Working Paper: CEPR ID: DP5049
Authors: Kym Anderson; Will Martin; Dominique van der Mensbrugghe
Abstract: This paper examines whether, in the presence of trade preferences, Sub-Saharan African economies, and especially its poorest households, could gain from multilateral trade reform. The World Bank?s LINKAGE model of the global economy is employed to examine the impact first of current trade barriers and agricultural subsidies, and then of possible outcomes from the WTO?s Doha round. The results suggest moving to free global merchandise trade would boost real incomes in sub-Saharan Africa proportionately more than in other developing countries or in high-income countries, despite a terms of trade loss in parts of the region. Farm employment and output, the real value of agricultural and food exports, the real returns to farm land and unskilled labor, and real net farm incomes would all rise in the region, thereby alleviating poverty. A Doha partial liberalization of both agricultural and no-agricultural trade could take the region some way towards those desirable outcomes, but more so the more both rich and poor countries reduce their applied tariffs.
Keywords: Computable General Equilibrium; Multilateral Negotiations; Sub-Saharan Africa; Trade Policy; WTO
JEL Codes: C68; D58; F13; F17; O55; Q17
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Trade liberalization (F13) | Increase in real incomes in Sub-Saharan Africa (O55) |
| Trade liberalization (F13) | Alleviation of poverty in Sub-Saharan Africa (O55) |
| Doha partial liberalization (F13) | Desirable outcomes in Sub-Saharan Africa (O55) |
| Reduction of applied tariffs by rich and poor countries (F13) | Greater gains from trade reform in Sub-Saharan Africa (O55) |
| Trade reform (F13) | Increase in real net farm incomes in Sub-Saharan Africa (O55) |
| Trade reform (F13) | Increase in returns to unskilled labor in Sub-Saharan Africa (F66) |
| Trade reform (F13) | Improvement in equity in Sub-Saharan Africa (O55) |