Global Commons

Experts in this Region

Esther Brimmer
Esther Brimmer

James H. Binger Senior Fellow in Global Governance

Matthew P. Goodman
Matthew P. Goodman

Distinguished Fellow and Director of the Greenberg Center for Geoeconomic Studies

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    Academic Webinar: Governing the Global Commons
    Esther Brimmer, James H. Binger senior fellow in global governance at CFR, leads the conversation on governing the global commons. FASKIANOS: Welcome to today’s session of the Winter/Spring 2024 CFR Academic Webinar Series. I’m Irina Faskianos, vice president of the National Program and Outreach here at CFR. Thank you for joining us. Today’s discussion is on the record and the video and transcript will be available on our website,, if you would like to share the materials with your colleagues or classmates. As always, CFR takes no institutional positions on matters of policy. We’re delighted to have Esther Brimmer with us today to talk about governing the global commons. Dr. Brimmer is the James H. Binger senior fellow in global governance at CFR. Prior to joining CFR, she was the executive director and CEO of NAFSA: Association of International Educators. She has served in the U.S. government as assistant secretary of state for international organization affairs, and on the policy planning staff. And she has published numerous articles, edited eight books on transatlantic relations, and is writing a book on the need for better governance mechanisms to manage expanding human activities in outer space. So, Esther, thanks very much for being with us today. I thought we could begin by you defining what the global commons are and explaining why they are important in current international relations. BRIMMER: Thank you. Thank you so much. I’m delighted to join you and our participants from around the country and around the world today to talk about governance of the global commons. I’ll share a few opening reflections to respond to your question. And I look forward to our discussion. I will argue that, first and foremost, that the need to manage the global commons has actually helped create our field of international relations, going back at least several centuries to Hugo Grotius and Mare Liberum, the famous book on the law of the sea and 1609. These are not new issues to international affairs, but they are some fundamentally exciting things going on. And it’s exciting to be talking about them now, because we’re in an important period of change. So, when we think about the global commons, these are areas beyond national jurisdiction. And I will argue that they are largely held by all of us. But the opposite view is that they’re held by none of us. And you’ll see in my comments that these different conceptions of the commons are woven through our understanding of the commons. The sorts of places I’ll talk about today include the oceans, polar areas—both Arctic and Antarctica—outer space, and what we’re also seeing now is thinking about areas like cyberspace and the atmosphere, and hence climate change, as also being, in a sense, a new way of thinking about commons. So there are a variety of areas where the issues and topics related to the comments are present. So, why do they matter now? I will argue that managing the global comments will be a crucial component shaping the evolution of the global order in the coming decade. Global commons, such as the oceans, the atmosphere, and space, and areas beyond national jurisdiction that belong to everyone, are subject of renewed great-power competition and technology-driven commercial activity. Traditional geographical commons are complemented by what I would call the human-made digital comments, such as cyberspace. What rules are and who enforces them undergirds global order. In the twenty-first century, technological change and great-power competition are reopening fundamental questions. And indeed, the commons have been part of international relations and international relations theory. We can think about the important phrase, “the tragedy of the commons,” and the concern of overuse of our commons, making them no longer available for others and for all of us. It’s been one important issue in international relations. Another strategic thought has been the importance of command of the commons, maintain strategic dominance in land, sea and air. And there’s an important body of work in that area. And I will argue that the new objective should be to safeguard the global commons. The global commons are especially important in world affairs today. Let’s think about the modern economy and national security. Global economic ties depend on the commons. For example, transportation and navigation are absolutely crucial. The vast majority of trade, over 80 percent of trade, moves—of goods trade—moves by sea. When there are blockages in transportation, they’re immediately in the headlines. Just think about the Black Sea and the spillover of the war in Ukraine. Think about current issues in the Red Sea, gives you a sense of the importance of global commons issues. I will add that we’re also seeing new technology, for example, greater access to space, which means that the management of space is important, and is an aspect of the commons. After all, information from satellites are crucial for navigation, communications, weather prediction, and so many other areas. So, as I indicated, we’re seeing return of competition in the commons, whether it is the South China Sea or the East China Sea, space, and cyberspace. And indeed, climate change is altering also our relationship with the commons. Our shared spaces, our interconnected environment are all part of our thinking in this area. The melting of sea ice in the Arctic obviously changes, again, the relationship with the Arctic, the greater interest in navigation in that area because the ocean is open a bit longer than it has been previously. Issues such as carbon emissions into the atmosphere can also key on how we think about the commons. And even how we think about the oceans, whether we continue to use the “S” in oceans, or if we recognize that they are actually part of one ocean. So, these are the types of bodies we’re thinking of, areas beyond national jurisdiction. Let’s take a moment and look at the structures of governance that we have for the commons. Now, in one scenario that you had for much of human existence, there was no governance, no system. Different countries were doing different things. But I would say that we also have—you can have parallel governance systems. For example, national systems for managing certain types of shared spaces. For example, if you think about a medical certification, just as an example, that’s done nationally, so that if you earn your medical degree in one country you have to requalify in another. That’s national. Though it’s different for veterinarians, I would note. You can have competing systems. You could have competing governance systems, where different sets of states set up their own networks to manage a global commons. Or, increasingly what we’ve seen over the past century, is the creation of one system, one structure where you have all countries being part of a system. And so, as I talk about different types of frameworks in the global commons, I’ll note: Is this a single system? And, within that system, is the structure hierarchical or egalitarian? Do all members of that structure have the same rights? Or do different states have different rights? Another would be the membership. Does membership have to be comprehensive or can it be partial for the system to work? Or, in other words, do all states need to belong to a particular global governance mechanism or can it be partial? Let’s take a moment and look at different types of mechanisms. One is oceans. And we can look at both the law of the sea and the Treaty on the Law of the Sea. But we can also look at the newly signed, but not yet ratified, High Seas Treaty, which is a treaty that looks at areas beyond national jurisdiction. And that’s part of new efforts to manage the seas. We can talk about the role of other governance mechanisms of oceans, whether it’s maritime commerce through the International Maritime Organization or, if we look—think of within the oceans, managing fishing, or managing conservation, or even looking at the seabed. Different parts of the ocean are on—and there are different discussions about managing these areas. So it’s one set of issues. Others we could talk about in our conversation today include the polar regions. The Arctic, and the Arctic states, and changes we’re seeing in the Arctic both for environmental reasons but political ones as well, such as the flow—or, the spillover of the implications of Russia’s invasion of Ukraine has affected the Arctic, the Arctic mechanisms, and also the expansion of NATO in the Arctic area. So, we can talk about changes in the Arctic area. We can also talk about changes in Antarctica, which is governed by the Antarctic Treaty System, which is, I would argue, hierarchical. There are consulting states that are directly involved in the decision making, and others that have acceded to the treaty and are not consulting states. So we