Payoff from the World Trade Agenda 2013
Contrary to many observers, we do not abandon the Doha Development Round as a lost cause. Instead, this report takes a fresh look, and assesses the potential payoffs from seven agreements that could be concluded in 2013 and ratified in 2014.
We variously use three metrics to quantify potential payoffs for the world: export gains, jobs supported, and GDP gains (or losses averted). The concept of “jobs supported” through larger exports of goods and services is not equivalent to “jobs added,” since two-way trade expansion generally affects the composition of a nation’s employment rather than its absolute level, shifting the labor force from less to more productive sectors of the economy. That said, increased trade means more jobs in the export sector and export jobs are generally better paid than jobs in other sectors of the economy.
In addition, this report examines enhanced WTO approaches to regional trading arrangements, new investment rules, and dispute settlement. The potential payoffs from progress on these subjects do not lend themselves to quantification. The value of contemplated improvements in these areas derives from the “insurance policy” aspect of international trade obligations. “Policy predictability” is an intangible but invaluable asset for business firms planning their trade and investment strategies.
Following recent meetings on the sidelines of the World Economic Forum in January 2013, a broad consensus emerged that potential outcomes for the Bali WTO Ministerial in December 2013 include a trade facilitation agreement, and agreements on issues related to agriculture and least developed countries. While these issues are considered the most likely to attract sufficient support among members in the near-term, there is less optimism that agreements on other issues can be reached in the next year. At the same time, many officials and experts alike believe that the future credibility of the WTO and multilateralism writ large depends critically on achieving a robust outcome at the Bali Ministerial Conference in December 2013.
To that end, our analysis examines areas where agreement is feasible and can be accomplished in an expeditious manner. The objective is to provide a menu of options for what we call a “WTO Recovery Package” that could be advanced in 2013. We do not suggest that the seven agreements assessed here should be viewed as a “package” – the “all-or-nothing” approach would doom the enterprise from the start, just as the “single undertaking” proved to be a fatal flaw in the original Doha Declaration. However, to reap a decent harvest from progress made in the Doha Round, WTO members should gladly accept the variable architecture outlined here.
Report to the ICC Research Fondation, prepared by the Peterson Institute for International Economics