International Organizations and International Transactions — Can Global Agreements Help Resolve Conflict Over Sovereign Debt Restructurings and Investments by State-Owned Enterprises?

Foreign Money
Two international economic areas have been in the news recently as wrought with conflict and need of a better mechanism to resolve disputes. The first is sovereign debt restructuring as evidenced by Argentina and Greece. The second is the conduct of state-owned enterprises in foreign direct investment as involving Chinese investments recently in Canada and the United States.
What models can be used to further resolve disputes in these two  areas (sovereign debt restructurings and foreign investment by SOE’s)?
I would suggest looking at the proposals made by the IMF concerning sovereign wealth funds several years ago that resulted in the “Santiago Principles” of 2008. I would also suggest looking at the older IMF proposals concerning the “sovereign debt restructuring mechanism” (SDRM) of 2002.
Both sovereign debt restructuring and investments by state-owned enterprises (SOE) are essential to global trade today. The first really entails a sort of voluntary transnational bankruptcy proceeding for a nation.  The second involves assessing foreign corporate ownership and management in terms of national security interests.
To me the best forum to revive these talks would be in the World Trade Organization. The notion of global trade has evolved gigantically since the GATT in the post-war era. Handling issues of global payments and investments is ripe for a serious assessment and global governance.
 The WTO has proven itself in the adoption of a wide range of detailed rules-based agreements and the development of a remarkable dispute resolution system. It is about time that the global trdaing system moves forward to address these newer issues of this decade.

About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (Schar School of Public Policy).
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