can talk about Antarctica. We could also talk about aviation and aerospace. Now, aviation is probably the best example of a single system for managing global space. In this case, if we look at the modern civil aviation system, which was created by the 1944 Chicago Civil Aviation Conference, that’s one unified system. And we can talk about that structure. All countries participate. We all agree that everybody needs to be part of it to have a safe civil aviation system. And there is an international organization, the International Civil Aviation Organization, which is a United Nations agency, that manages this system. And all states belong and have a role. One of the areas where we need to look more closely will be outer space. And I’m arguing—and why I’m interested in a writing book in this area—is that we need to look at how we will manage low Earth orbit, where we have increasing commercial activity, and ultimately how we will manage the Moon. Just since we started talking about these issues, you and I, even planning for this event, two countries have landed successfully on the Moon as well. So, a lot’s going out there. So I’ll pause there. But what I wanted to introduce was the idea of the global commons, that there’s several different types of commons, that there’s several different regimes managing those commons. Some of those regimes are egalitarian, with all members having the same rights. Others are hierarchical. Some of them are universal regimes and only work if they’re universal. Others are partial. So, we can, again, look at those different types of global commons and look at the different types of mechanisms we have for managing them. But I’ll say, one of the reasons to look at this is that there’ll be important decisions made in these global commons in the next five to ten years, which will have implications for decades. FASKIANOS: Fantastic. Thank you, Esther. So we’re going to go to all of you now to ask your questions. (Gives queuing instructions.) And do not be shy. And I see we already have hands up, which is great. I’m going to go first to Chad DeWaard. Chad, you need to unmute yourself. Q: Unmute? All right, hello. FASKIANOS: Daro, we’ll come to you next. So, let’s start with Chad. Q: All right. Hi. So I’m with Culver-Stockton College. I’m part of Chad DeWaard’s class that he has on the screen. My question: Earlier in the presentation you mentioned cyberspace. I was wondering if you could go into more detail about that. BRIMMER: Yes, indeed. Oh, one of the things, or the idea I want to share with you, is that when we think about cyberspace, we can also think about it as having aspects of being a global commons. Because, of course, cyberspace space rests on the electromagnetic spectrum, which exists. I mean, that is not a human creation. There is, in a sense, that—so that we’ve created a system that sits on natural phenomena. And then the question is, how do we both set rules for operating within cyberspace? And one of the interesting transitions is you could argue—and indeed my colleagues here at the Council on Foreign Relations have done an interesting report looking at the fracturing of cyberspace—you could argue that the many the noble, original attempts to create—to facilitate movement of information and participation by all peoples in cyberspace is becoming increasingly limited as national governments choose to create certain barriers between the flow of information. Some of those are for safety. Some of those are for other reasons. And so that—I include it because it is also an area of human interaction that’s actually based on a natural phenomenon where there will be rules—I’m sorry, where there could be rules. And that one of the current debates now is in the management of cyberspace, which will also affect other commons. So, one of the interesting issues you start looking at is how will communications with space activities need to be adjusted or updated as we continue space exploration? So, there are intersections between the commons as well. And I want to be sure that—historically, obviously, we focused on the physical commons, such as the oceans. And I think that it’s important that we think about these other areas which are similar, have some of the similar dynamics between even some of the same governments, even some of the same people in the governments who would be—would be involved in these issues. So, for example, take the International Telecommunications Union. Again, a global entity, part of the United Nations system, which both allocates radio frequencies, but they also allocate, in effect, satellites slots, because in order to transmit back from Earth orbit—back onto Earth, obviously it needs to be part of our overall telecommunication system. So, there are intersections between these areas and, for example, between cyberspace and the other global commons. FASKIANOS: Thank you. I’m going to go next to Daro Wade. Q: Hello. FASKIANOS: Yes. Q: Hi. My name is Daro Wade. I’m currently majoring in international relations. Thank you so much for having me. FASKIANOS: And Daro, where are you majoring at? What college? Q: Buffalo State University. FASKIANOS: Wonderful. Thank you. Q: Thank you so much. I have a question. I don’t think if I—if it’s a good question anyway, but I wanted to ask about what’s the difference between cyberspace and space? Like, is there a difference? I don’t know. BRIMMER: Well, you know, that’s actually a really interesting question. A really philosophical question. So, there is a technical answer. And I will focus on the technical answer. But I want to acknowledge that’s actually a really interesting sort of philosophical question about how we choose to divide up different phenomenon. Because, indeed, as your question indicates, there are phenomenon that are part of our life on Earth, that are also part of life off—a part of existence off of Earth. And so that’s a really interesting question. I will say that the way we’ve politically chosen to divide that up is that we separate out the—both airspace and space beyond that physically, so that when we think about space, we’ve actually divided up into both the national airspace above us, up to 60,000 feet mean sea level. We then think about low Earth orbit, all the way up to geostationary Earth orbit. And so, we’ve created—we’ve agreed on certain altitudes, so to speak, where certain operations can occur. So, we’ve divided that up in terms of how we operate those areas. So, for example, low Earth orbit is where the International Space Station exists, where you’re seeing, you know, different satellites being placed to support communications on Earth. But, as you indicate, that the spectrum exists in multiple places. So, right, we’ve, as human beings, chosen politically to divide up what is actually a larger continuum. I think that’s really interesting. A really interesting question. And another one that I think—that I think relates to that is a similar question of how do we divide things. If you think of how we tend to write about oceans, we will talk about, you know, the North Atlantic or the South Pacific. But, of course, it’s one ocean. I mean it’s all connected. You know, and sometimes we have to recognize that when we’re thinking, let’s say, about currents and flows. So I just remember, it’s always a good question. And your question actually raises really interesting philosophical as well as political issues. Thank you for the question. Q: No problem. Thank you. FASKIANOS: Wonderful. And there is a hello to you, Esther, from Pomona College. So, somebody from Pomona is going to have to ask a question live. BRIMMER: Thank you. Thank you. That’s my alma mater—(laughs)—so thank you. Thank you. And there’s a nice—there’s an observatory at Pomona, yes. (Laughs.) FASKIANOS: Excellent. So, I’m going to go next to a written question from Fordham IPED Program. There is an upvote, so I’m taking that next. As climate change—and it’s coming from Genevieve Connell: As climate change and non-point source pollution continues to damage our freshwater systems, and given that a large portion of the freshwater is stored in the polar icecaps, are the polar regions truly considered global commons, when countries such as Canada, the Nordic countries, the United States, and Russia have stronger military defense and strategies in the Arctic polar regions? BRIMMER: Well, thank you for the question. So let’s sort of—a terrible pun would be to dive into this question—because, indeed, although I don’t have a map in front of me, you can imagine that, of course, as you know, the Arctic is an ocean surrounded by land. So that, indeed, there are eight countries with territory above the Arctic Circle, which is about sixty-six degrees and thirty-four minutes north. And so that those countries do have their own territorial waters. They, of course, have their 200-mile exclusive economic zones. And you will see, there was a recent news—a story in the news about a declaration by the United States about its extended continental shelf. And we can get into that at length. But, indeed, much of the Arctic, important parts of the Arctic, are actually covered by territorial zones. That said, importantly, there is high seas, areas beyond national jurisdiction, at