Eight years of Doha trade talks

In 2001, the World Trade Organization launched a highly ambitious program of multilateral liberalization. Eight years later, concluding the negotiations is uncertain, though an opportunity still exists. Since 2001, many proposals on market access have been brought to the negotiating table by the E.U., the United States, and the G-20. Because it is politically and economically acceptable to many parties, the final December 2008 package could be the basis of an agreement. An evaluation of these various proposals shows how trade negotiations have been following countries’ strategic interests. In eight years, the ambition of the formula to reduce agricultural market access tariffs has increased, but flexibilities added to accommodate domestic political constraints have offset delivered market access. The December 2008 package would reduce these average tariffs by 25 percent, a reduction very close to the one implied by the Harbinson and Girard proposals of 2003. This has to be compared with the 73 percent reduction in world agricultural protection by the very ambitious 2005 U.S. proposal. The 2005 G-20 and E.U. proposals were intermediate outcomes. The December 2008 package implies a reduction of agricultural protection by 6 percentage points in high-income countries and 0.5 percentage points in middle-income countries. If the U.S. proposal had been applied, these figures would have been 12.4 and 4.7, respectively. Different scenarios imply losses for developing countries, reflecting eroding preferences and rising terms of trade for imported commodities, including food products. We study how this trade reform can be more development-friendly.Computable general equilibrium (CGE) modeling, Developing countries, Trade negotiations, WTO Doha round,

The potential cost of a failed doha round:

"This study offers new conclusions on the economic cost of a failed Doha Round. The first section is devoted to an analysis of how trade policies evolve in the long and medium runs. We show that even under normal economic conditions, policymakers modify tariffs to cope with the evolution of world markets. We then use the MIRAGE Computable General Equilibrium model to assess the potential outcome of the Doha Round, and then examine four protectionist scenarios. Under a scenario where applied tariffs of major economies increase up to the currently bound tariff rates, we find that world trade decreases by 7.7 percent and world welfare drops by US$353 bn. We then compare a resort to protectionism when the Doha Development Agenda (DDA) is implemented versus a resort to protectionism when the DDA is not implemented. We find that this trade agreement could prevent the potential loss of US$ 809 bn of trade, and could therefore act as an efficient multilateral insurance scheme against the adverse consequences of “beggar-thy-neighbor” trade policies." from authors' abstractTrade negotiations, Computable general equilibrium (CGE) modeling, Bound duties, Domestic support, Globalization, Markets, Doha Development Agenda,

Economics of export taxation in a context of food crisis

This paper aims to assess the rationales for the use of export taxes, in particular in the context of a food crisis. First, we summarize the effects of export taxes using both partial and general equilibrium theoretical models. When large countries have an objective of constant food domestic prices, in the event of an increase in world agricultural prices the optimal response is to decrease import tariffs in net food-importing countries and to increase export tariffs in net food-exporting countries. The latter decision is welfare improving while the former is welfare reducing: it is the price to pay to get domestic food prices constant. Small countries are harmed by both decisions. Second, we illustrate the costs of a lack of cooperation in and regulation of (binding process) such policies in a time of crisis using a global computable general equilibrium (CGE) model illustration, mimicking the mechanisms that have appeared during the recent food price surge. We conclude with a call for international regulation, in particular because small net food-importing countries may be substantially harmed by these beggar-thy-neighbor policies that amplify the already negative impact of the food crisis.Computable general equilibrium (CGE), export taxes, Food crisis, optimum tariff,

A picture of tariff protection across the World in 2004: MAcMap-HS6, Version 2

MAcMap-HS6v2 is a comprehensive database providing detailed protection data at the 6 digit level of the harmonized system (HS6), i.e. more than 5000 products, for the year 2004. It includes ad valorem equivalents on MFN tariffs for 169 importing countries, as well as bilateral applied protection, together with preferential provisions for 220 partners. Specific and compound tariffs and tariff rate quotasdata are also provided, at the same level of detail. In this paper we present the methodology used for building this new database, paying attention to the consequences from such choices. We then provide evidence on the world applied protection in 2004. Finally we investigate variations in tariffs occurred between 2001 and 2004.Globalization, Markets, trade policies, tariffs, databases, Ad valorem equivalent,

Measuring the impacts of global trade reform with optimal aggregators of distortions:

