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Production-weighted Estimates of Aggregate Protection in Rich Countries toward Developing Countries - Working Paper 66

8/29/05
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Since the launch of the Doha “development” Round of trade talks in Qatar in 2001, rich-country agricultural tariffs and subsidies have been contentious issues that threaten to scuttle progress on trade liberalization within the World Trade Organization. Yet in the Doha Declaration, rich countries pledged to greatly reduce trade barriers to developing countries. In this CGD working paper, Research Fellow David Roodman proposes a new way to measure rich countries’ trade protection with respect to developing countries. His estimates use weights based on the value of an exporter’s total production in each product area. This substantially avoids the endogeneity problem associated with imports-based weights such as those used in the Market Access Map (MacMap) approach, whereby those products facing the highest protection are deemphasized since imports are low. Drawing on the methodology of CGD Senior Research Fellow William Cline, Roodman also evaluates trade-distorting agricultural subsidies by country and commodity, and translates these into tariff-equivalents, for the first estimates of agricultural protection with respect to developing countries by importer and commodity group. Roodman shows that despite the “preferential” low tariffs that many rich nations offer the poorest countries, the poorest countries actually face the greatest trade barriers once their economic reliance on agriculture is taken into account, because this is where rich-country protection is by far the highest. Roodman is the chief architect and manager of the Commitment to Development Index (CDI); the trade component of the CDI is based on the results of this paper. The final version of the paper is published in World Economy 30(6), pp. 999–1028 (June 2007).

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