the center. The center of the Arctic Ocean is part of the high seas. And, indeed, there are areas even when you look at the Bering Strait, which is the area between the Russian Federation in the United States—you think where Alaska and Russia, it’s about—at the narrowest point, it’s about fifty-one miles across. But even within that, there is open ocean to allow navigation so that you can—any country can sail up through the, through the straits between the—between the United States and the Russian Federation, because, again, that is part of the high seas. So, that’s my way of saying that much of the governance of the Arctic does fall into these areas of national jurisdiction, but importantly, there is high seas in the center. And there are agreements about fishing in those areas and, at this point, trying to manage some of the fishing issues in that area, so that it’s important that there is there is still high seas within that. Now, the big question that you raised, of course, is that as we see what happens in the Arctic, that both the melting of the sea ice—and the way it melts in the summer, of course, has changed as the whole environment is getting warmer. And, of course, the Arctic is warming much faster than the rest of the globe. Some experts say two times, some say three times, some say four times faster than the rest of the globe. Making the impact of climate change dramatic in the Arctic. FASKIANOS: Thank you. I’m going to go next to Wilson Wameyo, with a raised hand. If you could unmute yourself and tell us where you’re calling from. Q: Hello. Good evening. This is Wilson. I’m calling from Krakow, Poland, from Jagiellonian University. I’m studying a master’s in international security and development. I want to thank our guest. And I will have a question because I read one of your documents on The Hill, which talks about exploration in space. And the question is, what is the interest which is drawing right now, like, great powers to the Moon—going to the Moon? Is it just the interest that was there in the 1960s? Or it’s a new interest? Maybe some minerals or something? Because I read your articles, but I didn’t get exactly what is drawing, like, new powers there. Because I know India landed there, but there is also plans for Russia and China to go there. Thank you. BRIMMER: Thank you for your question. And, indeed, there are both longstanding and new reasons to look at the Moon. So one, indeed, as our closest and original natural satellite that, of course, gazing at the Moon and thinking about learning more about the Moon has been part of much—of many societies for, you know, millennia.  But what’s particularly interesting now is we’re seeing that one area of interest is, are there commercial uses? So, some people would like to see, could we have a permanent or rotating settlement there that then supports other activities in space? So what do we need to learn about long-term human activities possibly on the Moon? Could those, for example, support then further explorations onto Mars? And that is one area of interest. Another is there are those who are interested in the possibility of accessing minerals in space. Some asteroids, for example, have critical minerals that might be very valuable, back in space. And this is one case, for example, as we look at the green transition, that there are minerals that are useful for electronic vehicles that—some of which are—and some of those minerals are at the bottom of the ocean. Some people think they are—it’s better to go out to space to look for the same minerals. And the question is, which remote place might we go to, to try to look for such minerals? So, there are those who are interested in minerals. There are those who are interested in scientific exploration, which has been one of the fundamental interests for years as well. What are the particularly dramatic pushes? There’s also great-power competition. But both the United States and China have important space programs. And one of the questions will be, will those be competitive, cooperative, or something in between? I think that’s one of the big—one of the big political questions in space. But then also, to say more specifically, there’s some intriguing issues. So, for example, that previous landings—first, by India and us, noticed that there is water on the Moon. It’s frozen as ice, but there’s a question of could that be used if people were to set up, let’s say, scientific stations on the Moon? So there’s, as I say, a mix of commercial, political, scientific reasons for going back to the Moon. As you know, the United States was the first to—and only country so far—to land people on the Moon and bring them back again. There is—there are plans to return people to the Moon. Other countries have successfully landed equipment devices, rovers and others, to do exploration on the Moon. Of course, originally, the Soviet Union, now it’s the Russian Federation, which was the Soviet Union, China, and then just in the past year, India, and Japan. FASKIANOS: Thank you. I’m going to go next to Gavin Rolle, with the raised hand. Q: Hi. My name is Gavin Rolle. Sorry if it’s a little—it’s a little loud where I am. I’m a senior honors international business major at Howard University. And my question is: Could you talk—I guess it’s not really a question—but could you talk a little bit more about the effects of how the commons are governed on international trade? BRIMMER: Indeed. So, let’s look at the governance and to what extent governance can help facilitate trade. Let’s take an example of the Arctic. We were speaking earlier about the Arctic, and melting, and some of the environmental effects. And, indeed, out because of—that there is a greater degree of melting during the summer, that some—there’s been some interest in the opportunities for cargo transport through the Arctic. Now, half of the Arctic is in the Russian Federation. And so the other part that goes through the Russian Federation is the northern sea route. The other part goes across North America, including the and United States and Canada. And so—and both those have very different geological conditions. But that said, the main issue here is that there are cargo companies that are interested in moving goods—to extending their ability to move goods through the Arctic. However, even if there’s greater melting, that actually still means it’s extremely difficult to navigate in the Arctic. And there’s still very harsh conditions. And partially melted ice is still an issue. Therefore, it’s important to try to have some standards for how ships that go through the Arctic should need to be constructed and managed. Because, again, you want to reduce the chance, first, of mishap, loss of life, environmental degradation, and other things. So, the governance issue that’s relevant is the International Maritime Organization. Now this organization, as the name suggests, works with shippers worldwide. The International Maritime Organization (IMO) has created something which is called the polar code. It has a longer name, but I will call it—it’s called for short the polar code, which are standards for certain types of ships going through the Arctic. And so that is one of the ways where governance can try to help improve and coordinate how people are operating within the Arctic. And national governments are part of the International Maritime Organization. Again, it’s a United Nations agency. All the countries that are in the Arctic are members also the International Maritime Organization. And indeed, the IMO just last year updated some of its standards to apply to smaller and different types of ships, recognizing that more vessels are going through the Arctic. Now it will be harder for—while any one country could try to set rules for movement through its own oceans, that if a ship is going through the high seas portion you want it to be operating to the highest standards. And the governance provided by the International Maritime Organization is one of the aspects that can assist in that type of activity. Q: Thank you. FASKIANOS: Thank you. I’m going to take the next question from Nicole Rudolph, who is an assistant professor at Adelphi University: Considering the increasing involvement of private companies in space exploration and commercial ventures, how should international governance frameworks adapt to ensure responsible and equitable management of outer space resources and activities? BRIMMER: Oh, thank you! That is the question of the hour. That is, indeed—as we look at—the burning question in global governance, that is that one. Because, indeed, as you indicate, we now have private companies that are an important part of the space economy. We have a space economy. Indeed, when you think about that, of course, through much of the twentieth century, space exploration was conducted by national governments. And what we see now, we have private companies that are able to provide certain services related to space exploration. So, for example, the most visible ones, of course, are the launch companies, that are able to launch satellites into space. And that there are, what, over seventy countries with some assets in space. And sometimes those have gone up with launch