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The Challenge of Reducing Subsidies and Trade Barriers

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  • Anderson, Kym

Abstract

This is one of ten studies for the Copenhagen Consensus Project that sought to evaluate the most feasible opportunities to improve welfare globally and alleviate poverty in developing countries. It argues that phasing out distortionary government subsidies and barriers to international trade will yield an extraordinarily high benefit/cost ratio. A survey is provided of recent estimates, using global economy wide simulation models, of the benefits of doing that via the current Doha round of multilateral trade negotiations. Even if adjustment costs are several times as large as suggested by available estimates, the benefit-cost ratio from seizing this opportunity exceeds 20. That is much higher than the rewards from regional or bilateral trade agreements or from providing preferential access for least-developed countries’ exports to high-income countries. Such reform would simultaneously contribute to alleviating several of the other key challenges reflected in the United Nations’ Millennium Development Goals.

Suggested Citation

  • Anderson, Kym, 2004. "The Challenge of Reducing Subsidies and Trade Barriers," CEPR Discussion Papers 4592, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:4592
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    Cited by:

    1. Nawaz Ahmad & Saqib Amin, 2020. "Does ethnic polarization stimulate or relegate trade and environmental performance? A global perspective," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(7), pages 6513-6536, October.
    2. Jayatilleke S. Bandara, 2007. "The Effects of Agricultural Trade Liberalisation under the Doha Development Agenda with Special Reference to the Asia Pacific Region: A Brief Survey," Working Papers 3107, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    3. Tony Addison, 2005. "Post-Conflict Recovery: Does the Global Economy Work for Peace?," WIDER Working Paper Series DP2005-05, World Institute for Development Economic Research (UNU-WIDER).
    4. Alvarez, Fernando & Lucas, Robert Jr., 2007. "General equilibrium analysis of the Eaton-Kortum model of international trade," Journal of Monetary Economics, Elsevier, vol. 54(6), pages 1726-1768, September.
    5. Moshirian, Fariborz, 2005. "Global financial markets integration and Millennium Goals," Journal of Multinational Financial Management, Elsevier, vol. 15(4-5), pages 302-313, October.
    6. Jayatilleke S. Bandara, 2007. "The Effects of Agricultural Trade Liberalisation under the Doha Development Agenda with Special Reference to the Asia Pacific Region: A Brief Survey," ARTNeT Working Papers 31, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    7. Konov, Joshua Ioji / JK, 2013. "Enhancing Markets (i.e. Economies) Transmissionability to Optimize Monetary Policies’ Effect," MPRA Paper 46950, University Library of Munich, Germany.
    8. Jean‐Christophe Bureau & Raja Chakir & Jacques Gallezot, 2007. "The Utilisation of Trade Preferences for Developing Countries in the Agri‐food Sector," Journal of Agricultural Economics, Wiley Blackwell, vol. 58(2), pages 175-198, June.
    9. Tony Addison, 2005. "Agricultural Development for Peace," WIDER Working Paper Series RP2005-07, World Institute for Development Economic Research (UNU-WIDER).
    10. Gawel, Erik & Bernsen, Kristina, 2011. "What is wrong with virtual water trading?," UFZ Discussion Papers 1/2011, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).

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    More about this item

    Keywords

    Doha Development Agenda; subsidy reduction; trade policy reform;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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