Agricultural Trade Reform and the Doha Development Agenda

Abstract

This paper examines the extent to which various regions, and the world as a whole, could gain from multilateral trade reform over the next decade. The World BankÂ’s LINKAGE model of the global economy is employed to examine the impact first of current trade barriers and agricultural subsidies, and then of possible outcomes from the WTOÂ’s Doha round. The results suggest moving to free global merchandise trade would boost real incomes in Sub-Saharan Africa and Southeast Asia (and in Cairns Group countries) proportionately more than in other developing countries or high-income countries. Real returns to farm land and unskilled labor, and real net farm incomes, would rise substantially in those developing country regions, thereby helping to reduce poverty. A Doha partial liberalization could take the world some way towards those desirable outcomes, but more so the more agricultural subsidies are disciplined and applied tariffs are cut, and the more not just high-income but also developing countries choose to engage in the process of reform.Trade policy, WTO, Doha Development Agenda, multilateral negotiations, computable general equilibrium modeling.