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WTOÂ’s Doha Cotton Initiative: A Tale of Two Issues

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  • Kym Anderson

    ()
    (School of Economics, University of Adelaide)

  • Ernesto Valenzuela

    ()
    (School of Economics, University of Adelaide)

Abstract

Four West African nations have demanded the WTO’s Doha Development Agenda include a Cotton Initiative that involves two issues: cutting cotton subsidies and tariffs, and assisting farm productivity growth in Africa. This paper provides estimates of the potential economic impacts of (a) complete or partial removal of cotton subsidies and import tariffs globally and (b) cotton productivity growth through the adoption of genetically modified (GM) cotton varieties. Use is made of the latest version of the GTAP database and model. Our results confirm that – unlike for other agricultural subsidies and tariffs – for cotton it is subsidy reductions rather than tariff cuts that would make by far the largest impact. For Sub-Saharan Africa the potential gains are huge relative to the effects on them of reforming other merchandise trade policies. And they could be more than doubled if that reform provided the cash for farmers to take advantage of the biotechnology revolution and adopt GM cotton varieties. But those potential gains, and the affordability of switching to costly GM seed, depend crucially on the extent to which high-income countries are willing to lower domestic support to their cotton farmers.

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File URL: http://www.adelaide.edu.au/cies/papers/0706.pdf
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Bibliographic Info

Paper provided by University of Adelaide, Centre for International Economic Studies in its series Centre for International Economic Studies Working Papers with number 2007-06.

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Length: 45 pages
Date of creation: Sep 2007
Date of revision:
Handle: RePEc:adl:cieswp:2007-06

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Keywords: subsidy and tariff reform; computable general equilibrium modeling; economic welfare; GMOs; cotton biotechnology;

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References

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  1. Kym Anderson & Will Martin, 2005. "Agricultural Trade Reform and the Doha Development Agenda," Centre for International Economic Studies Working Papers 2005-17, University of Adelaide, Centre for International Economic Studies.
  2. Anderson, Kym & Martin, Will & van der Mensbrugghe, Dominique, 2005. "Would multilateral trade reform benefit Sub-Saharan Africans?," Policy Research Working Paper Series 3616, The World Bank.
  3. Kym Anderson & Lee Ann Jacskon, 2004. "Some Implications of GM Food Technology Policies for Sub-Saharan Africa," Centre for International Economic Studies Working Papers 2004-09, University of Adelaide, Centre for International Economic Studies.
  4. Anderson, Kym & Martin, Will & Valenzuela, Ernesto, 2006. "The relative importance of global agricultural subsidies and market access," Policy Research Working Paper Series 3900, The World Bank.
  5. Anderson, Kym & Jackson, Lee Ann & Valenzuela, Ernesto, 2006. "GM Cotton Adoption, Recent and Prospective: A Global CGE Analysis of Economic Impacts," CEPR Discussion Papers 5568, C.E.P.R. Discussion Papers.
  6. Anderson, Kym & Martin, William J., 2007. "Distortions to Agricultural Incentives in Asia," Agricultural Distortions Working Paper 48557, World Bank.
  7. Huang, Jikun & Rozelle, Scott & Martin, William J. & Liu, Yu, 2007. "Distortions to Agricultural Incentives in China," Agricultural Distortions Working Paper 48478, World Bank.
  8. Harald Grethe, 2006. "Agricultural Trade Reform and the Doha Development Agenda," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 33(4), pages 591-595, December.
  9. John Baffes, 2005. "The "Cotton Problem"," World Bank Research Observer, World Bank Group, vol. 20(1), pages 109-144.
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Citations

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Cited by:
  1. Ernesto Valenzuela & Kym Anderson & Thomas Hertel, 2008. "Impacts of trade reform: sensitivity of model results to key assumptions," International Economics and Economic Policy, Springer, vol. 4(4), pages 395-420, February.
  2. Baffes, John, 2011. "Cotton, biotechnology, and economic development," Policy Research Working Paper Series 5896, The World Bank.
  3. Blasco, Lorea Barron & Devadoss, Stephen & Stodick, Leroy, 2006. "The Doha Round Declaration on Cotton: A Catalyst for Poverty Reduction in Africa?," 2006 Annual meeting, July 23-26, Long Beach, CA 21161, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  4. Valenzuela, Ernesto & Hertel, Thomas W., 2006. "Poverty Vulnerability and Trade Policy: Are the Likely Impacts Discernable?," 2006 Annual meeting, July 23-26, Long Beach, CA 21397, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  5. Martin, William J. & Anderson, Kym, 2008. "Agricultural trade reform under the Doha Agenda: some key issues," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(1), March.
  6. Baffes, John, 2007. "Distortions to Cotton Sector Incentives in West and Central Africa," Agricultural Distortions Working Paper 48526, World Bank.
  7. Anderson, Kym & Jackson, Lee Ann & Valenzuela, Ernesto, 2006. "GM Cotton Adoption, Recent and Prospective: A Global CGE Analysis of Economic Impacts," CEPR Discussion Papers 5568, C.E.P.R. Discussion Papers.
  8. Baquedano, Felix G. & Sanders, John H. & Vitale, Jeffrey, 2010. "Increasing incomes of Malian cotton farmers: Is elimination of US subsidies the only solution?," Agricultural Systems, Elsevier, vol. 103(7), pages 418-432, September.
  9. Baquedano, Felix G. & Sanders, John H., 2008. "Increasing Cotton Farmers Incomes in Mali West Africa: Eliminate Subsidies in Developed Countries or Productivity Increase in Mali?," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6426, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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