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WTO's Doha Cotton Initiative: A Tale of Two Issues

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  • Anderson, Kym
  • Valenzuela, Ernesto

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 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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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5567.

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Date of creation: Mar 2006
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Handle: RePEc:cpr:ceprdp:5567

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

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  1. Anderson, Kym & Martin, William J., 2007. "Distortions to Agricultural Incentives in Asia," Agricultural Distortions Working Paper 48557, World Bank.
  2. Kym Anderson & Lee Ann Jackson, 2005. "Some Implications of GM Food Technology Policies for Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 14(3), pages 385-410, September.
  3. Kym Anderson & Will Martin, 2005. "Agricultural Trade Reform and the Doha Development Agenda," The World Economy, Wiley Blackwell, vol. 28(9), pages 1301-1327, 09.
  4. Anderson, Kym & Martin, Will & van der Mensbrugghe, Dominique, 2005. "Would Multilateral Trade Reform Benefit Sub-Saharan Africans?," CEPR Discussion Papers 5049, C.E.P.R. Discussion Papers.
  5. John Baffes, 2005. "The "Cotton Problem"," World Bank Research Observer, World Bank Group, vol. 20(1), pages 109-144.
  6. Anderson, Kym & Martin, Will & Valenzuela, Ernesto, 2006. "The relative importance of global agricultural subsidies and market access," World Trade Review, Cambridge University Press, vol. 5(03), pages 357-376, November.
  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. 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.
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Cited by:
  1. Baffes, John, 2007. "Distortions to Cotton Sector Incentives in West and Central Africa," Agricultural Distortions Working Paper 48526, World Bank.
  2. 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).
  3. 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).
  4. 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.
  5. Ernesto Valenzuela & Kym Anderson & Thomas Hertel, 2007. "Impacts of Trade Reform: Sensitivity of Model Results to Key Assumptions," Centre for International Economic Studies Working Papers 2007-09, University of Adelaide, Centre for International Economic Studies.
  6. 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.
  7. Baffes, John, 2011. "Cotton, biotechnology, and economic development," Policy Research Working Paper Series 5896, The World Bank.
  8. 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).
  9. 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.

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