Doha Round and Developing Countries: Will the Doha deal do more harm than good?

As WTO negotiators miss yet another deadline for concluding world trade talks, developing country negotiators are no doubt asking themselves if they might be better off with no deal at all. According to a new policyreport by Tufts University researchers, they have good reason to question the agreement, as hidden costs may well outstrip the limited gains predicted for most countries.

The new report, 'Doha Round and Developing Countries: Will the Doha deal do more harm than good?' was just released by the Indian think tank RIS, the Research and Information System for Developing Countries. Timothy A.Wise and Kevin P. Gallagher of Tufts Global Development and Environment Institute use recent projections of different Doha scenarios from the World Bank, UNCTAD, and others to assess the benefits and costs fordeveloping countries. Among their findings:

All projections of income gains for developing countries as a group are modest, well under one percent of GDP and less than a penny-a-day per person. Only a few countries capture the bulk of the projected gains, withBrazil and China among the winners.

Some of the poorest countries and regions, including Sub-Saharan Africa, see income losses or trivial gains. For many countries the loss of tariff revenues with liberalization are greater than the projected gains from aDoha agreement. India, for example, would lose nearly $8 billion in annual revenues from manufacturing tariffs, almost four times the projected gains of $2.2 billion.

For the developing world as a whole, a projected gain of just $7 billion would be swamped by $63 billion in losses from tariffs on manufactured goods.

Liberalization leads to de-industrialization in some emerging economies, as some countries (Brazil) gain in agriculture at the expense of manufacturing, and others (India) lose high value-added manufacturing forgains in less- technologically developed industries, such as apparel.

The authors call for a re-examination of the proposed agreement in light of the WTO's current mandate to foster broad-based development. For many governments, the balance sheet on the Doha deal may well be negative.

Download 'Doha Round and Developing Countries: Will the Doha deal do more harm than good?'

http://www.ase.tufts.edu/gdae/Pubs/rp/HiddenCostsApr06.htm

See RIS Policy Briefs: http://www.ris.org.in

See other analyses of the Doha Round by GDAE:
http://www.ase.tufts.edu/gdae/policy_research/WTO05.htm

See more on GDAE's Globalization and Sustainable Development Program:
http://www.ase.tufts.edu/gdae/policy_research/globalization.html