vehicles of national governments, sometimes they’ve gone up with launch vehicles of private companies. There are, of course, extraordinary companies that have had important innovations. Probably the best-known is SpaceX, Elon Musk’s company, who, as an example, has developed the ability to reuse its assets, thereby bringing down the cost of launch. So, the question is how to set standards and improve the existing standards. So, for example, if you—under the Outer Space Treaty and related treaties, that the national government is responsible for what is launched from its territory. So, if SpaceX is going to launch one of its rockets from the United States, that it, of course, works with United States, and United States is supposed to inform the UN Office of Outer Space first that it’s going to have so many launches in this period of time. So national governments are supposed to be the ones who report on this. That said, there’s a real question of to what extent national governments will be—are able to monitor and regulate the companies that are—want to launch from their—from their territories. So that’s a really—very much a live question. And then, how you—how you do—other assets that are sent into space is very much a live question. And so that there are some who think that you can set certain standards that states will voluntarily agree to. So you’ll see what sometimes—there’s, again, a longer name for the agreements on standards of behavior in space, often called the Artemis Accords, which was developed both by the United States and other countries together, which sets standards for operations in space. And different countries have signed up. Last I checked, over thirty countries had signed up, saying that they would follow certain standards with the companies that operated in their territory. But it’s really an open question. And there’s a real concern that some states may create spaces that allow people to launch, but not be able to manage all the aspects of what the private sector is doing. And it’s moving quickly. I mean, it’s moving quickly. If you think about—if you think about just low Earth orbit and the number of satellites that are in space, that’s increasing dramatically—absolutely dramatically. Largely because of SpaceX, but there are other constellations of space vehicles that that will be launched. And that is the current issue that that policymakers are grappling with now, is how to regulate what commercial companies are doing. And here, again—here, I would tie it back to the earlier conversation, that this pattern of phenomena we’re seeing in more than one place. What we’re seeing in space is somewhat similar to what we see in cyberspace, which is where you have, again, dynamic private sector entities that are creating new—have new technological innovations that are fantastic. But governments are grappling with how to regulate them. And so it’s a different situation, but the issues are the same. And some of the same institutions get involved with both. I mean, as I mentioned, the International Telecommunications being one that’s having to do with both. Department of Commerce in the United States is another one that’s having to deal with both. FASKIANOS: Just to continue on this, Esther, you know, there have been reports about tech companies putting their data centers on barrages and maybe even up in space, so that they’re not being regulated or having to be regulated by governments. Can you talk a little bit about that phenomenon that seems to be taking place? And how—can they be regulated? Can this be, you know, dealt with? BRIMMER: An excellent, excellent question. Is that one—indeed, I would say that we would need to look—we should be looking for ways to regulate that. And that then the question is, what tools are available to governments on the ground to be able to do that? And what rules can be set? Would you need buy-in from everybody to not have loopholes? And I think there’s a real concern that, yes, the technology is well ahead of the regulatory framework. And I’m at the moment somewhat pessimistic that it’s going to catch up fast enough. And I’ll just say here, it’s not that I think that governments have to do everything. But I do think you need rules. And that all for the long term—at the beginning, I talked about, quote, “the tragedy of the commons,” and they do need rules so that the actions of a few don’t spoil the use of the space by everybody else. And so, these are the things that I do—that we do worry about. And I don’t immediately see a good solution. But I think that—I think part of it is making the point that we actually do need rules. And that’s actually beneficial to—especially to the responsible players in any field. FASKIANOS: Thank you. Going next to Clemente Abrokwaa. Q: Hi. My name is Clemente Abrokwaa. And I’m at Penn State University in the African Studies Department. And this is going to be just two questions here. Short ones, don’t worry. (Laughs.) Now, the first is—might be a rather selfish question, but in terms of the global governance, how much voice would Africa have? And then the second question is, in terms of the global commons, what happens with transnational companies and biodiversity that countries have? How much control will they have in terms of that, when companies go in there? Thanks. BRIMMER: Thank you. Two really good questions. Each one of which could be a topic for a whole session. First, in terms of global governance, one of the reasons to actually try to create a global mechanism, or global agreements for managing global commons, such as space, is that it gives more voice to more states. And so that’s why sometimes large countries aren’t always fans of it. But the idea is that, indeed, that by having, let’s say, the International Telecommunications Union, which allocates frequencies—the use of frequencies for radio and other transmission—is that you have an entity that is trying to make sure that every country has a say, or every country has a vote, or every country is part of the system and therefore—and has also an ability to have access to that global commons. For example, the telecommunications spectrum, which—and we meet regularly to look at how that’s allocated. If there’s no system, and we were just talking a moment ago about activities in space that are, you know, beyond governments. If there’s no system, then countries—then most countries probably won’t be able to control the activities of commercial actors that may affect—may affect them. So, in a sense, and when you’re thinking about sort of global fairness, you want to have a larger system to which everybody belongs. That’s true, I mean, if you think of something like aviation, civil aviation, again, where there’s one system and every country belongs to it. Therefore, the rights of every country in Africa is—over their airspace—is recognized by everybody. Now—and the rules of who flies at what altitudes is then maintained. So, that’s why I think also global governance does have a fairness component. Conversely, it often has a safety component as well. I mean, in multiple ways. Now, I’d be the first one who would say, international organizations are not perfect. (Laughs.) And that you then have to look at good management, or how is expertise being used. I mean, there’s lots of things that have to go into making it function. But part of the principle is that if you think in these shared spaces that are owned by all, then we need a mechanism where we all have some way of expressing a view. Now, looking at the question of transnational companies and biodiversity, indeed, this is where it gets quite interesting, when we look at how will companies behave in places which are either owned by us all or which some people think are owned by none of us. And why things like the High Seas Treaty are quite interesting, because here the High Seas Treaty, which is the treaty that looks at areas beyond national jurisdiction. So sometimes you’ll see BBNJ, these areas that are beyond national jurisdiction. Looking at biodiversity beyond national jurisdiction. And the idea under this treaty is to set up mechanisms to create certain protected spaces of the oceans. It also—we look at things like the International Seabed Authority, which was created under the UN Convention on the Law of Sea, which also has a process for application for uses of assets on the seabed floor. It is supposed to—as you know, there’s a lot of controversy there, but there’s supposed to be a set of rules that’s being created. At this point, there’s a real controversy there because it’s not clear. There are companies that are effectively going to national governments to say: You raise this issue on our behalf, in effect. And so, I would say that it’s imperfect at this point, and that we will have to see what the longer term resolution about the issue with Nauru and The Metals Company, about access to undersea nodules in the Pacific. We will see that, again, a current issue. And it’s not clear that that will actually—how that will actually be resolved. I think that that’s still very much an open question. FASKIANOS: Thank you. I’m going to go next to Ed Webb, who is an associate professor of political science and international studies