Transcript Slide 1

Trade Policy and Global Poverty
William R. Cline
Global Free Trade Impact:





Lift 500 million out of poverty in 15 years
$200 billion annual long-term income gain
for developing countries
At least half from removing industrial
country protection
This is twice annual aid, and it benefits
industrial country consumers
Half of gains are in agriculture
Poverty Intensity of Imports from
Developing Countries (%)
70
60
50
40
headcount
income
30
20
10
0
All
LDCs
HIPCs
SSA
Growth Elasticity of Poverty





Lognormal distribution: elasticity function of
inequality (G), ratio of average to poverty
income (z)
Lower where inequality higher
Higher where z higher
Asia typically 3 or more
Typically lower in Latin America (1 to 2)
because high G; and in Africa (1 to 2)
because low z
Average GDP&Export Growth
Average Annual GDP Growth
15
10
5
0
-15
-10
-5
0
5
10
15
-5
-10
-15
Average Annual Export Growth
80s 90s
20
25
30
Special-regime export growth,
1981-2001
gx* = -6.9 + 1.93 gw (2.5)
+0.41 gylag (1.6)
+0.079 mfshr (1.97)
+7.76 R*lag (2.36)
-.0004 y*lag (1.0)
+8.83 LOME (2.36)
+7.23 CBI (2.39)
+1.66 ATPA (0.29)
-10.8 SSA (2.36)
Adj R2 =.016; # obs. = 1412
Total Tariff Equivalent of Agricultural
Protection Against Developing Countries
(percent tariff equivalent)
US
Can.
EU
Japan
8.8
30.4
32.6
76.4
Tariff-Equivalent
of domestic
subsidies
10.2
16.8
10.4
3.2
Total TariffEquivalent
19.9
52.3
46.4
82.1
Tariffs
Aggregate Measure of
Protection (AMP, %)
US
EU
JPN
Agriculture
19.9
46.4
82.0
Textiles, Apparel
10.9
11.6
9.2
Other Manufactures
2.1
3.2
1.5
Oil, other
0.9
0.6
0.3
All (AMP)
4.0
9.5
16.6
DC agricultural protection and
global poverty
π=εw {ΦR[θRγR-] +ΦUθUγU}
π= proportionate rise in poverty
ε= poverty elasticity
w= % increase in world price
Φ=share of total poor in sector
θ=share of food in budget
γ= elast. food price wrt world price
=elast. farm income wrt farm price
=elast. farm price wrt world price
LDC food trade and
comparative advantage
Country
Bangladesh –food trade
deficit & comp. disadv.
Others: total
Poor
(mn)
99
# of
countries
1
374
44
Food trade deficit
213
34
Food comparative
disadvantage
110
21
Welfare Effects of Free Trade: CRTS Model
($ billions and percent of GDP)
Agriculture
Txtl & Ap.
ANZ
8.42
0.07
CAN
3.98
1.31
USA
22.31
8.04
JPN
21.67
1.25
KOR
5.92
1.19
E_U
21.62
6.25
IDN
0.20
-0.02
MYS
-0.71
0.05
PHL
1.39
-0.21
THA
0.64
-0.01
CHN
1.64
1.64
AG3
2.05
1.85
ARG
3.62
-0.03
BRA
5.83
0.23
MEX
-1.42
-0.46
OLA
2.64
0.13
SSA
1.32
0.07
MNA
9.56
1.14
EIT
3.71
0.67
XAS
3.44
0.03
EFTA
6.83
1.01
IND
0.82
0.57
TUR
2.24
0.17
XCM
2.32
0.08
XSC
0.46
0.10
DGC
45.68
7.20
DEV
84.83
17.94
WLD
130.51
25.14
Memorandum: from P26 results:
BGD
n.a.
n.a.
XSA
n.a.
n.a.
MOZ
n.a.
n.a.
UGA
n.a.
n.a.
TZA
n.a.
n.a.
