And the modest gains to the world economy from agreeing
what is currently on the table could be improved if negotiators made progress
opening up services that account for 80 percent of rich economies and a rapidly
rising share in developing countries.
Putting a figure on the gains from Doha -- launched nine
years ago this month to open up global commerce and help developing countries
prosper through trade -- is extremely difficult and estimates vary widely.
In an effort to provide clarity and remind negotiators
what the stakes are, the World Trade Organization invited leading trade
economists to a workshop on recent analyses of Doha.
Speakers compared trade policy to riding a bicycle -- you
keep advancing or you fall off, and agreed the global trading system umpired by
the WTO had helped world trade survive the economic crisis largely unscathed.
But risks remain.
"There has been a constrained protectionist reaction
to the economic crisis of the past few years, but it has not been tamed,"
said Jeffrey Schott, senior fellow at the Peterson Institute for International
Economics.
Governments did not respond to the economic crisis by
pushing up import tariffs or subsidies -- the two main areas of trade policy
governed by the WTO.
But during the 2008 food crisis, many states indulged in
beggar-thy-neighbour export restrictions -- largely neglected by WTO rules,
noted David Laborde, a researcher at Washington's International Food Policy
Research Institute (IFPRI).
"The fact that the WTO is putting some rules, or
puts light, on some policies plays a role and this we should defend," he
said.
Laborde argued that Doha represented an insurance policy
against the costs of increased protectionism resulting from a failure of the
negotiations.
An agreement on agriculture and industrial goods -- the
two core areas where negotiations are most advanced -- would boost annual world
real income by $50 billion on current proposals.
If Doha fails, and countries push tariffs to the current
ceilings they have committed to, the losses to world income would be $350
billion. A Doha deal would limit the losses from potential tariff hikes, in any
new fit of protectionism, to $150 billion, suggesting Doha is worth some $200
billion, he said.
Will Martin, a senior World Bank researcher, said the
current industry and agriculture proposals would boost the world economy by $121
billion, with three quarters going to rich countries and one quarter to the
developing world.
By contrast, Schott of the Peterson Institute said
current proposals for agriculture and industrial goods would raise world
exports by over $90 billion a year, and world GDP by over $60 billion, which
would not persuade leaders to push for a deal.
"It's not ambitious enough... there's not enough on
offer to ensure countries will liberalise existing trade practices in exchange
for Doha offers," he said.
A vital element is services, such as banking and
telecoms, that have been left behind in the talks so far, Schott said.
Liberalising trade in services could boost world GDP by
another $45 billion, excluding the knock-on effect on farming and manufacturing
from better efficiency, and trade facilitation -- helping developing countries
cut red tape and make their rules more trade-friendly -- could add another $120
billion.
Aaditya Mattoo, a senior researcher at the World Bank,
said the best offers on services liberalisation did not capture the openness
that already existed. "The bottom line is Doha is playing catch-up with
reality and not quite succeeding."