at Dickinson College: Are there significant efforts underway to manage seabeds outside EEZ, or exclusive economic zones? What prospects are there for a treaty, or possibly a UN agency to manage this important commons? BRIMMER: Thank you for the question. I think one of the interesting areas in this effort is the High Seas Treaty, which is—again, works on biodiversity beyond national jurisdiction. That treaty was under negotiation for years, for years. And there was an important breakthrough last year. Last spring, the treaty was finally concluded. It was then presented to the to the General Assembly, adopted, and open for signature. It will come into force once sixty countries have ratified it. A couple—I think Chile might have been the first one. Someone can correct me if I’m misremembering that. So countries have started to ratify it. The United States did sign the treaty. And one of the questions will be, will it be able to ratify it? The treaty—because it’s designed to cover those areas that are beyond national jurisdiction, it would go some way—some way to address the issues you raise. And particularly, it’s interesting that it helps create mechanisms for creation of marine-protected areas, which could help as a step towards the goal of having thirty by thirty, which is 30 percent of the oceans protected by 2030. And so that’s one effort in the oceans’ community, as you know. That said, multiple countries need to ratify it. It also has a mechanism in terms of how to share some of the benefits of the assets of marine organic material. And so that could be very—so it sets up a new mechanism, which might actually be palatable in ways that the law of the sea was not, to the U.S. So there’s a question of who can ratify it, but it might—that so much work went into, I think, trying to make it possible for countries to ratify it. I think that’s my way of saying I think that will be one to watch in the area that you raise. FASKIANOS: Fantastic. I’m going to go back—people should raise their hand, but I will continue to read questions—to Daro Wade. Q: Hello. I think I had asked my question in the chat, but I’m going to just repeat it. I said: How do international organizations contribute to global governance, particularly in addressing challenges related to the global commons? BRIMMER: So, your question, I answered it but I’ll answer it a little bit differently to expand on that point. So one thing we could think of is international organizations, that there are a wide variety of international organizations. Some of them are global and political. Some are global and economic. Some are regional and political, regional and economic. Some are composed of states. Some are composed of states and other entities. And so that what international organizations allow you to do, it does allow for governments who have legal authority over territory to agree how to handle issues together. International organizations also allow for standard setting. I would suggest that’s one of the things where they excel, is being—providing a way for countries and other entities to create standards, create rules, and enforce them. It also provides a way to give voice. A place for, for example in some cases, for nonstate actors to be able to express a view. Let’s take the Arctic for a moment. So if we take the Arctic, the Arctic has—a particular entity was created in 1996, after the end of the Cold War, called the Arctic Council. And it was—it dealt with both environmental, scientific, and other types of cooperation. It expressly does not deal with military issues. Now, it too has been, in a sense, a victim of Russia’s invasion of Ukraine, which has caused deep divisions amongst the Arctic states. That said, what was interesting about the Arctic Council is that the Arctic Council had now seven, previously eight state members. It also had six permanent participants. The permanent participants were transborder groups of indigenous peoples in the Arctic area. And so that you had voice for people beyond governments, as part of the structure of the Arctic Council. And they continue to connect. And so they worked much more on human wellbeing, human interaction, cultural interaction, and recognize the important ties amongst indigenous peoples that transcend modern international borders. So, it’s a really—that’s a really interesting international organization that that provides, both for scientific cooperation, cooperation on weather and navigation issues, but also on cultural issues. So that’s my way of saying, international organizations can do a variety of things to help with governance in the global commons. FASKIANOS: Thank you. I’m going to take the next question from Mark. I don’t know his affiliation: Managing the global commons in space is becoming more difficult. Negotiations on managing the global commons are frozen between Russia, China’s PPWT, or Prevention of the Placement of Weapons in Outer Space, and the U.S.-EU’s code of conduct in space. The deadlocked nature of the negotiation seems to favor China. Do you agree? And do you have any ideas on how the U.S. should proceed? BRIMMER: Right. OK, let me just give people a little bit of background. As the questioner points out, there are existing negotiations going on within United Nations bodies, but they are deadlocked. So one of the places where this debate has been going on for years is in the Conference on Disarmament. And the Conference on Disarmament has had a variety of structural challenges, both on this and on nuclear weapons issues as well. But for several years, the Russian Federation and China have brought forward a resolution that relates to not placing weapons in space. The U.S. has objected, because it argues that it doesn’t—that the measures don’t talk about ground-based—you know, you can shoot something from the ground up. That will have a military effect. And so, for a variety of reasons that those discussions at the moment, as I say, have been deadlocked for many years. There are also discussions going on in the Committee for the Peaceful Uses of Outer Space, which is a consultive body which is also looking at cooperation in space. So you’re quite right that there are points where you have somewhat—discussions happening in different parts of the UN system. Indeed, you had some of the ideas from, you know, COPUOS, the Committee on the Peaceful Uses of Outer Space, which then the issues then go—can be taken up by the General Assembly. And you did—you have seen important discussions by the General Assembly in this area. You’ve even seen an effort that the U.S. led to put a moratorium on ground-based antisatellite activity. And the U.S. put his own moratorium, and then there was a General Assembly resolution passed, again, which yet the General Assembly does not have the legal authority of the Security Council, but it can show intent and support efforts that states are doing. You also see efforts by states. I mentioned the Artemis Accords that the U.S. and other countries are participating in. So there are various, I don’t want to say ad hoc, but sub-global efforts at trying to create work on space issues. I think it’s probably going to be piecemeal. I would love to say we will be able to solve this with one large global commitment, but no. But I do think that we can put together a series of coherent steps in relevant agencies that support the government better governance within space, and that we can do it together. And I think one of the interesting questions to ask—not likely now, but one of the things that happened after the late 2023 meeting between President Biden and President Xi was a resumption of U.S.-China military-to-military talks. So one question is, could there eventually be an opening on civilian discussion? Are there certain legal restrictions within the U.S. about how and which agencies, and which parts of the U.S. government can talk to China about space issues? That said, that one question is could there be some ways of talking about some very specific practical things? So, for example, one place to start could be space stations. You know, the United States and China both have space stations orbiting in low Earth orbit. Now, all countries are all signatories to the Agreement to Rescue in Space. And so that’s fundamental. That’s goes all the way back to the Law of the Sea, the issues hundreds of years ago was the responsibility to rescue in case of emergency. But at the moment, they’re not structured to do so. I mean, the U.S. and the Russian Federation built this International Space Station with all of its many partners so that they’re interchangeable, so that they could dock with each other. That’s not the case. So how the U.S. and China would interact is not clear. But that is a place to start, to say that whatever the successor is to the International Space Station—there’s a question of what that will look like—at that, a decade from now, two decades from now, you know, there will continue to be at least two sets of International Space Stations conducting scientific activities. We need some—we should be talking to each other about that, certainly, primarily, for the safety aspects. Shared interests in communications, good governance around space. But, you