22 April 2014

DC Concerts: April to June 2014

Everyone asks me how I keep with upcoming concerts in DC. The answer is simple: scour the websites of reliable venues; know good folks who send invitations to house shows; and pick up the paper every week. Since I go to all that trouble, I will gladly share the spoils with you in the form of a regularly-updated list.

EDIT: This list has expired. I will be next updating the list in August or September. ]

13 March 2014

A Case to Keep Investor-State Dispute Settlement in U.S. FTAs

Daniel J. Ikenson of the Cato Institute recently offered a piece on why investor-state disputes ettlement (ISDS) should be scrapped in U.S. free trade agreements (FTAs). Mr. Ikenson argues that ISDS is unnecessary; hard to negotiate; “socializes” FDI risks and thereby encourages unnecessary outsourcing; gives foreign companies a special benefit in the U.S.; exposes U.S. laws to challenges; engenders creative lawyering; and gives ammunition to the anti-trade contingent. 

These arguments have routinely been offered by ISDS opponents over the last twenty years, and they are predicated largely on our experience with the North-American Free Trade Agreement (NAFTA). In my mind, NAFTA was the first trial run for an ISDS mechanism that truly mattered. It was not perfect: it initially lacked transparency and still retains some flaws that encourage the creative lawyering that Mr. Ikenson laments. Nevertheless, ISDS has been improved in subsequent U.S. FTAs and bilateral investment treaties (BITs).

Though Mr. Ikenson does not mention NAFTA in his piece, he nevertheless misses three key points that show why ISDS is a necessary support mechanism for U.S. trade and investment abroad: 
  1. investment disputes do not go well without ISDS;
  2. socializing market risk is an established part of U.S. trade policy; and
  3. ISDS offers powerful incentives for foreign governments to avoid abuse.
In this response, I will briefly discuss each point, referencing my past U.S. government experience working on outward investment policy and individual investment disputes.


(1) Investment disputes do not go well without ISDS.
Investor-state disputes often arise due to political changes and pressures in the host country. When resources are scarce, governments may be tempted to view foreign direct investors as targets: investors often have good facilities, cutting-edge technology, and deep pockets. When political tensions are high, foreign investors may look like easy scapegoats or appetizing sources for rent-seeking behavior. Investors are often large multi-national companies often have big assets elsewhere; they might be inclined to write-off a loss in one host country without too much heartburn.

Without ISDS, investment disputes are fed into the judicial system of the host country. Investors do not stand a chance in places where courts can be manipulated by the government. They will face years of stalling and dismissals while the government tries to wait them out. In places with fair courts, the government probably would not have bothered foreign investors in the first place.

With the U.S. government, I monitored a dozen investor-state disputes that dragged across the years in absence of ISDS. (See Note A below) The U.S. companies involved had contracts that had been breached, or land that had been stolen. They endured targeted power cuts or harassment by police. Since they did not have access to ISDS, they turned to local courts only to face a barrage of unconscionable delays and unfair judgments. Occasionally they would turn to the U.S. government for help, but U.S. government arguments did not seem to resonate. These companies turned into cautionary tales for other investors, who might avoid the same fate by not venturing into risky markets.


(2) Socializing market risk and enabling outward FDI as U.S. trade policy.
Foreign investors are often on the wrong end of illegal expropriation, harassment, and other poor treatment. These are indeed market risks, as Mr. Ikenson points out, but mitigating or “socializing” them is a key element in U.S. overall trade policy. The Overseas Private Investment Company (OPIC), the Export-Import Bank (Ex-Im Bank), and other programs exist precisely to enable U.S. foreign direct investment to flow to risky places.  

OPIC and Ex-Im Bank provide loan guarantees, risk insurance, and direct loans to U.S. companies. The companies pay appropriate fees and, in turn, they get the support they need to do business in risky places. OPIC and Ex-Im are self-financing: they cover their operating costs and often turn a profit. More importantly, they allow U.S. companies of all sizes to stay competitive when doing business abroad. Without them—and without ISDS—U.S. investors would lose opportunities to foreign state-owned enterprises and subsidized national champions that can afford take risks in a non-level playing field.

U.S. investors already lose opportunities because politics around outsourcing constrains the effectiveness of government advocacy. U.S. outward FDI is often designed to increase exports rather than to outsource: almost half of U.S. exports go to foreign affiliates. U.S. companies often want a presence on the ground because it helps them to expand into new markets or to grow their foreign market share. Nevertheless, outsourcing is real and it is an easy scapegoat for the uneasiness that accompanies life in a globalized economy. Arguments about outsourcing overshadow the benefits of outward FDI, so U.S. policies have to tiptoe around the issue. (See Note B below)


(3) ISDS offers powerful incentives to avoid abuse.
Without ISDS, U.S. outward investors often ask the U.S. government to apply diplomatic pressure in investment disputes. The U.S. government, however, rightfully does not hold hostage larger policy interests toward the host country in the face of one company's private interests. This leaves inadequate tools to convince the host country to right the ship.

