Trading Up: Trade Policy and Global Poverty

July 18, 2005
The trade ministers of WTO-member countries will soon meet in Cancun, Mexico, to review progress in the current round of multilateral trade negotiations (named for Doha, Qatar,where itwas launched in late 2001). There has been well-founded concern that Cancun could mark the collapse of the Doha Round, largely because industrial countries have been unprepared to grant enough liberalization in their highly protected agricultural markets to encourage developing countries to participate by liberalizing their markets for manufactures. Other contentious issues include the balance between humanitarianism and market incentive for research and development in the area of pharmaceutical patent rights. If all parties can agree to move ahead, the Doha Round holds major potential for reducing global protection and, thereby, global poverty. At the $2-per-day threshold, 2.9 billion people remain poor today—almost half the world. Used effectively, trade policy can be a major instrument for reducing this number. Global trade liberalization could substantially reduce global poverty in five important ways outlined in the box below. This policy brief is a preview of the analysis and recommendations in Trade Policy and Global Poverty, by William R. Cline.

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