Thursday, June 29, 2006

Doha Round - more trade, less poverty

The World Trade Organization negotiations called "the Doha Round" is at a critical point. We need the diplomats to succeed for the benefit of the people of the US and of every country that participates. Wall Street Journal (paid subscription)
The record on how trade can spur development is compelling. The World Bank has estimated that, in the 1990s, per capita real income grew three times faster for developing countries that significantly lowered trade barriers (5%) than for other developing countries that lowered barriers less (1.4%). Just as important, the income gains were enjoyed by people at all income levels. The World Bank also estimates that eliminating trade barriers in goods alone (not including trade in the rapidly growing services sector), could boost incomes in developing countries by at least $142 billion a year. That figure exceeds the combined total of $80 billion in foreign economic assistance by G-7 countries last year and a current G-7 proposal for $42 billion for developing country debt relief.
And despite being a fraction the economic size of manufacturing and information services, agriculture is holding things up:
The United States put forward an offer last fall to make meaningful cuts in trade-distorting domestic agricultural supports if other countries would reciprocate with deep cuts in tariffs and trade-distorting domestic support. So far, our trading partners have not matched our ambition -- but it is not too late.
Hope that they will be successful in making a good deal.

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