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Views from the Center


In response to Nancy Birdsall's request for comments on the upcoming Doha Trade round, we received a thoughtful comment from Jim, author of the Blog Our word is our weapon.

Firstly, a warm welcome to the new blog! I'm sure it'll be a must-read for myself and many others.

Nancy asked for views on the fate of the Doha round. I've recently been wondering whether it will really make that much difference in terms of development and poverty reduction. The latest World Bank estimates of gains from a likely Doha round are not actually that huge, and seem to accrue mostly to high-income countries and a handful of non-LDC developing countries. Preference erosion for African countries is a real worry - Lesotho has already lost a lot of market share in textiles with the expiry of the Multifibre Agreement. The reciprocal nature of WTO negotiations means the 'Quad' are able to demand 'concessions' from everyone else in return for reducing their manifestly unjust trade barriers and export subsidies. And so I wonder whether the poorest will really benefit that much from Doha.

But even if that's the case, there are other reasons to hope that the Doha round does conclude with significant liberalisation by the rich countries. Firstly there's the cost to their citizens as consumers and tax-payers of the current arrangements. And there's the prospect of a collapsed Doha round leading to yet more bilateral and regional trade deals in which the imbalances of power are even greater.

Last point: I always find it strange that analysis and discussion of trade focuses on the role of countries and governments, when it is firms who trade. I recently read some research suggesting that most of the gains from the African Growth and Opportunity Act went not to exporting African firms but to US firms due to their rather oligopsonistic market power. Recognising that this kind of analysis is often very difficult, shouldn't there be a greater focus on the distribution of the gains from trade not just between countries but between the different actors and classes within them?

Sorry about the long comment - I'll try to keep it snappy in future!

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CGD blog posts reflect the views of the authors drawing on prior research and experience in their areas of expertise. CGD does not take institutional positions.