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Assessing the potential cost of a failed Doha Round

Published online by Cambridge University Press:  08 April 2010

ANTOINE BOUET  and
David Laborde
ANTOINE BOUET*
Affiliation:
International Food Policy Research Institute, Washington DC, US, and Centre d'Analyse Théorique et de Traitement des données économiques, Pau, France
David Laborde*
Affiliation:
International Food Policy Research Institute, Washington DC, US
*
*Email: a.bouet@cgiar.org
**Email: d.laborde@cgiar.org
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Abstract

This study offers new conclusions on the economic cost of a failed Doha Development Agenda (DDA). We assess potential outcome of the Doha Round as well as four protectionist scenarios using the MIRAGE Computable General Equilibrium (CGE) model. In a scenario where applied tariffs of World Trade Organization (WTO) economies would go up to currently bound tariff rates, world trade would decrease by 9.9% and world welfare by US$353 billion. The economic cost of a failed DDA is here evaluated by the difference between a cooperative scenario (DDA) and a protectionist one (US$412 billion in terms of welfare). Another point of view is to compare a resort to protectionism when the DDA is implemented with a resort to protectionism when the DDA is not implemented. The findings show that this trade agreement could prevent the potential reduction of US$809 billion of trade and, therefore, acts as an efficient multilateral ‘preventive’ scheme against the adverse consequences of trade ‘beggar-thy-neighbor’ policies.

Type
Review Article
Information
World Trade Review , Volume 9 , Issue 2 , April 2010 , pp. 319 - 351
Copyright
Copyright © Antoine Bouet and David Laborde 2010

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