Other
Total
0.04
-0.44
2.00
14.03
4.48
14.94
1.15
0.86
-0.16
2.01
0.97
3.32
1.15
3.95
-0.04
1.26
1.22
10.77
2.18
1.63
12.54
0.43
0.53
1.51
0.89
38.09
43.11
81.20
n.a.
n.a.
n.a.
n.a.
n.a.
% GDP
9.17
4.39
39.20
31.70
9.44
38.96
1.43
-0.02
1.20
3.08
4.47
7.30
5.27
10.20
-2.06
4.12
2.66
17.05
6.20
5.45
17.86
2.22
3.08
4.09
1.37
86.51
141.29
227.80
2.41
0.90
0.57
0.85
2.41
0.61
0.74
-0.02
1.50
2.21
0.62
1.55
1.65
1.54
-0.60
1.23
1.41
3.00
0.82
1.33
5.73
0.63
1.72
4.03
1.28
1.35
0.78
0.93
0.39
0.98
0.12
0.09
0.29
0.90
1.51
3.24
1.33
4.11
We lfare Effe cts of Alte rnative Trade Libe ralization Sce narios
($ billions and percent of free trade potential)
ANZ
CAN
USA
JPN
KOR
E_U
IDN
MYS
PHL
THA
CHN
AG3
ARG
BRA
MEX
OLA
SSA
MNA
EIT
XAS
EFTA
IND
TUR
XCM
XSC
DGC
DEV
WLD
2-tier
liberalization
$ bn
%FT
2.72
29.67
1.93
43.89
21.44
54.68
20.97
66.16
6.37
67.50
39.60
101.65
1.25
87.24
0.89
a
0.19
16.14
2.82
91.59
4.42
98.77
4.64
63.62
2.89
54.91
6.04
59.20
-0.59
28.62
2.30
55.89
1.86
70.09
13.63
79.95
3.57
57.68
3.06
56.25
17.44
97.63
1.80
81.06
1.52
49.45
2.49
60.96
1.19
86.75
60.35
69.75
104.09
73.68
164.44
72.19
a. < -1,000
asymmetric
free trade
$bn
%FT
7.20
78.46
2.43
55.45
17.51
44.67
18.70
58.97
1.47
15.57
7.66
19.66
1.70
118.69
-0.15
728.57
1.53
127.68
3.44
111.72
6.99
156.31
4.48
61.42
3.66
69.50
4.35
42.64
-2.63
127.84
3.73
90.70
3.00
112.96
3.27
19.20
8.03
129.63
4.78
87.73
15.52
86.90
1.31
59.09
2.20
71.65
4.41
107.90
0.98
71.52
56.55
65.37
69.02
48.85
125.57
55.12
differential
liberalization
$ bn
%FT
2.56
27.89
2.78
63.24
13.63
34.76
10.18
32.12
12.11
128.35
24.80
63.64
2.02
140.86
2.15
a
0.51
42.56
3.64
118.05
9.48
212.03
9.35
128.08
4.95
93.98
10.94
107.17
-0.15
7.29
3.70
89.85
2.14
80.45
14.48
84.92
6.89
111.14
3.53
64.90
16.19
90.63
2.66
119.76
2.35
76.53
2.74
66.98
1.59
116.18
95.05
109.87
70.12
49.63
165.17
72.51
Decomposition of static
welfare gains
Benefit:
DGC
$bn
%
FT
DEV
$bn
%
FT
Total
$bn
%
FT
Liberalize:
DGC
41
48
59
42
100
44
DEV
57
65
69
49
126
55
sum
98
113
128
91
226
99
Global
87
100
141
100
228
100
Interaction
-11
-13
13
9
2
1
MFN Tariffs (%)
Agric
TxAp
OthMf
OilRM
DCs
35.6
11.6
3.1
0.1
EU
