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Why Isn’t the Doha Development Agenda More Poverty Friendly?

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  • Hertel, Thomas
  • Keeney, Roman
  • Ivanic, Maros
  • Winters, Alan

Abstract

The breakdown of the WTO negotiations under the Doha Development Agenda has inspired critics to highlight the lack of effort on the part of rich countries to reform their agricultural policies. In this paper, we focus instead the poverty impacts of developing country tariff cuts - particularly those in agriculture. We argue that the Doha Development Agenda is fundamentally less poverty-friendly than it could be -- in large part due to the absence of tariff cuts on staple food products in developing countries. Such cuts would give the poor access to food at world prices, thereby reducing the cost of living at the poverty line. We also explore the contention that such tariff cuts will hurt the poor working in agriculture. Based on our analysis of the impacts of multilateral trade policy reforms on a sample of fifteen developing countries, we find there is some evidence of poverty increases in agriculture. However, such effects are minimized by ensuring that agricultural tariffs are cut in all developing countries. Overall, the poverty-reducing impact of lower food prices dominates; we conclude that the Doha Development Agenda would be more poverty friendly if it were to include deeper cuts in developing country agricultural tariffs. This contrasts sharply with calls for special products exemptions by many developing country advocates.

Suggested Citation

  • Hertel, Thomas & Keeney, Roman & Ivanic, Maros & Winters, Alan, 2007. "Why Isn’t the Doha Development Agenda More Poverty Friendly?," GTAP Working Papers 2292, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  • Handle: RePEc:gta:workpp:2292
    Note: GTAP Working Paper No. 37
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    File URL: https://www.gtap.agecon.purdue.edu/resources/res_display.asp?RecordID=2292
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    References listed on IDEAS

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    1. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters,in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314 World Scientific Publishing Co. Pte. Ltd..
    2. Thomas W. Hertel & Roman Keeney & Maros Ivanic & L. Alan Winters, 2007. "Distributional effects of WTO agricultural reforms in rich and poor countries," Economic Policy, CEPR;CES;MSH, vol. 22, pages 289-337, April.
    3. Will Martin & Kym Anderson, 2006. "Agricultural Trade Reform and the Doha Development Agenda," World Bank Publications, The World Bank, number 6889, November.
    4. Hertel, Thomas W. & Maros Ivanic & Paul Preckel & John Cranfield, 2004. "The Earnings Effects of Multilateral Trade Liberalization: Implications for Poverty in Developing Countries," GTAP Working Papers 1208, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    5. J. A. L. Cranfield & James S. Eales & Thomas W. Hertel & Paul V. Preckel, 2003. "Model selection when estimating and predicting consumer demands using international, cross section data," Empirical Economics, Springer, vol. 28(2), pages 353-364, April.
    6. Thomas W. Hertel & Jeffrey J. Reimer, 2006. "Predicting the Poverty Impacts of Trade Reform," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 2, May.
    7. Thomas W. Hertel & Maros Ivanic & Paul V. Preckel & John A. L. Cranfield, 2004. "The Earnings Effects of Multilateral Trade Liberalization: Implications for Poverty," World Bank Economic Review, World Bank Group, vol. 18(2), pages 205-236.
    8. Bernard Hoekman & Francis Ng & Marcelo Olarreaga, 2004. "Agricultural Tariffs or Subsidies: Which Are More Important for Developing Economies?," World Bank Economic Review, World Bank Group, vol. 18(2), pages 175-204.
    9. Thomas W. Hertel & L. Alan Winters, 2006. "Poverty and the WTO : Impacts of the Doha Development Agenda," World Bank Publications, The World Bank, number 7411, November.
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    Cited by:

