The Shrinking Gains from Trade: A Critical Assessment of Doha Round Projections

The World Bank has just released its new projections of the possible gains from further trade liberalization, and the results may alarm those hoping the upcoming round of World Trade Organization negotiations will deliver on their promise of development. Where just two years ago the Bank was projecting more than $500 billion in developing country gains from trade, 80% of those supposed gains now are gone. Frank Ackerman, Research Director at the Global Development and Environment Institute at Tufts University, offers a critical review of the new economic modeling results, putting them in context, analyzing the reliability of the models, and explaining why the prospective gains are so low.

The new World Bank projections show:

• 70% of the gains would go to developed countries, up from 40% in 2003;
• a small number of the largest developing countries would capture most of the developing country benefits;
• in a