32.6
18.0
4.1
0.0
US
8.8
12.1
2.8
0.1
JPN
76.4
10.2
1.2
0.0
DGCs
30.3
18.2
11.5
0.7
China
29.9
27.9
15.3
0.5
India
31.5
31.6
24.6
1.1
Korea
50.7
7.9
6.9
0.4
Brazil
22.9
17.6
15.4
0.4
Colom
14.7
18.0
11.9
0.8
Tanz
22.8
17.3
20.3
2.2
S Afr
37.8
19.3
7.8
0.2
"Steady State" Welfare Gains from Free T rade
Region
$ billion
%GDP
ANZ
21.90
5.76
CAN
6.53
1.34
USA
80.23
1.17
JPN
44.25
1.18
KOR
16.44
4.20
E_U
89.34
1.41
IDN
7.06
3.64
MYS
3.21
3.73
PHL
3.91
4.91
THA
43.39
31.16
CHN
6.46
0.90
AG3
16.06
3.42
ARG
15.66
4.89
BRA
40.13
6.04
MEX
3.47
1.02
OLA
27.32
8.16
SSA
13.90
7.36
MNA
50.60
8.91
EIT
24.55
3.26
XAS
26.90
6.58
EFTA
20.98
6.73
IND
23.86
6.74
TUR
9.76
5.45
XCM
12.72
12.55
XSC
5.22
4.88
DGC
350.62
5.48
DEV
263.22
1.45
WLD
613.84
2.50
Memorandum:
from P26 results:
BGD
1.72
3.94
XSA
14.11
21.72
MOZ
0.38
9.84
UGA
0.32
4.90
TZA
0.91
12.89
a. At capital cost of 7 percent
%dK
dK %GDPNet change in welfare (a)
$ billion
%GDP
11.32
37.58
11.89
3.13
1.80
4.88
4.86
1.00
1.92
5.22
55.06
0.80
1.78
5.85
28.92
0.77
17.88
48.44
3.17
0.81
1.90
5.69
64.02
1.01
13.98
33.28
2.55
1.31
22.91
54.53
-0.07
-0.09
14.81
35.25
1.95
2.44
67.03
159.53
27.84
19.99
14.14
33.51
-10.45
-1.45
9.69
26.27
7.42
1.58
11.53
34.93
7.83
2.44
12.85
38.94
22.02
3.32
3.41
10.04
1.07
0.31
17.92
54.31
14.60
4.36
19.80
51.48
7.09
3.75
18.40
47.83
31.58
5.56
10.82
36.24
5.44
0.72
18.20
43.31
14.51
3.55
6.37
21.14
16.37
5.25
21.99
51.46
11.10
3.14
9.72
25.28
6.59
3.68
37.42
113.37
4.67
4.61
13.10
34.06
2.67
2.49
15.75
42.18
161.59
2.52
2.15
6.46
181.13
1.00
5.70
15.77
342.71
1.40
13.66
69.07
25.99
13.37
33.10
32.52
164.39
67.84
34.89
86.40
0.73
1.67
6.64
10.21
0.20
5.09
0.16
2.45
0.48
6.84
hrtrunsRF04 s5
Impact of Free Trade on Real Factor Prices and Welfare: CRTS Model
(percent change)
Region
B25
ANZ
CAN
USA
JPN
KOR
E_U
IDN
MYS
PHL
THA
CHN
AG3
ARG
BRA
MEX
OLA
SSA
MNA
EIT
XAS
EFTA
IND
TUR
XCM
XSC
Memorandum: P26
BGD
XSA
MOZ
UGA
TZA
Land
Unskilled
Labor
Skilled
Labor
Capital & Weighted
Resources Sum
Welfare
lambda
124.90
140.50
4.80
-70.90
-31.20
-51.30
8.60
-0.60
12.40
51.30
0.70
6.40
36.50
23.40
-2.30
32.50
18.90
-22.40
10.80
7.20
-65.30
3.40
14.30
