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The Doha Round Declaration on Cotton: A Catalyst for Poverty Reduction in Africa?

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  • Blasco, Lorea Barron
  • Devadoss, Stephen
  • Stodick, Leroy
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    Abstract

    Cotton plays a strategic role in the development policies and poverty reduction programs of a number of African countries. Several African countries have introduced reforms in the cotton sector to improve its quality and competitiveness. The impact of these reforms has to date been virtually nullified by the fact that certain WTO Members continue to apply support measures and subsidies that distort global market prices. These are the arguments behind the Cotton Initiative raised in 2003 in the World Trade Organization (WTO) by Benin, Burkina Faso, Chad and Mali, which reflects the position of the African Group countries until the Sixth WTO Ministerial Conference in Hong Kong recently. In this conference two important policy changes were agreed in international trade of cotton. First, all forms of export subsidies for cotton will be eliminated by developed countries in 2006. Second, developed countries will give duty and quota free access for cotton exports from the least-developed countries (LDCs). This paper uses a computable general equilibrium (CGE) model of the Zambian economy with a three fold purpose: (a) to study the impact of the Doha Round agreement on the cotton sector in Zambia, (b) to analyze the reality of the Doha agreement versus the African countries’' cotton initiative during the WTO Hong Kong conference, and (c) to contribute to the analysis of further agricultural trade liberalization and its implications for poor countries. The results show the extent of the benefits of implementation of both, the Doha WTO Round and the African Countries Proposal in Zambia. We quantify the impacts of both policy initiatives on the Zambian cotton sector (production, exports, prices), and agrarian population welfare. The results show that the positive effects of the Cotton Initiative in Zambia are higher than the Doha Round polices benefits.

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    Bibliographic Info

    Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2006 Annual meeting, July 23-26, Long Beach, CA with number 21161.

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    Date of creation: 2006
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    Handle: RePEc:ags:aaea06:21161

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    Keywords: International Relations/Trade;

    References

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    1. Gillson, I & Poulton, Colin & Balcombe, Kelvin & Page, S, 2004. "Understanding the impact of Cotton Subsidies on developing countries," MPRA Paper 15373, University Library of Munich, Germany.
    2. Anderson, Kym & Martin, Will & van der Mensbrugghe, Dominique, 2005. "Global impacts of Doha trade reform scenarios on poverty," Policy Research Working Paper Series 3735, The World Bank.
    3. Balat, Jorge F. & Porto, Guido G., 2005. "The WTO Doha Round, cotton sector dynamics, and poverty trends in Zambia," Policy Research Working Paper Series 3697, The World Bank.
    4. John Baffes, 2005. "The "Cotton Problem"," World Bank Research Observer, World Bank Group, World Bank Group, vol. 20(1), pages 109-144.
    5. Kym Anderson & Ernesto Valenzuela, 2007. "WTOÂ’s Doha Cotton Initiative: A Tale of Two Issues," Centre for International Economic Studies Working Papers, University of Adelaide, Centre for International Economic Studies 2007-06, University of Adelaide, Centre for International Economic Studies.
    6. Bruce A. Babcock & John C. Beghin & Jacinto F. Fabiosa & Stephane De Cara & Amani Elobeid & Cheng Fang & Chad E. Hart & Murat Isik & Holger Matthey & Alexander E. Saak & Karen Kovarik & FAPRI Staff, 2002. "Doha Round of the World Trade Organization: Appraising Further Liberalization of Agricultural Markets, The," Center for Agricultural and Rural Development (CARD) Publications 02-wp317, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    7. Lofgren, Hans & Thurlow, James & Robinson, Sherman, 2004. "Prospects for growth and poverty reduction i n Zambia, 2001-2015," DSGD discussion papers 11, International Food Policy Research Institute (IFPRI).
    8. Ben Shepherd, 2005. "The Impact of US Subsidies on the World Cotton Market: A Reassessment," International Trade, EconWPA 0511012, EconWPA.
    9. Thurlow, James & Wobst, Peter, 2004. "The road to pro-poor growth in Zambia," DSGD discussion papers 16, International Food Policy Research Institute (IFPRI).
    10. Hausner, Ulrich, 1999. "A 1995 social accounting matrix for Zambia:," TMD discussion papers 49, International Food Policy Research Institute (IFPRI).
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