A Quantitative Assessment of the Outcome of the Doha Development Agenda

Abstract

Different options contemplated by the negotiators of the Doha Development Agenda are assessed using the Computable General Equilibrium model MIRAGE, the MAcMap and GTAP databases, existing estimates of protection in the services sector as well as estimates of the administrative and transaction costs to be reduced by trade facilitation measures.

In all scenarios (with the exception of "free trade"), we consider that the "G90" will not be requested to liberalise. Export subsidies in agriculture are completely eliminated, taking into account the 2013 deadline agreed in Hong Kong in December 2005, and domestic farm support is halved. When an average 36% linear cut in tariffs is implemented in the industrial and in the agricultural sectors (but with a reduction limited to 25% for sensitive products in the latter sector), we end up with a "Round for nothing". At the opposite of the spectrum, free trade in goods would lead to USD 232 bn welfare gains for the world economy (expressed in 2005 terms). There is however more to be gained, for the world economy, from a 25% cut of the barriers in services, than from a 70% tariff cut in agriculture in the North and a 50% cut in the South. On the top of this, a successful trade facilitation agenda would be equivalent to doubling official development aid to Sub-Saharan Africa countries after 2020. In the latter case, how to finance such program remains however a challenging issue.