26.50
56.00
4.50
2.10
1.00
3.50
9.40
1.20
2.40
8.60
5.20
10.60
8.30
3.70
2.50
1.60
1.00
4.30
6.00
9.60
4.40
5.00
12.90
2.80
4.30
9.70
4.30
1.90
1.80
1.00
4.00
9.60
1.70
1.40
8.30
3.40
5.80
8.50
3.10
1.20
1.70
1.10
2.60
4.00
11.40
4.00
4.60
12.90
2.50
3.30
8.10
4.10
1.80
2.30
1.00
3.70
9.60
1.40
2.00
8.50
3.20
5.20
8.20
3.30
1.50
2.30
1.10
2.60
3.90
12.20
4.00
4.40
12.00
2.50
3.50
9.20
5.00
3.62
2.80
1.02
3.50
8.54
0.96
2.63
8.07
4.46
7.44
7.89
3.41
2.94
2.27
0.97
3.89
5.12
10.91
4.25
4.83
11.97
2.71
3.85
9.91
4.81
3.3
1.2
0.7
1.3
4.0
0.8
1.1
1.0
2.0
3.6
1.1
2.3
2.1
2.0
-0.8
1.6
1.7
4.2
1.1
1.7
7.9
0.9
2.4
5.2
1.7
0.91
0.43
0.69
0.37
0.47
0.83
0.42
0.12
0.45
0.48
0.14
0.68
0.71
0.88
-0.83
0.41
0.33
0.38
0.26
0.35
0.66
0.33
0.62
0.52
0.35
4.7
7.2
8.3
3.3
32.4
6.4
9.7
6.5
2.8
8.8
5.5
10.0
6.2
2.3
2.1
5.4
9.0
6.0
2.3
3.4
5.8
9.1
6.3
2.6
7.3
1.1
1.9
3.9
1.6
4.9
0.19
0.21
0.62
0.61
0.67
Impact of Free Trade on Global Poverty: CRTS Static Model
Poor
(mn)
Poverty Elasticity
Estimated Constrained
Asia
Bangladesh
BGD
99.3
China
CHN
673.2
India
IND
859.9
Indonesia IDN
136.8
Korea
KOR
0.9
Malaysia MYS
5.6
Pakistan XSA
114.2
PhilippinesPHL
29.2
Thailand THA
17
HK, Taiw., AG3
Sgp.
0
Other
OAS
84.8
subtotal
2020.9
Latin America
Argentina ARG
5.4
Brazil
BRA
29.2
Cen. Am.&XCM
Carib.
26.6
Mexico MEX
41.1
Other
OLA
45.9
subtotal
148.2
Europe
Central & EIT
E. Eur.
92.2
Middle East,
MNA
North Africa
Turkey TUR
11.6
Other
MNA
76.42
subtotal
88.02
Sub-Saharan Africa
Mozambique
MOZ
13.56
South Africa
XSC
15.07
Tanzania TZA
19.65
Uganda UGA
16.58
Other
SSA
328.36
subtotal
393.22
TOTAL
2742.54
Percent change in real Change in number
poverty-level income
of poor (mn)
Base
Alternative Base
Alternative
case
case
1.2044
1.1398
-4.19
-3.96
1.1558
0.943
-27.23
-22.22
0.9216
0.9612
-27.74
-28.93
1.0172
1.538
-4.87
-7.36
0.2308
-2.6644
-0.01
0.08
1.0288
0.808
-0.18
-0.14
2.0233
1.9183
-8.09
-7.67
2.306
2.954
-2.00
-2.56
4.9392
8.8464
-2.94
-5.26
2.4944
2.8616
0.00
0.00
1.3368
1.108
-2.27
-1.88
-79.51
-79.90
5.76
5.13
4.98
6.55
inf
3.16
9.43
2.97
5.91
na
na
3.5
3.5
3.5
3.5
3.5
3.16
3.5
2.97
3.5
2
2
3.13
1
na
1.95
na
3.13
1
2
1.95
2
1.8075