know, managing the commons requires us all eventually to work with other countries in the larger interests of safety and security. FASKIANOS: Thank you. I’m going to take the next question from Ken Bernier, who has a raised hand. Q: Yes. Hi. Thank you so much for offering this seminar today. It’s been so interesting. Thank you so much for that. So, I’ve been doing a lot of research—I’m from Central New Mexico Community College in Albuquerque, New Mexico. I have been doing a lot of research in, you know, the Russian icebreaker fleet, and the new land and sea-based trading routes, the remapping of global trade, the emergence of BRICS-plus. So financially and technically, I keep on hearing we’re behind. And if that is true, can the West catch up? BRIMMER: Well, first, thank you. Thank you for your questions and for the range of topics that you are introduced. And I think we have to then unpack a bit the phrase “the West is behind,” and what does that mean? Indeed, as you say, in media reports we’ll see a lot of sort of alarmist issues. But I think if we then have to say what are we actually looking at? If we look at specifically the question of icebreaking vessels, and that—just for the whole group—that relates to vessels that then are able to transit through the Arctic, opening space for ships behind them. So that most ships would not be able to transit through an icebound area unless an icebreaker, you know, clears the path for them beforehand. There are very different uses of icebreakers. Indeed, the idea that there—that there’ll be different levels of icebreakers is quite clear. The United States does—at the moment, has two functional icebreakers. It originally had three. They’re all well past their due date. They’ve been refurbished. They’re regularly refurbished every year. One of the two is actually used for parts for the other one. And then, of course, there’s—for the main icebreakers. And then of course, there’s the scientific ship, the Healy, which actually support scientific researchers as well. But, indeed, that one of the important issues—one of the things—progress we’ve seen since we did the 2017 Arctic Imperatives Task Force Report for the Council on Foreign Relations, where we and many others called for more icebreakers, we now see icebreaker—funds for icebreakers in the budget for the United States Coast Guard. But one of the many things that happens when you don’t pass a new federal budget is the new money for the out years doesn’t get to be used. And so, if you think about the effects of not being able to have a normal budget process, federal budget process, is some of the funding and related funding gets held up. But so, indeed, I would take your point on icebreakers. I think there needs to be important sustained investment, also a purchase of a commercially available one in the short term. All of that makes sense. And it’s a plan that just needs to be funded and continued in the out years. But that said, that’s a very specific example. Overall, I think, actually, that the United States and the West in general is actually very well-placed to actually succeed in contributing to the management of the commons. And that I think that you’re seeing that on all of these issues, whether it’s space, whether it’s oceans. That the United States has an important role. And when it—when its political system is functioning, allowing it to actually have normal discussions about foreign affairs, it plays a role in trying to defend certain principles, along with many partners and others. So if we think about—I mean, there are many challenges going on in the Middle East, but I’ll say that the issue of trying to manage navigation in the Red Sea, that there were multiple countries who have an interest in that function and who are—and is trying to be part of—either directly part of the coalition that’s trying to sail through the Red Sea, or other areas where you’re trying to maintain freedom of navigation. So I think that it is a period of, I guess I’d say, important political change in many places. I think that as we continue to try to work on global commons, we can try to help national governments, major private sector companies, and others understand that they benefit from a stable international order with good rules. I mean, there’s a phrase that the American poet Robert Frost used to say—you know, good fences make good neighbors. Well, I think good, well-planned regulation makes a good international society. FASKIANOS: Esther, that’s a perfect way to end this webinar. Thank you very much for your insights, analysis, and time. And to all of you, I am sorry that we couldn’t get to the questions. There were too many for the time allotted, so we’ll just have to have you back. And we look forward to reading your book when you finish writing it. And very excited for that to come out. The next Academic Webinar will be on Wednesday, February 28 at 1:00 p.m. Eastern Time. Meghan O’Sullivan, who is the director of the Belfer Center for Science and International Affairs at Harvard University’s Kennedy School, will lead a conversation on energy security. And in the meantime, I encourage you to learn about CFR paid internships for students and fellowships for professors at You can follow us at @CFR_Academic. And do visit,, and for research and analysis on global issues. You can also sign up for various blogs that the fellows contribute to. So with that, we will close. Thank you, again, for joining us. Thank you to Dr. Esther Brimmer. And we look forward to seeing you again on February 28. (END)
  • Global
    Central Bank Currency Swaps Tracker
    Introduction Since the financial crisis of 2007, central banks around the world have entered into a multitude of bilateral currency swap agreements with one another. These agreements allow a central bank in one country to exchange currency, usually its domestic currency, for a certain amount of foreign currency. The recipient central bank can then lend this foreign currency on to its domestic banks, on its own terms and at its own risk. Swaps involving the U.S. Federal Reserve were the most important of all the cross-border policy responses to the financial crisis, helping to alleviate potentially devastating dollar funding problems among non-U.S. banks. Fed swaps again helped to prevent global dollar shortages in early 2020, when the spread of the COVID-19 pandemic plunged the world into deep recession. At the bottom of this page, you can explore the evolution of central bank currency swaps over time, in detail, through an interactive map. The introductory slideshow below will show you, in brief, how these agreements have evolved, year by year, in terms of the central banks and amount of funds involved.   Since the 2007 financial crisis, the swaps have been used by central banks to obtain foreign currency to boost reserves and to lend on to domestic banks and corporations. While the terms of swap agreements are designed to protect both central banks involved in the swap from losses owing to fluctuations in currency values, there is some risk that a central bank will refuse, or be unable, to honor the terms of the agreement. For this reason, lending through currency swaps is a meaningful sign of trust between governments. It can also be a sensitive domestic political issue, however; legislators in the United States, and even public commentators in China, have expressed concerns about the level of risk their respective central banks are taking in extending swap lines to certain nations. How Bilateral Currency Swap Agreements Work At the start of a swap, central bank 1 sells a specified amount of currency A to central bank 2 in exchange for currency B at the prevailing market exchange rate. Central bank 1 agrees to buy back its currency at the same exchange rate on a specified future date. Central bank 1 then uses the currency B it has obtained through the swap to lend on to local banks or corporations. On the specified future date that the swap unwinds and the funds are returned, central bank 1, which requested activation of the swap, pays interest to central bank 2. Developed Economies   During the financial crisis, banks became highly reluctant to lend to one another, owing to fears about the true financial condition of counterparts. This drove up the cost of borrowing, as lenders demanded higher interest rates to compensate for rising counterparty risk. While central banks could provide local currency to their domestic banks to lower the cost of borrowing in that currency, their ability to provide foreign currency was limited by the amount of foreign-currency reserves they held. To address these foreign-currency funding issues, developed-economy central banks agreed to provide swap lines to one another. On December 12, 2007, the Federal Reserve extended swap lines to the European Central Bank (ECB) and Swiss National Bank (SNB). European bank demand for dollars had been pushing up, and creating accentuated volatility in, U.S. dollar interest rates. The swap lines were intended “to address elevated pressures in short-term funding markets,” and to do so without the Fed having to fund foreign banks directly. On September 16, 2008, two days after the collapse of Lehman Brothers, the Federal