Policy Brief 18, November 2009

Is Development Back in the Doha Round?.

As trade ministers prepare to assemble November 30 in Geneva for further WTO talks, they are hearing another round of new and refurbished projections of how much wealthier the world might be after liberalizing trade.  The upcoming ministerial is no different, and neither, fundamentally, are the projections, notwithstanding one recent claim that an ambitious Doha deal could deliver $300-$700 billion in global welfare gains, with the benefits “well-balanced” between developed and developing countries.

These recent projections, from the Washington-based Peterson Institute for International Economics, contrast with the World Bank’s widely publicized 2005 estimates of global gains from a “likely Doha scenario” of less than $100 billion, with just $16 billion going to developing countries.  Did economists find another $150-$350 billion in benefits for developing countries that the World Bank missed in 2005?  Is development back in the Doha Round. The answer, of course, is no.

The purpose of this policy brief is to look behind the press releases to examine the recent economic projections, review previous estimates, and put these seemingly large numbers in their proper context.  As before, the claims that developing countries will be the big winners from Doha rest on shaky assumptions, controversial economic modeling, misleading representations of the benefits, and disregard for the high costs of Doha-style liberalization for many developing countries

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