Economic Impact of potential outcome of the DDA

• Published in: Policy File 2009
• Main Authors: Decreux, Yvan, Fontagne, Lionel
• Format: Report
• Language: English
• Subjects: Centre d'Etudes Prospectives et d'Informations Internationales; Economic policy; International trade

Using a dynamic computable general equilibrium model of the world economy (MIRAGE), we simulate the impacts of the July 2008 drafts circulated by the WTO before the DDA negotiations stopped, augmented by a modest outcome of the negotiation in services. The liberalisation of tariffs is implemented at the granular level of 5,113 products in order to take into account exceptions, flexibilities as well as the non linear design of the formulas. A reduction in domestic support and the phasing out of export subsidies are taken into account. We identify a USD 57 bn world GDP gain when agriculture and industry are liberalised, USD 68 bn gain when a 3 percent reduction of protection in services is added in certain services sectors and for the concerned countries. Lastly, a rough calculation of gains associated with trade facilitation suggests at least a doubling of the expected gains. In total, the 167 bn gains, identified here in a scenario combining a liberalisation in trade in goods and services with trade facilitation, would be added to the world GDP every year in the medium term as compared with a situation without agreement.