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

  • Kym Anderson

    ()

    (School of Economics, University of Adelaide)

  • Ernesto Valenzuela

    ()

    (School of Economics, University of Adelaide)

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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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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  1. 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.
  2. Anderson, Kym & Martin, Will, 2005. "Agricultural trade reform and the Doha development agenda," Policy Research Working Paper Series 3607, The World Bank.
  3. Kym Anderson & Will Martin, 2009. "Distortions to Agricultural Incentives in Asia," World Bank Publications, The World Bank, number 2611, April.
  4. 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.
  5. 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.
  6. John Baffes, 2005. "The "Cotton Problem"," World Bank Research Observer, World Bank Group, vol. 20(1), pages 109-144.
  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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