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Achieving a Grand Bargain in the Doha Round

December 12, 2005
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Time is running out for the Doha “Development Round” of global trade negotiations. US negotiating authority expires in mid-2007. Ideally, the outlines of a deal would have been in place by the December 2005 meeting of trade ministers in Hong Kong, although it now appears that an additional high-level meeting in early 2006 may be necessary for this purpose.

The collapse of the ministerial meeting in Cancun in September 2003 showed that developing countries will not settle for a face-saving minimalist agreement, nor should they. The July 2004 Geneva “framework” agreement set the stage for more meaningful liberalization, particularly in agriculture. But the major negotiating countries have not yet made commitments to the deep liberalization necessary to realize the potential of the framework.

The best approach is a “grand bargain,” outlined in this new Brief by Senior Fellow William R. Cline. The “grand bargain” he envisions  includes deep cuts in agricultural tariffs and subsidies in industrial countries, major cuts in their tariffs in manufactures including textiles and apparel, a ceiling of 10 percent on all tariffs on manufactures in industrial countries, major cuts in agricultural tariffs of developing countries, major cuts in their tariffs on manufactures, liberalization of key service sectors in developing countries, and the granting of free or preferential entry to imports from Least Developed Countries (LDCs) into middle-income country markets, and complete free entry for these imports into industrial country markets.

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