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Cato Daily Dispatch for August 14, 2002

EU Urges Aspirants to Avoid Signing U.S. Exemption Agreement to International Criminal Court.

The European Union this week warned the 13 nations hoping to join the organization that they should resist signing any agreement, as requested by Washington, that would protect Americans from the reach of the new International Criminal Court, according to The New York Times.

That brought strong reactions from Washington today; a senior State Department official accused the European Union of using undue pressure to prevent countries from signing.

The Bush administration vigorously opposes cooperation with the court, fearing Americans will be unfairly singled out. Under an agreement reached with the United Nations in the spring, personnel of United Nations missions, including American peacekeepers, are exempted from court jurisdiction for a year. The administration is campaigning to persuade most countries to sign agreements not to extradite Americans to the court.

In "Reasonable Doubt: The Case Against the Proposed International Criminal Court," Foreign Policy Analyst Gary T. Dempsey explains that "the court threatens to diminish America's sovereignty, produce arbitrary and highly politicized 'justice,' and grow into a jurisdictional leviathan."

ABA Opposes Secret Detention of Foreign Nationals

The American Bar Association voted yesterday to oppose the Bush administration's secret detention of foreign nationals after the Sept. 11 attacks, urging that their names be disclosed and they be given immediate access to lawyers and family members, Reuters reported.

The nation's largest lawyers group joined civil libertarians and others who have criticized the government's policy of secret and prolonged detentions.

In "Breaking the Vicious Cycle: Protecting Our Liberties While Fighting Terrorism," Timothy Lynch, associate director of Cato's Center for Constitutional Studies, argues that government officials have typically responded to terrorist attacks by enacting "antiterrorism" legislation designed to assuage public fears by making "the dubious claim that they can prevent terrorism by curtailing the privacy and civil liberties of the people."

Brazilian Markets Tumble Over Economic Fears

Less than a week after Brazilian markets received a much-needed shot of confidence from a $30 billion International Monetary Fund loan package to the country, fears over Brazil's economic prospects dragged down stock and bond prices and the beleaguered real, The New York Times reported.

The currency closed at 3.16, to the United States dollar, down 0.5 percent from Monday's level - and off 8.6 percent since Thursday - as word spread that Moody's Investors Service, the ratings agency, had downgraded Brazil's foreign-currency bonds and notes from B1 to B2, five levels below investment grade. The benchmark C-Bond closed at 51.46, wiping out the 13 percent gains made last week on the coattails of the phased IMF package, announced on Wednesday.

Ian Vasquez, director of Cato's Project on Global Economic Liberty, has written extensively about the failure of bailouts in Latin America.

Vasquez examines the ramification of the IMF's 1995 bailout of Mexico in "A Retrospective on the Mexico Bailout" and finds that "the IMF's role as creditor and third-party negotiator created disincentives for Mexico and its private-sector creditors to agree on a debt workout, thus actually delaying reform."

In "An IMF Plan For Argentina: Debt Reduction, Not A Bailout," Vasquez is skeptical of bailout plans for Argentina and other Latin American nations as they could "reduce accountability and the prospects for improved economic performance."