1.534475
5.0596
0.82
1.7467
6.6355
5.304
6.8068
0.16
4.0591
-0.31
-0.45
-2.69
-0.66
-1.60
-5.71
-1.12
-1.55
-3.62
-0.13
-3.73
-10.15
na
2
1.1396
1.4724
-2.10
-2.72
6.06
na
3.5
2
2.6394
3.7032
3.8794
1.2712
-1.07
-5.66
-6.73
-1.58
-1.94
-3.52
1.39
1.18
0.57
2.33
na
1.39
1.18
1
2.33
2
4.017
1.5245
5.7964
1.6972
1.952
4.2402
5.1435
8.9588
1.7582
2.8034
-0.76
-0.27
-1.14
-0.66
-12.82
-15.64
-109.69
-0.80
-0.91
-1.76
-0.68
-18.41
-22.56
-118.85
Impact of Free Trade on Real Factor Prices and Welfare: Steady State CRTS Model
(percent change)
Region
B25
ANZ
CAN
USA
JPN
KOR
E_U
IDN
MYS
PHL
THA
CHN
AG3
ARG
BRA
MEX
OLA
SSA
MNA
EIT
XAS
EFTA
IND
TUR
XCM
XSC
Memorandum: P26
BGD
XSA
MOZ
UGA
TZA
Land
Unskilled
Labor
Skilled
Labor
Capital & Weighted
Resources
Sum
Net
Welfare
lambda
142.7
156.6
10.2
-69.4
-27.5
-48.9
15.9
11.8
20.7
74.4
5
12.6
45.7
37.6
2.1
46.7
31.4
-11.9
18.4
18.4
-62.6
16
24.6
48.2
72.7
7.9
3.3
2.2
4.8
14.2
2.7
6.9
16.2
9.5
38.3
12.7
7
6.5
5.7
3.2
10.6
12.6
15.5
7.7
10.2
14.9
8.6
9.2
19.9
8.2
4.5
2.9
2.1
5.4
14
3
4.7
14
6.2
21.6
12
5.9
4.4
4.6
2.9
6.4
7.2
15.2
6.5
7.7
14.9
5
7.1
13.1
7
-0.1
2.4
1.4
4.2
5.6
1.9
-2
2.8
-0.4
-1.8
3.2
1.6
-1
-0.1
1
-0.9
-2.4
6.9
1.2
-0.6
10.4
-4.2
2
-0.6
1.5
4.52
3.61
1.92
4.51
9.44
1.98
2.93
7.86
4.90
6.60
8.45
4.38
3.93
3.17
1.70
4.53
5.49
10.84
4.91
5.38
12.68
3.03
4.87
9.46
5.68
4.28
1.33
0.98
1.19
1.35
1.31
1.96
3.69
3.24
32.54
-2.57
2.34
3.12
4.32
0.42
5.67
4.53
7.78
0.97
4.53
7.24
4.50
5.13
5.94
3.31
0.95
0.37
0.51
0.26
0.14
0.66
0.67
0.47
0.66
4.93
-0.30
0.53
0.79
1.36
0.25
1.25
0.83
0.72
0.20
0.84
0.57
1.48
1.05
0.63
0.58
14.5
42.5
23.8
9.1
55.5
10.3
26.4
14.3
6.8
21
7.4
14.4
10.1
4.2
-9.6
0.7
-11.3
-2.9
-2.3
4.1
6.11
9.43
6.64
3.23
13.61
2.05
12.86
6.38
2.84
8.13
0.33
1.36
0.96
0.88
0.60
Impact of Free Trade on Global Poverty: Steady State Model
Percent change in real
Change in number
poverty-level income
of poor (mn)
Base
Alternative
Base
Alternative
Asia
Bangladesh
China
India
Indonesia
Korea
Malaysia
Pakistan
Philippines
Thailand
HK, Taiw., Sgp.
Other
subtotal
Latin America
Argentina
Brazil
Cen. Am.& Carib.
Mexico
Other
subtotal
Europe
Central & E. Eur.
