Launched in 2001 and intended to be completed by 2004, the Doha Round of trade talks has now exceeded 10 years without any realistic prospect of a successful conclusion in the near future. While there is no dearth of studies surveying the processes involved and developments taking place, credible empirical assessments reflecting the actual progress made in the negotiation and deriving policy lessons based on them are few and far between. From that perspective, this book offers perhaps the most comprehensive analyses of the Doha Round covering such issues as the likely benefits of the draft agreements as they currently stand; potential implications of the modifications proposed; lessons learnt for future negotiations; and issues to consider for multilateral cooperation beyond Doha. The analyses presented in the volume's 15 chapters include both traditional issues - e.g., agricultural, non-agricultural market access and services – as well as the relatively new issues such as Aid for Trade, trade facilitation, and other critical trade-related matters not under consideration in the negotiations.
While assessing the potential benefits arising from the Round, the book presents new and improved methodological approaches, taking into account more disaggregated data than previously attempted. It shows that even after allowing for flexibilities associated with sensitive and special products, the Doha proposals would cut applied tariffs in agriculture and non-agricultural sectors by around 20%, with the agricultural proposals also including abolition of export subsidies and significant reductions in domestic support, particularly in the EU and the United States. The resultant welfare gains are estimated to be around $160 billion per year. This is argued to be a conservative estimate as the gains from reduced barriers to trade in services, improved trade facilitation, and the new policy disciplines are not accounted for. However, the analysis on services (Chapter 5) does show that the actual policy maintained by countries in all regions is more liberal than their respective commitments in the General Agreements on Trade in Services (GATS). Therefore, the current Doha offers do not provide any further liberalisation gains.
Since the applied tariffs are lower than the legally bound level of protection with the countries undertaking commitments to slash the latter, it is often difficult to appreciate the significance of the market access negotiations. In an interesting exercise, Chapter 12 shows that if countries were to raise their protection to their permissible WTO-binding levels, the cost in terms of foregone exports and income would be $1,300 billion and $300 billion, respectively. After the implementation of the Doha deal, such losses would fall to respectively $100 billion and $40 billion, thereby revealing that the benefits of policy bindings could potentially be enormous. In another exercise (Chapter 11), it is shown that agreeing to sectoral liberalisation could increase the real income gains significantly (by 66%–200%).
The analysis also confirms the concern that the poorest countries stand to gain very little from the Doha liberalisation scenarios. In fact, both the real income and export effects turn out to be negative for the group of least developed countries (LDCs). LDCs are not required to undertake any tariff cuts, yielding no significant gains from allocative efficiencies in their domestic economies. On the market access side, they already have tariff preferences in key markets (e.g. in the EU) and, as such, further global liberalisation would cause them to suffer from preference erosion. Furthermore, the proposed duty-free and quota-free (DFQF) scheme only offers such access to 97% tariff lines in markets where currently 100% access is not granted. A very high degree of export concentration, which is a characteristic feature of LDCs, would imply that the 3% exclusion could not provide any additional market access. Trade-distorting domestic support measures in the developed countries remain unabated, adversely affecting the cotton growing LDCs, an issue that arose very prominently during the Round apparently without impact. On the whole, therefore, the potential gains from the Doha Round do not promise much for the world's poorest countries (this perhaps justifies the omission of “development” in the title of the book, keeping it simply ‘the WTO's Doha Agenda’!). The benefits to these countries would be limited to effective implementation of Aid for Trade support and any trade facilitation agreement.
The book draws several interesting and useful lessons for future negotiations. It points out that the ‘political costs’ of sharp reductions of the highest tariffs could be higher than the related efficiency gains from lowering protection. It also highlights how the limited WTO disciplines in export restrictions could impede world markets' functioning as reliable source of food supplies. Finally, the book takes the view that the long running of the Doha Round does not help the multilateral trading system adapt to the new realities. It identifies, amongst others, food and energy security, exchange rate management practices, and climate change as several critical trade-related matters that remain outside the Doha Agenda arguing that multilateral cooperation must be responsive to these current prominent issues.
By striking a balance between the need for placing unavoidable technical material and making the content accessible to wider audience, the rich analysis presented in the book is likely to be a valuable source of reference to various stakeholders. If anything, some readers might long for an analysis of the effect on the negotiation of ever growing significance of several large developing countries in the global economy, which has coincided with the (lack of) progress of the Doha Round. Some discussion on the possible ways of operationalizing a waiver mechanism allowing WTO members to grant preferential treatment to service suppliers originating in LDC members would also have been very useful.
