Analysis: Can Doha Round Still Help Poor Nations?
The gains promised by a successful outcome to world trade talks are being hotly debated as some economists suggest they could be dramatically lower than first predicted and leave some poor nations losers, writes the World Bank press review Friday.
Changes in the world economy, such as China joining the World Trade Organization and the expansion of the European Union, mean the economic gains from lowering trade barriers must be shared among more countries, some researchers say. That means some of the worlds poorest countries, including African nations, could be left with little, they argue.
The World Bank estimated in a report last month that 287 billion US dollar could be gained from global trade liberalization, which would lift 66 million people out of poverty. Developing countries would reap 86 billion dollar of the total gains, it said.
The models on which the research was based differ from previous ones and include Chinas accession to the WTO and the expansion of the European Union. As a result, the latest numbers are sharply lower than those offered by the bank two years ago.
Will Martin, co-author of the World Bank report, said previous research was quoted out of context and the numbers were lower partly because some reforms already took place.
The 287 billion dollar figure for total gains quoted in the new report did not take productivity growth into account. So the comparable figure from the 2003 report would be $355 billion.
– The estimated benefits have declined partly because developing countries have liberalized a great deal and reduced poverty in their own countries. So quite a bit of reform has already happened, said Martin, lead economist for the Banks development research group.
Another expert said the talks are more important for what they can achieve in making trade fairer: – For us, the issue has always been the rules and the fairness of them. These models are instructive but not decisive and they can be wrong, said Gawain Kripke, senior policy adviser at Oxfam in Washington.
Meanwhile, prospects for a breakthrough in stalled world trade talks at next month’s summit in Hong Kong receded further Thursday as details emerged of the draft texts being prepared for the summit which showed no progress has been made.
Drafts on the three main areas of negotiations – agriculture, services and industrial goods – mainly reflect disagreement and division. Only in services is there a draft text. The other two are merely reports on where negotiations stand. They will feed into an overall draft prepared by WTO chief Pascal Lamy.
Further, the African Union (AU) on Wednesday adopted an Arusha Declaration and Plan of Action on Commodities to coordinate member states stance on the coming WTOs Hong Kong round of negotiations.
The trade ministers endorsed the draft declaration worked out by their senior aides prior to Wednesdays ministerial, stressing that it is commodity dependence characterized by low productivity, low added value, low product quality and low competitiveness that hinders the achievement of the required level of economic growth and poverty alleviation.
The Arusha declaration welcomes a WTO consideration in Hong Kong of effective and expeditious reduction in subsidies by developed countries in cotton, sugar and all other commodity products of interest to developing countries apart from announcing that the African countries need flexibility and policy space under the WTO multilateral trade rules to choose the most effective strategy appropriate to the African situation.
Kilde: www.worldbank.org