    1. Hertel, Thomas, 2013. "Global Applied General Equilibrium Analysis Using the Global Trade Analysis Project Framework," Handbook of Computable General Equilibrium Modeling, Elsevier.
    2. Richard S J Tol, 2018. "The Economic Impacts of Climate Change," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 12(1), pages 4-25.
    3. ., 2012. "Socio-economic impact of regional transport infrastructure in the Greater Mekong Subregion," Chapters,in: Infrastructure for Asian Connectivity, chapter 4, pages 95-138 Edward Elgar Publishing.
    4. Rada, Nicholas E. & Rosen, Stacey & Beckman, Jayson F., 2013. "Evaluating Agricultural Productivity’s Impact on Food Security," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149548, Agricultural and Applied Economics Association.
    5. Willem Thorbecke & Biswa N. Bhattacharyay, 2012. "Role of Production Networks in Sustaining and Rebalancing Asia's Growth," CESifo Working Paper Series 3896, CESifo Group Munich.
    6. Marvuglia, Antonino & Benetto, Enrico & Rege, Sameer & Jury, Colin, 2013. "Modelling approaches for consequential life-cycle assessment (C-LCA) of bioenergy: Critical review and proposed framework for biogas production," Renewable and Sustainable Energy Reviews, Elsevier, vol. 25(C), pages 768-781.
    7. Stone, Susan & Strutt, Anna & Hertel, Thomas, 2010. "Assessing Socioeconomic Impacts of Transport Infrastructure Projects in the Greater Mekong Subregion," ADBI Working Papers 234, Asian Development Bank Institute.
    8. Narayanan, Badri G. & Hertel, Thomas W. & Horridge, J. Mark, 2010. "Disaggregated data and trade policy analysis: The value of linking partial and general equilibrium models," Economic Modelling, Elsevier, vol. 27(3), pages 755-766, May.
    9. Sandra Polaski et al, 2008. "Policy dilemmas in India: The Impact of changes in agricultural prices on rural and urban poverty," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2008-012, Indira Gandhi Institute of Development Research, Mumbai, India.
    10. L. Alan Winters & Antonio Martuscelli, 2014. "Trade Liberalization and Poverty: What Have We Learned in a Decade?," Annual Review of Resource Economics, Annual Reviews, vol. 6(1), pages 493-512, October.
    11. Monika Verma & Thomas W. Hertel & Ernesto Valenzuela, 2011. "Are The Poverty Effects of Trade Policies Invisible?," World Bank Economic Review, World Bank Group, vol. 25(2), pages 190-211, May.
    12. Syud Amer Ahmed & Noah S. Diffenbaugh & Thomas W. Hertel & William J. Martin, 2012. "Agriculture and Trade Opportunities for Tanzania: Past Volatility and Future Climate Change," Review of Development Economics, Wiley Blackwell, vol. 16(3), pages 429-447, August.
    13. Verma, Monika & Hertel, Thomas W. & Preckel, Paul V., 2011. "Predicting within country household food expenditure variation using international cross-section estimates," Economics Letters, Elsevier, vol. 113(3), pages 218-220.
    14. van Ruijven, Bas J. & O’Neill, Brian C. & Chateau, Jean, 2015. "Methods for including income distribution in global CGE models for long-term climate change research," Energy Economics, Elsevier, vol. 51(C), pages 530-543.
    15. Hertel, Thomas W. & Keeney, Roman, 2009. "The Poverty Impacts of Global Commodity Trade Liberalization," Agricultural Distortions Working Paper Series 52786, World Bank.
    16. Filipski, Mateusz & Edward Taylor, J. & Msangi, Siwa, 2011. "Effects of Free Trade on Women and Immigrants: CAFTA and the Rural Dominican Republic," World Development, Elsevier, vol. 39(10), pages 1862-1877.
    17. Nyhodo, Bonani & Punt, Cecilia & Vink, Nick, 2009. "The potential impact of the Doha Development Agenda on the South African economy: liberalising OECD agriculture and food trade," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 0(Issue 1), pages 1-23, March.
    18. Devarajan, Shantayanan & Robinson, Sherman, 2013. "Contribution of Computable General Equilibrium Modeling to Policy Formulation in Developing Countries," Handbook of Computable General Equilibrium Modeling, Elsevier.

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F10 - International Economics - - Trade - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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