The Doha Development Agenda
Yvan Decreux1, Lionel Fontagné2
WTO, November 2, 2010
1: CEPII, ITC
2: CEPII, University Paris 1
July 2008 package
Based on two different studies
1. Decreux, Y. & Fontagné, L. (2009). Economic Impact of
potential outcome of the DDA, CEPII Research Report 2009-01
More comprehensive: includes trade facilitation
2. Decreux, Y. (2009). Effets d’un accord commercial multilatéral
sur la base des propositions de décembre 2008, Report for the
French Government
More recent:
• Includes precisions added in the December 08 package (anticoncentration clause and other elements related to sensitive products)
• Some technical improvements
• More sector details in agriculture
Downloadable
Both studies downloadable here:
https://sites.google.com/site/ydecreux/
Subjects covered
•
•
•
•
Agriculture
NAMA
Services
Trade facilitation
Agriculture
• Domestic support: mostly the US and EFTA
• Export subsidies
– US, EU
– Agreement found long ago
• Tariffs: EU, EFTA, Japan
NAMA
• Tariffs only
• Most efforts to be made by developing
countries (despite special and differential
treatment)
• But many are exempt of actual tariff
reductions: Small and Vulnerable Economies,
LDCs
Export subsidies
• Not really damaging in a deterministic world
(stable prices and production), except for
countries strongly specialised in agriculture
• The world is not deterministic, especially in
agriculture
• Export subsidies (and tariffs) used to moderate
internal instability, to the expense of other
countries
• Early agreement to phase out all export subsidies
by 2013
Modelling
• Based on the Mirage model (CEPII) + MAcMap
data (ITC, CEPII)
• Some data missing (historical AMS for
instance) → relied on INRA work (J-C Bureau,
J-P Butault) for static impact
• Inflation and growth: all commitments (except
de minimis) expressed in LCU
Inflation issue (illustrated)
AMS (nominal)
AMS (%)
AMS
AMS
AMS (Doha)
X Sub (nominal)
AMS (Doha)
X Sub (%)
X Sub
X Sub (Doha)
X Sub
X Sub (Doha)
Inflation issue (continued)
• Not taking it into account leads to
– Overestimate the effect of export subsidy
suppression
– Underestimate the effect of domestic support
reduction
• Overall, broadly neutral on agricultural
production as a whole for the EU, but
significant differences at the product level
(milk, sugar)
Tariff reductions
• Agriculture: tiered formulas
– Sensitive products (tariff-rate quotas)
– Special products
– Tariff escalation issue
– Tropical products
• NAMA: Swiss formulas
– Sensitive products for developing countries
– Anti-concentration clause
Implementation
• Formulas applied to bound tariffs, at the HS6
level (MAcMap-HS6 2004)
• Impact on applied tariffs
• Aggregated at the sector and region level
Other subjects
• Services
– Developed and emerging countries, on a free basis
– Much less quantified at this stage
• Trade facilitation
– Potential source of significant gains
– Not really a negotiation issue
Mirage
• Computable General Equilibrium Model of the
World economy
• Sequential dynamics setting
– Capital accumulation
– Exogenous labour, population and TFP growth
• Exogenous labour supply & unemployment
• Based on GTAP, MAcMap and other data
sources (ILO, IMF, ...)