Middle East, North Africa
Turkey
Other
subtotal
Sub-Saharan Africa
Mozambique
South Africa
Tanzania
Uganda
Other
subtotal
TOTAL
BGD
CHN
IND
IDN
KOR
MYS
XSA
PHL
THA
AG3
OAS
3.3
0.0
8.2
4.4
1.9
7.2
25.0
6.0
37.7
3.6
8.2
3.5
0.0
9.7
5.6
0.8
6.8
28.3
7.4
44.9
4.2
9.5
-11.3
0.0
-246.5
-20.9
-0.1
-1.3
-100.1
-5.2
-22.4
0.0
-13.8
-421.6
-12.3
0.0
-291.0
-26.6
0.0
-1.2
-113.0
-6.5
-26.7
0.0
-16.2
-493.6
ARG
BRA
XCM
MEX
OLA
4.9
5.4
11.9
0.8
10.1
11.1
11.9
15.4
0.7
17.3
-0.8
-1.6
-6.3
-0.6
-9.3
-18.6
-1.9
-3.5
-8.2
-0.6
-15.9
-30.1
EIT
MNA
TUR
MNA
1.5
1.9
-2.7
-3.5
8.8
10.8
11.9
6.9
-3.6
-16.5
-20.1
-4.8
-10.5
-15.3
MOZ
XSC
TZA
UGA
SSA
13.0
4.6
12.2
5.7
9.9
14.8
12.1
16.3
6.1
13.0
-2.4
-0.8
-2.4
-2.2
-64.8
-72.6
-535.7
-2.8
-2.2
-3.2
-2.3
-85.3
-95.8
-638.2
Elasticity of output
w.r.t. trade/GDP
Levine-Revelt ‘92
0.14
Frankel-Rose ‘00
0.33
Alcala-Ciccone ‘01
1.44
Dollar-Kraay ‘01
0.25-0.48
Easterly ‘03
0.14-0.96
Chaudri-Hakura ’00
(mid-tech industry)
0.18
World Bank GEP ‘02
0.8
OECD ‘03
0.2
Pove rty Impact of Dynamic Productivity Gains from Fre e Trade
(millions and percent change)
Number of
poor (mn)
As ia
Bangladesh
China
India
Indonesia
Korea
Malaysia
Pakistan
Philippines
Thailand
HK, Taiw., Sgp.
Other
subtotal
Latin Ame rica
Argentina
Brazil
Cen. Am.& Carib.
Mexico
Other
subtotal
Europe
Central & E. Eur.
Middle Eas t, North Africa
Turkey
Other
subtotal
Sub-Saharan Africa
Mozambique
South Africa
Tanzania
Uganda
Other
subtotal
Total
Poverty
elasticity
Increase in Gain in Long-term
Change in
Trade, %
Productivity (%) poverty (mn)
99.3
673.2
859.9
136.8
0.9
5.6
114.2
29.2
17
0
84.8
2020.9
3.5
3.5
3.5
3.5
3.5
3.16
3.5
2.97
3.5
2
2
--
25.6
5
6.2
4.6
3.1
5.9
14.3
8.4
3
2.1
4.2
--
10.24
2
2.48
1.84
1.24
2.36
5.72
3.36
1.2
0.84
1.68
-35.6
-47.1
-74.6
-8.8
0.0
-0.4
-22.9
-2.9
-0.7
0.0
-2.8
-196.0
5.4
29.2
26.6
41.1
45.9
148.2
3.13
1
2
1.95
2
--
2.2
-0.3
5.4
0.7
-0.4
--
0.88
-0.12
2.16
0.28
-0.16
-0.1
0.0
-1.1
-0.2
0.1
-1.3
92.2
2
1
0.4
-0.7
11.6
76.42
88.02
3.5
2
--
3.7
3.5
--
1.48
1.4
--
-0.6
-2.1
-2.7
13.56
15.07
19.65
16.58
328.36
393.22
2742.54
1.39
1.18
1
2.33
2
---
4.1
-0.8
0.5
0.5
0.3
---
1.64
-0.32
0.2
0.2
0.12
---
-0.3
0.1
0.0
-0.1
-0.8
-1.2
-201.9
Combined Long-term Static and Dynamic Effects of Free Trade on Poverty
(millions, change from baseline)
Country
Asia
Bangladesh
China
India
Indonesia
Korea
Malaysia
Pakistan
Philippines
Thailand
HK, Taiw., Sgp.