Reserve Open Market Committee (FOMC) gave the foreign-currency subcommittee the power “to enter into swap agreements with the foreign central banks as needed to address strains in money markets in other jurisdictions.” This enabled the subcommittee to extend swap lines to other central banks and to expand the size of the existing swap lines, without the need for the full FOMC to vote on it. The oral understanding was that the subcommittee would have the authority to extend swap lines to Group of Ten (G10) central banks, but that swaps beyond that group would require approval by the full FOMC. Two days after the subcommittee was granted this power, the Fed expanded the size of the swap lines with the ECB and SNB, and extended three new swap lines, to Canada, the United Kingdom (UK), and Japan. On September 24, 2008, further swap lines were extended to Australia, Denmark, Norway, and Sweden. On October 28, 2008, a swap line was extended to New Zealand. The ECB established swap lines with Sweden in December 2007, the SNB and Denmark in October 2008, and the Bank of England in December 2010. The euro area, Sweden, Denmark, and the UK had relatively low foreign exchange reserves going into the crisis, owing to the costs involved in holding reserves and the belief that there was little likelihood that more would be needed in the foreseeable future. However, banks in these countries borrowed large sums in foreign currencies in the years leading up to the crisis. When it became difficult for them to borrow funds in 2008, they turned to their central banks, reserves of which proved insufficient to meet the unanticipated demand. The ECB swap lines were therefore called into use in 2009 to provide Sweden and Denmark euros with which to top up their foreign exchange reserves, and the swap line with the SNB was called upon to provide the ECB with Swiss francs. The swap line with the Bank of England was put in place as a precautionary measure to ensure that the Central Bank of Ireland, which is part of the Eurosystem, had access to pounds sterling, but it has never been used. Since 2007, Sweden and Denmark have more than doubled their foreign exchange reserves, the UK has doubled its reserves, and the euro area has increased its reserves by 20 percent. In 2011, the Bank of Canada, Bank of England, European Central Bank, Bank of Japan, Federal Reserve, and Swiss National Bank announced that they had established a network of swap lines that would allow any of the central banks to provide liquidity to their respective domestic banks in any of the other central banks’ currencies. In October 2013, they agreed to leave the swap lines in place as a backstop indefinitely. The six central banks again had occasion to draw on their backstop seven years later. By March 2020, the COVID-19 pandemic had pushed the global economy into deep recession, with governments’ public-health orders directing nearly half the world’s population to stay indoors. The cratering economy raised counterparty risk and sent borrowers scrambling for cash, which drove up the cost of lending. Just as during the 2007 crisis, developed-world central banks turned to swap lines to provide their domestic banks with foreign currency. To expand U.S. dollar liquidity, the Federal Reserve, on March 15, cut the interest rate on its outstanding developed-world swap lines to just above zero. The Bank of Canada, Bank of England, European Central Bank, Bank of Japan, and Swiss National Bank also pledged to use their Federal Reserve swap lines to lend U.S. dollars at a maximum maturity of 84 days. Later that month, the Fed extended emergency swap lines to five more developed-country central banks—those of Australia, Denmark, New Zealand, Norway, and Sweden. Australia and Sweden were permitted to draw up to $60 billion; the lines for Denmark, New Zealand, and Norway were capped at $30 billion. Fed officials approved each swap line for six months but, in July 2020, renewed them all until March 2021. The ECB, for its part, extended a new swap line to Denmark. Throughout 2020, most of the Fed’s counterparty central banks—all but those of Canada, New Zealand, and Sweden—drew upon their U.S. dollar swap lines. Japan was by far the largest user, with its outstanding withdrawals peaking at roughly $225 billion. In contrast, the ECB’s developed-country swap lines went unused, owing to the relative calm in global markets for euros. Whereas the Fed’s emergency swap lines of 2020 have expired, it maintains permanent swap lines with the Bank of Canada, the Bank of England, the European Central Bank, the Bank of Japan, the Bank of Mexico, and the Swiss National Bank. Developed-Emerging Economies   Since 2007, developed-economy central banks have also provided swap lines to a limited number of emerging economies. Because of the risks associated with swap lines, the Fed has been much more cautious in extending them to emerging economies than it has been with other developed economies. The Fed insisted on provisions allowing it to seize their assets at the New York Fed in the case of failure to repay. In October 2008, the Fed extended swap lines to Brazil, Mexico, South Korea, and Singapore. How were these countries chosen, out of the many that requested them? Both the State Department and the Treasury were consulted about which countries fit the criterion laid out by the Fed, which was that “intensification of stresses in [these countries] could trigger unwelcome spillovers for both the U.S. economy and the international economy more generally.” The transcript of the FOMC meeting at which the final decision was made shows that members had very specific concerns, such as whether countries with large holdings of mortgage-backed securities issued by Fannie Mae and Freddie Mac might be tempted to dump them all at once if they lacked easier access to dollars, thereby forcing up mortgage rates and impeding recovery in the United States. In his book International Liquidity and the Financial Crisis, William Allen provides estimates for a series of countries on the gap between the amount of bank liabilities in a particular currency that needed to be refinanced and the funds available for this purpose. Of the emerging-market economies, the Brazilian banking system had the greatest dollar gap and the Korean banking system had the greatest dollar gap among Asian banking systems. The Fed swap lines to emerging economies, like those to developed economies, helped fill these dollar gaps and lowered dollar interest rates. The ECB initially agreed to provide euros to Hungary, Latvia, and Poland only through repurchase agreements, in which bonds rather than currency are held as collateral, but eventually extended temporary swap lines to Hungary and Poland. Switzerland also provided Swiss francs to Poland and Hungary in exchange for euros. Many households in Poland and Hungary had taken out foreign-currency-denominated mortgages because of the lower interest rates available on these loans. Demand for Swiss francs and euros from the Hungarian and Polish banks that issued the loans drove up borrowing costs in these currencies; the swap lines were intended to alleviate the upward pressure this demand was placing on euro and Swiss franc interest rates. The Scandinavian economies provided small euro swap lines to surrounding emerging economies to support financial stability in these countries. The Swedish central bank agreed to provide euros to the central banks of Latvia, Estonia, and Iceland. Norway provided euros to Iceland, and Denmark provided euros to Iceland and Latvia. The loans to Latvia from Sweden and Denmark were bridging loans “to support financial stability in Latvia until the IMF programme for Latvia [had] been decided on.” Roughly 80 percent of the Latvian banking system, and 90 percent of the Estonian banking system, is owned by banking groups headquartered in Sweden, Norway, and Denmark, so financial instability in Latvia or Estonia would have had repercussions in Scandinavia. Iceland has cooperated with Sweden, Norway, and Denmark through the Nordic Council, an interparliamentary body, since 1952; Nordic countries provided Iceland with $2.5 billion in loans during the financial crisis, and the swap lines were a natural complement to this.  