Scenarios
• Goods: December 08 proposals
• Services:
– Study 1: 3% cut for country participating in the
specific negotiations on services
– Study 2: 10% cut of the estimated ad-valorem
equivalent of barriers to services trade, all
countries except Sub-Saharan Africa and Rest of
the World (mostly non-WTO members) → really
optimistic
World welfare
World welfare variations (%)
0.14
0.12
0.10
0.08
Goods
Goods & Ser
0.06
0.04
0.02
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
0.00
Welfare: industrialized regions
1.2
1.0
0.8
0.6
Goods
Goods & Ser
0.4
0.2
0.0
Welfare: Asia
0.8
0.7
0.6
0.5
0.4
0.3
Goods
Goods & Ser
0.2
0.1
0.0
-0.1
Welfare: Latin America
0.5
0.4
0.3
Goods
Goods & Ser
0.2
0.1
0.0
Argentina
Brazil
Venezuela &
Colombia
Rest of South America
Welfare losses
0.1
0.0
-0.1
Goods
Goods & Ser
-0.2
-0.3
-0.4
-0.5
Sources of gains / losses
• Allocation efficiency: gains especially
generated on high tariffs
• Terms of trade: balance of concessions &
preference erosion
• Capital accumulation
Employment in agricultural sectors
15
10
5
0
-5
-10
-15
-20
Japan
Korea & Taiwan
Indonesia & Malaysia
Thailand
North Africa
Sub-Saharan Africa
Forestry
Fishing
Primary products
Textile
Clothing
Leather
Paper & editing
Chemicals
Metals
Cars & trucks
Trains, Planes, Bikes, Boats
Electronic equipment
Machinery
Other Manuf
NAMA
China & Hong-Kong
NAMA exports (selected, bn USD)
0.0
0.0
0.8
11.5
36.4
7.6
0.1
2.4
1.0
-0.7
0.1
3.9
-0.0
3.1
66.2
0.0
0.1
1.8
0.9
0.2
-0.0
-0.1
0.5
-0.1
32.9
-0.5
-0.6
-6.4
-0.0
28.6
0.0
0.0
1.1
12.4
1.1
0.2
0.0
5.0
0.3
7.4
-0.7
-9.3
2.5
0.1
20.1
-0.1
-0.0
0.1
7.0
2.2
2.3
-0.3
-0.7
-0.8
-0.2
-0.3
-0.1
-1.9
-0.4
6.5
0.0
0.0
0.1
0.5
0.7
2.1
0.0
0.8
-0.1
0.8
0.0
0.2
0.8
-0.3
5.8
0.0
0.0
1.2
-0.1
-0.8
0.1
0.0
0.3
0.3
0.1
0.1
0.0
0.8
0.1
2.3
0.0
0.0
-0.2
-0.5
-0.6
0.0
-0.0
0.0
-0.1
-0.1
-0.3
0.0
-0.0
-0.0
-1.8
Sub-Saharan Africa
Korea & Taiwan
Japan
North Africa
0.1 -0.2
0.0 -0.0
6.8 -7.6
-4.9 17.6
-5.8 35.1
6.1
9.9
1.0 -0.7
0.0 -8.2
3.8 -10.4
-16.3 -9.5
4.3 -1.3
2.3
2.8
15.4 -16.2
2.4
2.3
15.1 13.3
US
Forestry
Fishing
Primary products
Textile
Clothing
Leather
Paper & editing
Chemicals
Metals
Cars & trucks
Trains, Planes, Bikes, Boats
Electronic equipment
Machinery
Other Manuf
NAMA
China & Hong-Kong
EU27
NAMA production (selected, bn USD)
-0.1 -0.0
0.0
-0.1 -0.0
0.0
-0.7 -0.2
2.9
-1.4 15.5 -12.1
-4.3
1.1 -9.6
-1.9
0.2 -1.5
-0.8 -0.2
1.6
-0.3
7.8
6.5
0.5 -2.5
5.2
53.1
3.1
0.4
-1.0 -1.1
1.7
-0.2 -12.0 12.6
-8.3 -0.9
9.9
-0.9 -0.0
1.5
33.5 10.7 19.3
0.0
-0.0
0.7
-2.4
-2.0
-0.2
-0.2
-1.2
0.2
-0.5
0.2
0.0
0.7
-0.3
-4.9
-0.0
0.0
-0.1
-1.0
-0.8
-0.0
-0.0
-0.0
-0.1
-0.2
-0.3
0.0
-0.1
-0.1
-2.7
Trade facilitation
• Based on estimates of time spent to export and import, by
Minor and Tsigas
• Time spent at the port supposed to partially converge to
the median performance, for all countries over that median
• No reduction of transport cost assumed
• Expressed as an iceberg cost
1.
2.
Minor P. & Tsigas M. 2008. “Impacts of Better Trade Facilitation in
Developing Countries, Analysis with a New GTAP Database for the Value
of Time in Trade”, GTAP 11th Conference, Helsinki.
USAID 2007. “Calculating Tariff Equivalents for Time in Trade”, March
Trade facilitation impact
• Adds almost 100 bn USD gain per year (from
68 bn to 167 bn)
• Especially favorable to developing countries,
in particular Sub-Saharan Africa
• Lack of a clear commitment by all partners to
let trade facilitation benefits be an outcome of
Doha negotiations
Limitations of the methodology
• Actual impacts of export subsidies not properly
measured in a deterministic framework
• Preference erosion may be overestimated: rules
of origin actually reduce current preference
benefits + importance of the EU in Sub-Saharan
Africa tend to decrease more quickly than
projected
• Impact on poverty and inequality not assessed
• Possible impact of trade competition on
productivity not accounted for
Conclusion
• Balanced proposal, employment in agriculture
rises in developing countries
• Concern on preference erosion
• Conservative estimates: benefits expected to
be at least as large as the ones mentioned
• Current situation corresponds to a noncooperative equilibrium