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Assessing the potential cost of a failed Doha round

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  • Antoine Bouet

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 7.7 % 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

  • Antoine Bouet, 2010. "Assessing the potential cost of a failed Doha round," Larefi Working Papers 201001, Larefi, Université Bordeaux 4.
    • Handle: RePEc:laf:wpaper:201001
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    References listed on IDEAS

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    Cited by:

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    2. Popa, Diana, 2011. "Runda Doha: început fără sfârşit [Doha Round: the endless beginning]," MPRA Paper 28764, University Library of Munich, Germany, revised 09 Feb 2011.
    3. Emanuele Ferrari & Thomas Chatzopoulos & Ignacio Perez Dominguez & Pierre Boulanger & Kirsten Boysen-Urban & Mihaly Himics & Robert M’barek, 2021. "Cumulative economic impact of trade agreements on EU agriculture: 2021 update," JRC Research Reports JRC123037, Joint Research Centre.
    4. Wolfe, Robert, 2010. "Endogenous Learning and Consensual Understanding in Multilateral Negotiations: Arguing and Bargaining in the WTO," Working Papers 90885, Canadian Agricultural Trade Policy Research Network.

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    More about this item

    Keywords

    trade negotiations; CGE modeling; bound duties; domestic support;
    All these keywords.

    JEL classification:

    • 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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