Trade liberalization in the Doha Development Round

SUMMARY

 

Gauging the WTO negotiation's potential gains
Doha Round

The Doha Round faced a long series of launch-delays and a spectacular launch-failure in Seattle in 1999. While the talks did take off in 2001, the negotiating agenda is still ambiguous in a number of crucial areas. This paper argues that these ambiguities matter greatly. Such ambiguities include the meaning of 'flexibility and exemptions', which are part of the evolving framework for market access negotiations. This may (or may not) be read as allowing developing countries to opt for much smaller concessions than those to be undertaken by the OECD, or even for no concessions. To explore these issues, we examine the impact of multilateral liberalization, developing possible trade liberalization under the Doha Round, starting from a realistic 'baseline' including Chinese WTO Accession and the 2004 EU enlargement. This allows us to focus on effects specifically attributable to trade liberalization under the Doha Round and the potential impact of the Doha Round itself. To this end we employ a global applied general equilibrium model, featuring imperfect competition and variety effects. Scenarios include agriculture, manufactures, and services liberalization, as well as trade facilitation. We conclude that active developing country participation in terms of market access concessions is critical to their prospects. If developing countries continue for the most part with business as usual after the round, in terms of trade policy, there is little scope for actual benefits accruing to developing countries. South-South trade liberalization is key to the 'development' part of the Doha Development Agenda.

— Joseph Francois, Hans van Meijl and Frank van Tongeren