Working Paper: CEPR ID: DP6760
Authors: Kym Anderson; L Alan Winters
Abstract: While barriers to trade in most goods and some services including capital flows have been reduced considerably over the past two decades, many remain. Such policies harm most the economies imposing them, but the worst of the merchandise barriers (in agriculture and textiles) are particularly harmful to the world?s poorest people, as are barriers to worker migration across borders. This paper focuses on how costly those anti-poor trade policies are, and examines possible strategies to reduce remaining distortions. Two opportunities in particular are addressed: completing the Doha Development Agenda process at the World Trade Organization (WTO), and freeing up the international movement of workers. A review of the economic benefits and adjustment costs associated with these opportunities provides the foundation to undertake benefit/cost analysis required to rank this set of opportunities against those aimed at addressing the world?s other key challenges as part of the Copenhagen Consensus project. The paper concludes with key caveats and suggests that taking up these opportunities could generate huge social benefit/cost ratios that are considerably higher than the direct economic ones quantified in this study, even without factoring in their contribution to alleviating several of the other challenges identified by that project, including malnutrition, disease, poor education and air pollution.
Keywords: Doha Development Agenda; International Migration; Trade Policy Reform
JEL Codes: F02; F13; F15; F17; F22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Reducing barriers to trade in agriculture and textiles (F13) | Improved welfare outcomes (I39) |
| Doha Development Agenda at the WTO (O10) | Substantial global welfare gains (D69) |
| Liberalizing trade and migration (O24) | Alleviating poverty and addressing malnutrition, disease, and poor education (I32) |
| Freeing up international migration (F22) | Welfare gain (D69) |
| Costs associated with reforms (H59) | Net social benefit-cost ratios (H43) |