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GTAP Resource #1724

"Poverty Impacts of a WTO Agreement: Synthesis and Overview"
by Hertel, Thomas and Alan Winters


Abstract
This paper summarizes the findings from a major international research project investigating the poverty impacts of a potential Doha Development Agenda. It combines in a novel way the results from several strands of research. Firstly, it draws on an intensive analysis of the DDA Framework Agreement, with particularly close attention paid to potential reforms in agriculture. The scenarios are built up using newly available tariff line data and their implications for world markets are established using a global modeling framework. These world trade impacts, in turn, form the basis for thirteen country case studies, and two global analyses of the poverty impacts of these DDA scenarios.

This paper will begin by outlining the methodology for developing the global results and communicating them to the national models. It will then turn to a summary of a few of the main findings including the following:

• The liberalization targets under the DDA have to quite ambitious if the round is to have a measurable impact on world markets and hence poverty.

• Assuming an ambitious DDA, we find the near-term poverty impacts to be mixed; some countries experience small poverty rises and others more substantial poverty declines. On balance, poverty is reduced under this DDA, and this reduction is more pronounced in the longer run.

• Allowing minimal tariff cuts for just a small percentage of special and sensitive products reverses the results, with the ensuing DDA raising, rather than lowering, global poverty.

• Deeper cuts in developing country tariffs would make the DDA more poverty friendly.

• Key determinants of the national poverty impacts include: the incomplete transmission of world prices to rural households, barriers to the mobility of workers between sectors of the economy, as well as the incidence of national tax instruments used to replace lost tariff revenue.

• In order to generate significant poverty reductions in the near term, complementary domestic reforms are required to enable households to take advantage of new market opportunities made available through the DDA.

• Sustained long term poverty reductions depend on stimulating economic growth. Here, the impact of the DDA (and trade policy more generally) on productivity is critical. In order to fully realize their growth potential, trade reforms need to be far reaching, addressing barriers to services trade and investment in addition to merchandise tariffs.


Resource Details (Export Citation) GTAP Keywords
Category: GTAP Application
2005 Conference Paper
Status: Published
By/In: Presented at the 8th Annual Conference on Global Economic Analysis, Lübeck, Germany
Date: 2005
Version:
Created: Hertel, T. (4/29/2005)
Updated: Batta, G. (6/21/2005)
Visits: 2,976
No keywords have been specified.


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