports.

Lucy: Dr Celine Tan, thank you very much.

Celine: Thank you.

Outro VO: This podcast and others in the series are available on the Ideas Lab website: On the website, you can find out how to e-mail us with comments, questions or suggestions for future topics for the podcast. There's also information on the free support Ideas Lab has to offer to TV and radio producers, new media producers and journalists. The interviewer for the Ideas Lab Predictor Podcast was Lucy Vernall, and the producer was Andy Tootell.