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Why is the Doha Development Agenda Failing? And What Can Be Done? A Computable General Equilibrium–Game Theoretical Approach

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  • Antoine Bouët
  • David Laborde

Abstract

We use a world computable general equilibrium model to simulate 143 potential trade reforms and seek solutions to the issues hampering progress in the Doha Development Agenda (DDA). Inside the domain defined by all these possible outcomes, we apply the axiomatic theory of bargaining and select the Nash solution of cooperative games. The solutions vary according to the objective functions adopted by the trade negotiators. When real income is the objective and services are excluded, or when optimising terms of trade is the objective, the Nash solution is the status quo. Trade liberalisation is feasible only when the negotiators focus on national exports or gross domestic product (GDP). Our assessment of some possible solutions reveals that excluding members having a GDP below a certain threshold improves the bargaining process, regardless of the governments’ objective. Formation of coalition, such as the G20, constitutes an option for its members to block outcomes imposed by rich members. We also find that side payments may be a solution, but represent a very high share of the global income gain.

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  • Antoine Bouët & David Laborde, 2010. "Why is the Doha Development Agenda Failing? And What Can Be Done? A Computable General Equilibrium–Game Theoretical Approach," The World Economy, Wiley Blackwell, vol. 33(11), pages 1486-1516, November.
    • Handle: RePEc:bla:worlde:v:33:y:2010:i:11:p:1486-1516
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    1. Beckman, Jayson & Ivanic, Maros & Shaik, Saleem, 2022. "How Bilateral Trade Deals Get in the Way of Multilateral Agreements," Conference papers 333437, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Hilel Hamadache & Sophie S. Drogue, 2014. "Staple food market regulation in Algeria, what is the alternative policy? A CGE analysis for wheat," Post-Print hal-02795719, HAL.
    3. Yvan Decreux & Lionel Fontagné, 2014. "What next for the DDA? Quantifying the role of negotiation modalities," RSCAS Working Papers 2014/61, European University Institute.
    4. Bouet, Antoine & Laborde, David, 2010. "Eight Years of Doha Trade Talks: Where Do We Stand?," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 11(2), pages 1-22, August.
    5. Florian Freund, 2021. "The role of coalitions at international tariff negotiations: a CGE perspective," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 157(3), pages 583-601, August.
    6. Guimbard, Houssein & Le Goff, Maëlan, 2014. "Mega Deals: What Consequences for sub-Saharan Africa?," Conference papers 332514, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Laborde Debucquet, David & Martin, Will, 2017. "Formulas for failure? Were the Doha tariff formulas too ambitious for success?:," IFPRI book chapters, in: Bouët, Antoine & Laborde Debucquet, David (ed.), Agriculture, development, and the global trading system: 2000– 2015, chapter 4, International Food Policy Research Institute (IFPRI).
    8. Yvan Decreux & Lionel Fontagné, 2013. "What Did Happen in the DDA? Quantifying the Role of Negotiation Modalities," Working Papers 2013-38, CEPII research center.
    9. Decreux, Yvan & Fontagné, Lionel, 2015. "What Next for Multilateral Trade Talks? Quantifying the Role of Negotiation Modalities," World Trade Review, Cambridge University Press, vol. 14(1), pages 29-43, January.
    10. Antoine Bouet & David Laborde, 2010. "Eight Years of Doha Trade Talks: Where Do We Stand?," Larefi Working Papers 201003, Larefi, Université Bordeaux 4.

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