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Doha Round and Developing Countries:
Will the Doha deal do more harm than good?
RIS Policy Brief No. 22, April 2006 (download pdf)

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 their findings:

  • 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 per person.
  • 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.

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