In 2020, during the COVID-19 crisis, both the Fed and the ECB again extended swap lines to select developing-country central banks. The Fed approved emergency lines on March 19 for Brazil, Mexico, South Korea, and Singapore—the same developing nations that had received them in 2008. As with its emergency developed-world swap lines, the Fed approved the lines for six months and later renewed them through the following March. On April 15, the ECB approved a temporary line to Croatia, and eight days later it granted one to Hungary. Over the course of the pandemic’s early months, the ECB also established repurchase agreements with Albania, North Macedonia, San Marino, and Serbia. The Fed's emergency swap line agreements with Brazil, South Korea, Mexico, and Singapore expired in 2021. Chiang Mai   After the 1997–98 Asian financial crisis, the Association of Southeast Asian Nations (ASEAN), China, South Korea, and Japan established a network of bilateral currency swap agreements “to supplement the existing international facilities.” In 2010, the Chiang Mai Initiative (CMI) was multilateralized, meaning that it was converted from a network of bilateral agreements between countries into one single agreement, the Chiang Mai Initiative Multilateralization (CMIM). A surveillance unit, the ASEAN+3 Macroeconomic Research Office (AMRO), was created to monitor member economies for signs of emerging risks and to provide analysis of countries requesting funds from the CMIM, much as the International Monetary Fund (IMF) does for its member countries. The fourteen countries participating in the CMIM agreed to a certain financial contribution and were thereafter entitled to borrow a multiple of this, ranging from 0.5 for China and Japan to five for Vietnam, Cambodia, Myanmar, Brunei, and Laos. In 2014, the size of the agreement was doubled from $120 billion to $240 billion, and the amount a country could access without being on an IMF program was raised from 20 percent to 30 percent. These swap lines have never actually been used. Even during the financial crisis, when Korea was drawing as much as $16.4 billion from its swap line with the Federal Reserve, neither Korea nor any other country that was party to these agreements used them to obtain foreign currency. While the amounts available through Chiang Mai were potentially large enough to significantly augment a country’s reserves, IMF conditionality (for borrowing beyond 30 percent of a country’s quota) was a major deterrent to using Chiang Mai funds; in contrast, borrowing the full amount available through the Fed’s swap lines did not require any kind of IMF program. China   Since 2009, China has signed bilateral currency swap agreements with thirty-two counterparties. The stated intention of these swaps is to support trade and investment and to promote the international use of renminbi. Broadly, China limits the amount of renminbi available to settle trade, and the swaps have been used to obtain renminbi after these limits have been reached. In October 2010, the Hong Kong Monetary Authority and the People’s Bank of China (PBoC) swapped 20 billion yuan (about $3 billion) to enable companies in Hong Kong to settle renminbi trade with the mainland. In 2014, China used its swap line with Korea to obtain 400 million won (about $400,000). The won were then lent on to a commercial bank in China, which used them to provide trade financing for payment of imports from Korea. In addition to using the swaps to facilitate trade in renminbi, China is also using the swap lines to provide loans to Argentina in order to bolster the country’s foreign exchange reserves. In October 2014, a source at the Central Bank of Argentina reportedly told Telam, the Argentine national news agency, that the renminbi Argentina receives through the swap could be exchanged into other currencies. Argentina has had difficulty borrowing dollars on international markets since it defaulted on its debt in July and has faced shortages on a range of imported goods as a result. Swapping renminbi into dollars would enable companies to import more than they would be able to otherwise. In 2023, Argentina again drew on its swap line with China to avoid defaulting with the IMF. Much as the Fed faced domestic criticism for “bailing out” European banks during the financial crisis, the PBoC was subjected to public chiding for signing a swap agreement with Russia shortly before the plunge in the value of the ruble in late 2014. The PBoC felt compelled to respond through Chinese social media, explaining that swaps are collateralized based on the exchange rate prevailing at the time they are actually used, and not at old rates prevailing at the time agreements are signed. Past movements in the value of the ruble were, therefore, irrelevant—the Bank was, in fact, well protected. But the controversy highlighted how sensitive the issue of swaps had become in an era of global financial turbulence. The Future In October 2008, then New York Fed President Timothy Geithner observed that Europe “ran a banking system that was allowed to get very, very big relative to GDP, with huge currency mismatches and with no plans to meet the liquidity needs of their banks in dollars in the event that we face a storm like this.” While the swap lines prevented fire sales of assets and other actions that would have exacerbated the crisis, the fact that the swap lines now appear permanent may actually encourage these “huge currency mismatches” to grow. Banks will now expect their central banks to provide them with foreign currency if market stresses once again make this funding difficult to obtain in private markets, and those who lend to foreign banks will continue to do so in the expectation that, in a crisis, they will be repaid with funds borrowed from the central bank. The existence of swaps therefore makes restraints on banks’ reliance on short-term funding, and requirements that foreign banks hold high-quality, liquid, local-currency assets, all the more important. Interactive Map   This currency swap interactive was created by Director of International Economics Benn Steil, former analyst Benjamin Della Rocca, and former analyst Dinah Walker.  Please also visit our Global Monetary Policy Tracker, Global Imbalances Tracker, Global Growth Tracker, Global Trade Tracker, Global Energy Tracker, and Sovereign Risk Tracker.
  • Economics
    Global Trade Tracker
    The CFR Global Trade Tracker allows you to gauge trends in international trade through time. The map below compiles trade data from 178 countries as reported to the International Monetary Fund (IMF). It displays values for each country’s trade in tangible goods and, for countries reporting the necessary data to the IMF, it also shows the value on their current accounts (that is, adding in services trade, payments to investors abroad, and other foreign funds transfers). For both current-account and goods-trade data, you can choose to view countries’ exports, imports, total trade volume, or balance of trade. You can also choose to see the data in U.S. dollars or as a share of countries’ gross domestic product (GDP). Use the drop-down menu above the map to select which figures to display. Hover over a particular country to see its latest data and, to view changes over time, adjust the date using the slider above the map. Dollar-denominated data appears on the map as circles, and each circle’s area scales with the size of that country’s trade. Countries are shaded according to their share of GDP, with darker shading signaling more trade. Countries with a positive trade balance are colored in green, while those with a negative balance are colored in orange. The data highlights significant trends in global trade. It shows, among other things, how trade plunges during recessions and climbs during recovery. In the third quarter of 2009, for example, one year after the onset of the Great Recession, global goods trade plunged by 25 percent from the year prior (by 10 percent of each country’s GDP, on average). Trade then climbed higher over the subsequent decade but fell sharply again during the COVID-19 pandemic. By the second quarter of 2022, goods trade had risen back to pre-pandemic levels. After moderating over the course of 2022, it has fallen mildly in 2023. Factors weighing on trade include depressed demand owing to high borrowing costs, falling commodity prices, and growing tensions between China and the West.    You can also view historical trade data for each country on the chart below. Select a country with the left drop-down menu and which category to display with the right one. To the left of the chart, you can see the selected country’s most recent trade figures and average tariff rates. For sixty large national economies, the chart also displays data on each country's bilateral trade relationships with its largest trading partners.   As both the map and the chart show, the dollar value of global trade has grown markedly over the past three decades. Some of this rise owes to increased globalization, but price inflation has also played a role in the dollar data. Countries’ share-of-GDP numbers, which strip out most of the inflation effects, have naturally risen more slowly. Please also visit our Global Monetary Policy Tracker, Global Imbalances Tracker, Global Growth Tracker, Global Energy Tracker, Sovereign Risk Tracker, and Central Bank Currency Swaps Tracker. Data Notes The map above shows goods-trade and current-account figures for countries that report them to the IMF’s Balance of Payments dataset. All trade data is shown as four-quarter rolling sums, as is current-account data for countries that report quarterly. Otherwise, data is annual. GDP figures come from the IMF’s International Financial Statistics (IFS) dataset, except for Venezuela after 2012, for Myanmar prior to 2013, and for cases in which the IFS has not yet published a country’s figures. In those cases, GDP numbers come from the IMF’s World Economic Outlook. For each country, its top three trading partners are defined as those countries with which it has the greatest goods-trade volume over the most recent eight quarters of data.
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