With the U.S. government, we had standard points for these situations. We discussed the harmful effects of such disputes on overall FDI attractiveness. We suggested that countries were only harming themselves when they breached contracts, unfairly expropriated assets, or otherwise injured investors. We waved the State Department’s Investment Climate Statements and told them that investment disputes mattered. The points rarely worked.

Arguments like this are ineffective in the face of political imperatives. The benefits of inward FDI are realized in the long-term, and governments may not be terribly interested in the long-term foreign investment climate. Instead, they may be facing political problems that make the short-term domestic audience more important. Moreover, if the past few years of assorted global revolutions have taught us anything, it should be that political situations in countries change rapidly. Misguided, harried, or corrupt leadership can in a month reverse years of stability and good investor relations; governments may not think twice before violating a contract—unless there is ISDS.

ISDS gives governments a reason to care about foreign investment even when short-termism strikes. ISDS allows investors to seek recourse in a neutral space; investment disputes need not languish for years in local courts and amid boilerplate official letters. Instead, governments are more likely to face the music and may end up paying expensive judgments if they are indeed in the wrong. Most importantly, under ISDS governments know they could be liable, so they are less likely to abuse investors in the first place. 


Conclusion
The benefits of inward FDI to host countries are the carrot while ISDS is the stick. Both are necessary to give governments the right incentives to develop good investment climates. When government officials face short-term pressures, foreign investors may be easy targets—unless ISDS is there to offer real repercussions for abuse. Without ISDS, investment disputes go poorly. With ISDS, they may never happen at all.

By contributing to better and safer investment climates abroad, the United States is not diluting its brand, as Mr. Ikenson asserts. (See Note C below) Instead, it is responding to the reality of globalization. The United States negotiates high-standard FTAs because good economic climates with low corruption, rule of law, and sensible regulations are places where U.S. companies can excel.

ISDS encourages stable investment climates, and thus enables U.S. companies to invest and trade abroad with greater confidence. U.S. companies need this confidence boost—along with the tools provided by OPIC and Ex-Im Bank—to stay competitive. Mitigating investment and trade risk yields more exports abroad and more jobs at home. 

Is ISDS hard to negotiate? Yes, but it is also an essential component of high-standard U.S. trade agreements and should not be scrapped.


Notes:
(A) The U.S. government has limited ability to get involved with investment disputes if there is an FTA or a BIT in place that contains ISDS. Thus, the disputes on which companies are seeking U.S. government assistance are predominantly in places with no BIT or FTA or with an older agreement that lacks ISDS.

(B)  Korea and Japan have government organizations that promote outward investment along with exports. In the United States, President Obama’s National Export Initiative has eagerly promoted inward investment through SelectUSA but has remained utterly silent on outward FDI. 

(C) The United States is slipping as an FDI destination due to not only the rise of emerging markets but also due to its own failings: crumbling infrastructure, an aging transport system, poor schools, falling disposable incomes, and rising political risk.

10 February 2014

DC Concerts: February-March 2014

Everyone asks me how I keep with upcoming concerts in DC. The answer is simple: scour the websites of reliable venues; know good folks who send invitations to house shows; and pick up the paper every week. Since I go to all that trouble, I will gladly share the spoils with you in the form of a regularly-updated list.

EDIT: This list has expired. Please click here for the latest list. ]

25 November 2013

DC Concerts: Dec. 2013 / Jan. 2014

Everyone asks me how I keep with upcoming concerts in DC. The answer is simple: scour the websites of reliable venues; know good folks who send invitations to house shows; and pick up the paper every week. Since I go to all that trouble, I will gladly share the spoils with you in the form of a regularly-updated list.

EDIT: This list has expired. Please click here for the latest list. ]

05 November 2013

DC Concerts: November 2013

Everyone asks me how I keep with upcoming concerts in DC. The answer is simple: scour the websites of reliable venues; know good folks who send invitations to house shows; and pick up the paper every week. Since I go to all that trouble, I will gladly share the spoils with you in the form of a regularly updated list.

[ EDIT: This list has expired. Please click here for the latest list. ]

19 September 2013

Take My Advice: Five Principles for Your Job Search

The Internet is full of advice on how to find a job in a professional field. So are your friends, colleagues, and career counselors. All of that advice all boils down to this: 
  • figure out what work you want to be doing and can reasonably achieve;
  • target specific organizations in your field; 
  • build a network of professional contacts through informational interviews; and
  • get those contacts to push your resume when/before job openings arise.

