Round and Developing Countries:
Will the Doha deal do more harm than good?
Brief No. 22, April 2006 (download
By Timothy A. Wise and Kevin P. Gallagher
Will the hidden costs in the proposed WTO agreement
outstrip the limited gains predicted for most developing
countries? Timothy A. Wise and Kevin P. Gallagher
of Tufts Global Development and Environment Institute
use recent projections of different Doha scenarios
from the World Bank, UNCTAD, and others to assess
the benefits and costs for developing countries. Among
All projections of income gains
for developing countries as a group are modest,
well under one percent of GDP and less than a penny-a-day
Only a few countries capture the
bulk of the projected gains, with Brazil and China
among the winners. Some of the poorest countries
and regions, including Sub-Saharan Africa, see income
losses or trivial gains.
For many countries the loss of
tariff revenues with liberalization are greater
than the projected gains from a Doha agreement.
India, for example, would lose nearly $8 billion
in annual revenues from manufacturing tariffs, almost
four times the projected gains of $2.2 billion.
For the developing world as a whole, a projected
gain of just $7 billion would be swamped by $63
billion in losses from tariffs on manufactured goods.
Liberalization leads to de-industrialization
in some emerging economies, as some countries (Brazil)
gain in agriculture at the expense of manufacturing,
and others (India) lose high value-added manufacturing
for gains in less-technologically developed industries,
such as apparel.