Regional Trade Agreements: Integration or Discrimination?

 In a recent meeting, Russia and China reiterated their commitment to support each other's core interests, signaling a strengthening alliance. Meanwhile, Russian President Putin pledged to enhance economic ties with Brazil during a meeting at the Kremlin. The relationship between Africa and China was also in focus as Senegal hosted the 2021 Forum on China-Africa Cooperation.

Amidst growing global tensions and the erosion of globalization, economists are divided on the impact of regional alliances on trade. Some argue that a fragmented world will strengthen regional partnerships, while others, like Michele Ruta, a trade economist, believe it will weaken them. Ruta suggests that the current age of conflict may change the nature of regionalism, leading to more discriminatory practices. Regional trade agreements (RTAs) increasingly include provisions that favor member countries while imposing trade barriers on non-members. For instance, export bans on food and the use of local content requirements in subsidy schemes create discriminatory trade practices.

Regional trade agreements serve as a means to establish market rules and reduce tariffs among member countries. While the World Trade Organization (WTO) facilitates multilateral trade agreements, regional agreements have their advantages. They allow a group of countries to deepen integration beyond what is possible at the multilateral level. However, some countries may exploit regional trade agreements to discriminate against non-members. Market forces alone do not guarantee fair trade practices within regional agreements. Governments may have other motivations, such as national security or industrial policy, for discriminatory practices. Ruta highlights that trade agreements have become more complex over the past three decades, covering a wide range of policy areas beyond traditional trade aspects.

Despite the increase in the number and complexity of regional trade agreements, their success in promoting trade and integration between member countries is evident. These agreements have also shown positive impacts on non-members by reducing trade costs and promoting environmental regulations. For instance, provisions protecting against deforestation have led to significant reductions in forest loss. However, not all provisions have been successful, as bans on child labor have inadvertently affected educational outcomes and increased poverty in some cases.

The World Trade Organization has limited authority over regional trade agreements. Although countries are required to notify the WTO about their agreements, the organization has little power to enforce regulations. Regional trade agreements continue to play a significant role in shaping trade dynamics, with both positive and negative implications for global integration.

Michele Ruta's research, titled "The Rise of Discriminatory Regionalism," explores these trends in greater detail and is available in the June edition of Finance & Development magazine.

Source:https://www.imf.org/en/News/Podcasts/All-Podcasts/2023/06/01/michele-ruta-on-discriminatory-regionalism?utm_medium=email&utm_source=govdelivery

Technical Analysis | The 20-day moving average

 The 20-day moving average is a technical analysis tool used to smooth out short-term price fluctuations and identify the overall trend in a stock's price over the past 20 trading days. To "reclaim" the 20-day moving average means that the stock's price has moved above the average after previously trading below it. To determine if a stock has reclaimed the 20-day moving average, you would need to compare the current price of the stock to its 20-day moving average. If the stock's price is currently trading above the 20-day moving average, it can be considered as having reclaimed it.

Copyright Office Updates Rules for Secure Tests

 he United States Copyright Office has implemented five interim rules to regulate the examination of secure tests. These rules aim to streamline the examination process while ensuring efficiency and fairness.

The first interim rule, issued on June 12, 2017, outlines the application procedure for secure tests. Applicants are now required to submit an online application, a redacted copy of the entire test, and a brief questionnaire through the electronic registration system. This allows the Copyright Office to review applications and determine if the work qualifies as a secure test. Only eligible applicants will be granted an in-person examination appointment, during which the Office will assess the copyrightable elements of the test. The second interim rule, issued on November 13, 2017, introduces a new registration option for secure test questions and answers, as well as related materials stored in electronic databases or test banks.

On May 8, 2020, the Office issued an interim rule that modified the definition of a secure test to accommodate the COVID-19 pandemic. Previously, secure tests were required to be administered at specific centers. However, due to remote testing necessitated by the national emergency, the rule was amended to allow remotely administered tests to qualify as secure tests, provided the test administrators implemented security measures equivalent to in-person proctoring. Recognizing the ongoing impact of the pandemic, on February 19, 2021, the Office issued another interim rule permitting applicants to request a remote examination via secure videoconference for secure test registrations. This adjustment aimed to facilitate the examination process while adhering to social distancing measures.

In its most recent interim rule issued on June 1, 2023, the Office extended the provisions of the May 8, 2020, interim rule indefinitely. This rule removes the expiration date tied to the national emergency and maintains the expanded definition of secure tests under the same conditions as outlined in the 2020 interim rule. These interim rules provide a framework to ensure that secure tests receive fair and thorough examination by the Copyright Office. By adapting to the changing landscape, including remote testing due to the COVID-19 pandemic, the Office strives to uphold the integrity and security of secure tests while accommodating evolving circumstances.

Source:https://copyright.gov/rulemaking/securetests/?loclr=eanco

The FDIC is inviting public comments on proposed rules for automated valuation models (AVMs) used in determining the value of real estate properties for mortgage loans

 The Federal Deposit Insurance Corporation (FDIC), along with several other government agencies, is inviting public comments on proposed rules for automated valuation models (AVMs) used in determining the value of real estate properties for mortgage loans. This initiative aims to implement quality control standards mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The agencies involved in this effort include the FDIC, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the National Credit Union Administration, the Federal Housing Finance Agency, and the Consumer Financial Protection Bureau. By seeking public input, these organizations aim to gather valuable feedback from stakeholders and ensure the rules reflect the needs and concerns of the public. The proposed rules would require mortgage originators and secondary market issuers to adhere to quality control standards when using AVMs to determine the collateral value of a mortgage secured by a consumer's primary residence. These standards are designed to promote confidence in the accuracy of AVM estimates, prevent data manipulation, avoid conflicts of interest, and include random sample testing and reviews. Additionally, the proposed rules would introduce a new quality control factor to ensure compliance with applicable nondiscrimination laws.

Under the proposed rules, institutions engaging in credit decisions or covered securitization determinations would need to establish policies, practices, procedures, and control systems to ensure AVMs used in these transactions meet the prescribed quality control standards. This would help mitigate discrimination risks and foster well-functioning AVMs that produce reliable estimates. It's important to note that the proposed rules specifically apply to AVMs used in making credit decisions or covered securitization determinations, rather than other uses like ongoing value monitoring or validating completed valuations. Secondary market issuers would be subject to these rules when using AVMs for covered securitization determinations or appraisal waivers. AVMs used solely for collateral value monitoring would not be subject to the quality control factors.

The agencies are welcoming public comments on the proposed rules, which will be accepted for a period of 60 days after publication in the Federal Register. This public input is crucial for the agencies to gain insights, perspectives, and suggestions from individuals and organizations involved in the real estate and mortgage industries. The FDIC, an independent agency established by Congress, plays a vital role in maintaining stability and public confidence in the country's financial system. The agency insures deposits, oversees financial institutions for safety and consumer protection, resolves complex financial institutions, and manages receiverships. By actively seeking public input, the FDIC and other government agencies aim to ensure fair and transparent practices in the valuation of real estate properties for mortgage loans, benefitting both consumers and the financial industry as a whole.

Source:https://www.fdic.gov/news/financial-institution-letters/2023/fil23026.html?source=govdelivery&utm_medium=email&utm_source=govdelivery