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GTAP Resources: Resource Display

GTAP Resource #1938

"WTO’s Doha Cotton Initiative: How will it affect developing countries?"
by Anderson, Kym and Ernesto Valenzuela


Abstract
For many developing countries, especially in Africa and Central Asia, cotton is an important cash crop. It is receiving attention of late because four poor cotton-exporting West African countries have demanded that cotton subsidy and import tariff removal be part of the World Trade Organization’s Doha Development Agenda (DDA). Cotton subsidies are mostly provided by governments in high-income countries, and part of the US cotton subsidy program has been ruled illegal following a WTO dispute settlement case brought by Brazil.
How much would Sub-Saharan Africa and Central Africa gain from removal of all cotton subsidies and tariffs? How would the welfare of those cotton-importing developing countries with export interests in textiles and clothing be affected by such reform? What would be the relative contributions of domestic support, export subsidies and import tariffs to the global gains from removal of those measures? And how would the gains from full reform compare with the gains that could be expected if and when (a) the US complies with its WTO obligations, and (b) the partial reforms proposed in the Hong Kong Trade Ministerial meeting are implemented as part of the DDA?
The Cotton Initiative under the WTO’s DDA has not only the trade policy reform, but also a development component aimed at boosting the international competitiveness of cotton producers in low-income countries. One prospective way to do that is for governments of those countries to encourage adaptation and allow adoption of new varieties of cotton from biotechnology alteration, the affordability of which will be greater in the absence of market distortions. How do the estimated gains from cotton subsidy and tariff reform compare with the prospective gain from wider adoption by developing countries of GM cotton? And how much greater would be the gains to cotton-producing developing countries from GM cotton adoption if global cotton markets were not distorted by subsidies and tariffs?


Resource Details (Export Citation) GTAP Keywords
Category: GTAP Application
Status: Published
By/In: The World Bank, Trade Note No. 27
Date: 2006
Version:
Created: Valenzuela, E. (3/30/2006)
Updated: Valenzuela, E. (4/28/2006)
Visits: 1,706
No keywords have been specified.


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