Simple. Effective. Also, difficult. Slow. Frustrating. Makes you want a magic button to press to make it happen now. Makes you scour the Internet for that magic button. 

I will save you the trouble: there is no magic button. From 6 months in the job search trenches, I have learned that much. I proffer instead 5 basic principles for a sane and successful job search.


1. Get something current on your resume. Now.
No one will talk you if your plate is empty. Employers think you are a pariah if there is a blank space for your current position. When I returned to Washington, D.C., in March 2013, I already had a gap in my resume. I almost never got to explain this gap until I got something to fill it (with a part-time opportunity in my field that started in July). After that, responses to my resume were more enthusiastic and my interviews were more successful. 
Even if you are waiting tables or waiting out a big life event, volunteer or consult part-time in your field (or on the edges of it). You will be more desirable if you seem already desirable.

2. Build a deep network.
Advertisements will not get you a jobs; people will. Start your network with people you know and people who have reason to think you are generally competent: friends, colleagues, family, neighbors, and fellow alumni from your school(s). Ask around. Do not be shy. Go to networking events if that works for you. Hold informational interviews and always close by asking for 2-3 further contacts in the field. 
I returned to Washington with a strong existing network of friends and alumni, which I built out through 60+ informational interviews. My networking yielded contacts at the organizations at which I wanted to work; they were glad to push for me at the right moment.

3. Brush off the failures.
When teenage me asked for advice on dating, someone wise told him that you need to fail nine times to succeed on the tenth. Exponentialize that for a job search during a recession: you need to fail 99 times to succeed on the 100th time. I applied for roughly 30 positions before I started getting results. Be persistent, even in the face of the barrage of failure. Channel your frustrations into something constructive like an artistic, athletic, or intellectual pursuit. For the record, I wrote songs.
Nevertheless, do not be a dog chasing cars. Do not apply for jobs you that would make you miserable. You will need your strength to battle for positions you care about. 

4. Brush off the platitudes.
People who like you will often pile on the encouragement about your job search. They mean well when they say you will find something soon. They are genuine when they say with your experience you should not have any problems. Being built up, however, also means you may feel worse when your search gets long and complicated. When the ego-boosting is done, shrug off the pleasantries just as you do with the setbacks. Thank your friends and colleagues regardless. They mean well.

5. Do not get lost in online advice.
Job search blogs and career advice websites love to point out tips and tricks for achieving success. Spending hours trying to process these work-arounds, clever wordings, and self-help strategies will do only one thing: make you miserable -- because your existing, un-wily approach-to-date therefore must explain your failure to date. 
Yes, your cover letter may need some editing, but ask a person, not a website. Friends, family, and career counselors can give feedback that balances the "you can do better" with the "you are already doing well".

21 August 2013

What Do You Do?

I hear it immediately: the hesitation.

The eternal Washington, D.C., question hangs in the thick, swampy summer air like a funhouse specter: "what do you do?" The specter follows the underemployed from networking events to backyard barbecues, from baseball games to Saturday nights-on-the-town. It contaminates the water supply, slips through the useless charcoal filter on the overpriced pitcher, and permeates the bodies of all who travel in certain circles. If you stick around long enough, if you do what you do, you parrot it back in perma-loop, second only to "hello" as the interpersonal greeting of choice.

You are intended to have your response/defense ready for the quick draw: I do something important. I make policy. I break policy. I serve drinks but I intern at somewhere special. I am a student. I have started my own business. I rule a small island nation.

Unemployment and underemployment pull back your sharp-edged words and your confidence. They put you in a conversational de-militarized zone. Off limits.

You are not allowed to be looking or uncertain. Not from a place of weakness. If you are -- which we all are at all times in this town, unless we have submitted to stagnation or retirement -- you are not encouraged to admit this to anyone but close friends. D.C. places a palpable stigma on the professionally undead, for they are known to want. They hunger for job leads, contacts, help, insider info, something, anything, please. They email regularly to tell you they still exist.

So what do I do? I reconsider my career path. I rely heavily on my support network. I write new songs. I visit the museums. I bicycle to Rockville, or to Falls Church, or simply through the National Mall at night. I consider moving to another city. I have lunch with my mother and grandmother. I fantasize about an end to the hesitation. I attend free concerts and outdoor film showings. I interview for jobs. I network extensively. I grab the $5 tickets to the baseball game. I invent new, creative cocktails in my kitchen. This is my life, and I am living it.

I feel it immediately: the hesitation. The desperation. The embarrassment. The scramble to justify existence for this networking event, this backyard barbecue, this over-loud bar, this self-important city.

"I am figuring out what comes next," I offer meekly. "So, what do you do?"