Traditional weighted-average measures of trade distortions are widely used in analyzing global and regional reforms, despite well-known deficiencies. This paper develops and applies optimal aggregators for the real-world case of multiple countries and commodities with much more detailed information on trade than on production and consumption. The approach reflects that different aggregators are needed for expenditure on imported goods and tariff revenues, and allows for incorporation of both intensive and extensive margins of adjustment to reform. Applications confirm that the technique is straightforward enough for widespread use, and point to close to a doubling of the welfare gains at the intensive margin when using the highest possible level of international commodity disaggregation, with larger gains in developing regions than in the industrial countries. The measured income gains increase along the entire path of liberalization, with slightly larger increases in the earlier stages, where the gaps between the responses of the expenditure and tariff revenue aggregators are largest. Sensitivity analysis suggests that, for global trade reform, the ease of substitution between tariff lines is much more important than that between varieties from different countries.aggregation, distortions, economic welfare measurement, Trade reform, trade restrictiveness,

The Costs and Benefits of Duty-Free, Quota-Free Market Access for Poor Countries: Who and What Matters

This paper examines the potential benefits and costs of providing duty-free, quota-free market access to the least developed countries (LDCs), and the effects of extending eligibility to other small and poor countries. Using the MIRAGE computable general equilibrium model, it assesses the impact of scenarios involving different levels of coverage for products, recipient countries, and preference-giving countries on participating countries, as well as competing developing countries that are excluded. The main goal of this paper is to highlight the role that rich and emerging countries could play in helping poor countries to improve their trade performance and to assess the distribution of costs and benefits for developing countries and whether the potential costs for domestic producers are in line with political feasibility in preference-giving countries.CGE modeling, trade policy, duty-free market access, technical barriers to trade,preference erosion

Computing Value of Production (VoP) for the Ag-Incentives NRA Dataset

This document describes the steps involved in generating the value of production in the Ag-Incentives database

Nominal Rate of Assistance (NRA): Data Processing and Treatment

Support to agriculture producers is provided in different forms, including border measures, domestic subsidies, and income transfers from taxpayers to producers. International Food Policy Research Institute (IFPRI) maintains a harmonized database on nominal rate of protection (NRP) for the AgIncentives Consortium (www.ag-incentives.org) constituted by OECD (Organization for Economic Co-operation and Development), FAO, IFPRI, the Inter-American Development Bank (IADB), and the World Bank. The database provides measures of the extent of market price distortion of agricultural products caused by border measures, such as tariffs, quotas, trade bans, export taxes, etc. While the NRP has been the focus of this database to date, the Ag-Incentives Consortium has decided recently to also include estimates of the nominal rate of assistance (NRA) in the database. The NRA includes subsidies and income transfers in addition to price support through border measures, thus providing a more complete picture of the extent of producer support to the agricultural sector. This document describes the different steps of data processing, mapping of payment types to NRA categories, nomenclatures followed etc. Starting with an overall methodology, the document presents data processing steps and procedures followed for each source of data received from IOs

MIRAGRODEP 2.0: Documentation

MIRAGRODEP is a recursive-dynamic, multi-region, multi-sector computable general equilibrium model, devoted to trade and agricultural policy analysis. It is developed for AGRODEP and draws upon the MIRAGE model built by CEPII. It incorporates specific features such as foreign direct investment and runs with a tariff aggregation module that allows the user to capture the exclusion effects at a detailed level and the variance of tariffs. The model also includes a submodule allowing to test different closures for the public sector as well as the inefficiency of the tax collection system. MIRAGRODEP 2.0 includes an improved demand system. Social Accounting Matrix (SAM) and trade data in MIRAGRODEP are based on the GTAP database. Additional sources such as MacMap are used for protection data. This technical note presents an expanded documentation, with instructions on how to run the model and an illustrative application

Introducing the Updated AgIncentives Database

Prior to the 1980s, information on agricultural incentives provided by governments was extremely limited and difficult to access. Much debate took place on the basis of participants’ preferred alternative facts. During the 1980s, the OECD began to collect detailed information on agricultural incentives in member countries, but data remained fragmentary for developing countries. The only close-to-global information on agricultural distortions was provided by a one-off study undertaken by Kym Anderson at the World Bank, completed in 2009. The objective of this initiative is to bring together information on agricultural incentives from five key institutions: FAO; the Inter-American Development Bank; IFPRI; the OECD, and the World Bank. The resulting data are presented in a consistent format at http://www.agincentives.org . This paper discusses the methods used and the coverage of this database, and its potential value to economic modelers