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Assessing the potential cost of a failed Doha Round

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  • BOUET, ANTOINE
  • Laborde, David

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.

Suggested Citation

  • BOUET, ANTOINE & Laborde, David, 2010. "Assessing the potential cost of a failed Doha Round," World Trade Review, Cambridge University Press, vol. 9(2), pages 319-351, April.
    • Handle: RePEc:cup:wotrrv:v:9:y:2010:i:02:p:319-351_99
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