Trade Issues in the Doha Round: Dispelling Some Misconceptions

IMF Policy Discussion Papers, August 1, 2006

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Trade Issues in the Doha Round: Dispelling Some Misconceptions

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Bibliographic details

• Authors: Stephen Tokarick
• Published: August 1, 2006
• Series: IMF Policy Discussion Papers
• DOI: https://doi.org/10.5089/9781451946161.003

Executive summary and central arguments

• The Doha Round presents an opportunity for countries to reap the benefits of trade liberalization.
• A number of misconceptions about the likely impact of trade reforms have impeded more rapid progress toward completion of the Round.
• The paper addresses several key misconceptions and presents IMF research findings that clarify them, arguing specifically that:
  • developing countries have much to gain from their own trade liberalization;
  • preference erosion could be significant for some countries, but it is not a justification for postponing tariff reductions;
  • tariffs applied against agricultural products in rich countries actually harm developing countries more than subsidies; and
  • a disproportionate share of agricultural subsidies in rich countries goes to large wealthy farmers.

Major findings and evidence-based points

• Developing-country benefits:
  • Developing countries obtain substantial gains from undertaking their own trade liberalization.
• Preference erosion:
  • Preference erosion could be significant for some countries.
  • Nonetheless, preference erosion is not presented as a valid justification for delaying tariff reductions.
• Agriculture and trade policy in rich countries:
  • Tariffs on agricultural products in rich countries harm developing countries more than subsidies do.
  • A disproportionate share of agricultural subsidies in rich countries accrues to large wealthy farmers.

Policy implications and recommendations

• Proceed with multilateral trade liberalization in the Doha Round rather than postponing reductions on account of concerns about preference erosion.
• Emphasize domestic liberalization efforts by developing countries to capture direct gains from trade reform.
• Address agricultural protection in rich countries—with attention to both tariffs and subsidy distribution—to reduce negative impacts on developing-country exporters.
• Consider distributional effects of agricultural subsidies within rich countries, given the finding that a disproportionate share benefits large wealthy farmers.

Key publication information and identifiers

• Author: Stephen Tokarick
• Publication date: August 1, 2006
• Pages: 24
• Volume: 2006
• Issue: 004
• Series: Policy Discussion Paper No. 2006/004
• DOI: https://doi.org/10.5089/9781451946161.003
• Stock No: PPIEA2006004
• ISBN: 9781451946161
• ISSN: 1564-5193

Subjects and keywords (as provided)

• Subjects: Export subsidies, Exports, Imports, International trade, National accounts, Personal income, Tariffs, Taxes
• Keywords include: country, country benefit, developing countries, EU Commissioner, EU consumer, EU market, export, Export subsidies, Exports, government payment, import tariff, importing country, Imports, OECD countries harm, OECD country, payment, PDP, Personal income, preference erosion, preference scheme, Sub-Saharan Africa, subsidies, subsidy, tariff reduction, tariffs, Trade liberalization

Source: IMF Policy Discussion Paper "Trade Issues in the Doha Round: Dispelling Some Misconceptions" by Stephen Tokarick, August 1, 2006.

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