Other
subtotal
Latin America
Argentina
Brazil
Cen. Am.& Carib.
Mexico
Other
subtotal
Europe
Central & E. Eur.
Middle E., N. Africa
Turkey
Other
subtotal
Sub-Saharan Africa
Mozambique
South Africa
Tanzania
Uganda
Other
subtotal
Static:
central
high (a)
Dynamic:
Productivity
effect
1/2 additional
net Steady
State effect (b)
Total:
central
high
-4.1
-24.7
-28.3
-6.1
0.0
-0.2
-7.9
-2.3
-4.1
0.0
-2.1
-79.7
-13.3
-87.2
-74.8
-15.1
0.1
-0.2
-13.0
-2.0
-4.0
0.0
-8.8
-218.3
-35.6
-47.1
-74.6
-8.8
0.0
-0.4
-22.9
-2.9
-0.7
0.0
-2.8
-196.0
-3.6
0.0
-109.1
-7.4
0.0
-0.6
-46.1
-1.4
-9.2
0.0
-5.9
-183.3
-43.3
-71.8
-212.1
-22.3
-0.1
-1.1
-76.9
-6.6
-14.0
0.0
-10.8
-459.0
-52.6
-134.3
-258.5
-31.3
0.0
-1.1
-82.0
-6.4
-13.9
0.0
-17.5
-597.6
-0.7
-1.0
-3.2
-0.4
-2.7
-7.9
0.1
-0.4
-2.9
0.4
-2.2
-5.0
-0.1
0.0
-1.1
-0.2
0.1
-1.3
-0.1
-0.3
-1.6
-0.1
-3.3
-5.3
-0.9
-1.3
-5.9
-0.7
-5.8
-14.6
-0.1
-0.7
-5.6
0.1
-5.4
-11.7
-2.4
-1.0
-0.7
-0.2
-3.3
-1.9
-1.3
-3.8
-5.1
0.0
-4.4
-4.4
-0.6
-2.1
-2.7
-1.1
-6.4
-7.5
-3.0
-12.3
-15.4
-1.8
-12.9
-14.7
-0.8
-0.6
-1.4
-0.7
-15.6
-19.1
-114.3
-0.4
-1.1
-3.1
-2.5
-24.8
-31.9
-260.7
-0.3
0.1
0.0
-0.1
-0.8
-1.2
-201.9
-0.8
-0.1
-0.5
-0.8
-24.6
-26.8
-224.2
-1.9
-0.6
-2.0
-1.5
-41.0
-47.0
-539.3
-1.5
-1.2
-3.6
-3.4
-50.1
-59.8
-685.7
Total
a. Adjusts for chapter 3 agricultural sector estimates; see text.
pehrtreslts2R3/14
b. One-half increment of steady state (induced capital investment) effects above static.
Long-term Impact of Free Trade on
Global Poverty
Reduction (millions)
250
200
150
100
50
0
Static
Productivity
Investment
Reduction in Poverty from Global
Free Trade (millions)
250
200
150
100
50
0
India
China
Pak
Bangl
Indons LatAm MENA SSAfr
Blueprint for a Doha Deal




DCs: Phased deep tariff cuts or elimination,
including in agriculture, textiles and apparel;
DCs: Eliminate agricultural subsidies or fully
“decouple” from production;
Middle-income DGCs: cut protection at least
50-60 percent; longer phase-in.
Second track: immediate free entry from
LDCs, HIPCs, SSA; 10-year tax holiday on
FDI
Test for Preference Erosion
($bn gains)
“Country”
Free trade
US, EU
freeze P7
0.09
0.07
0.28
0.24
Mozambique
Uganda
South Africa
Tanzania
0.13
0.09
1.33
0.29
Other sub-Saharan Africa
2.36
-0.02
Central America
Bangladesh
Total, 7 poor (P7)
4.02
0.39
8.61
1.78
-0.20
2.24