agricultural policies relative to restrictions on market access (just 7 percent, compared with the 93 percent contribution of import tariffs), those CGE modeling results were treated with some scepticism.<sup>15</sup> To convince sceptics required examining the issue from first principles, to show that the 93 percent result – which is supported by the modeling studies of two other institutions (USDA 2001 and OECD 2006) – is not just an artifact of the computable general equilibrium models they use.<sup>16</sup> A study by Anderson, Martin and Valenzuela (2006) was designed to provide more intuition for this repeated research finding. To ensure transparency, it used widely available data and focused on a simple back-of-the-envelope model rather than a computable general equilibrium (CGE) model with its inherent complexities. Its results confirmed the overwhelming importance of market access found in the studies using CGE models.

Despite these results, domestic support should not be ignored in the Doha negotiations, not least because it is extremely important for some products of great interest to developing countries. This is particularly so for cotton, where Anderson and Valenzuela (2007) estimate that abolishing domestic subsidies on cotton would provide almost 80 percent of the $147 million in total welfare gains to Sub-Saharan Africa from cotton market reform. There is also a systemic risk that restraints on market access barriers, if unaccompanied by restraints on domestic support, could lead some high-income countries to replace market access barriers with distorting domestic support. The key policy message to draw from these results, though, is that reductions in domestic support cannot, alone, be expected to realize very much of the potential global trade and welfare gains sought from the Doha agricultural negotiations, and that achieving improvements in market access is extremely important for a successful outcome in these negotiations.

# **Quantifying Economic Benefits of Reducing Barriers to International Trade and Migration**

In the light of the above modeling results showing the costs of current policies, we focus now on assessing in turn the benefits from the three opportunities identified earlier in the paper to reduce those distortions, namely via the Doha Development Agenda of the World Trade Organization (WTO), via sub-global preferential trade reforms such as the Free Trade Area of the Americas (FTAA) initiative, and via allowing more international movement of workers.

## **_Prospective benefits from the Doha Development Agenda_**

Anderson, Martin and van der Mensbrugghe (2006a,b) examine in great detail the comparative static consequences of the main options that have been canvassed in the Doha Round. They show a range of global welfare gain estimates via partial goods

> 15 One reason countries put different emphases on the three pillars, and perhaps a reason the EU seeks to downplay the importance of market access, is that a large share of support for its farmers – and most of its food processors – comes from market access barriers. By contrast, domestic support measures are much more important in the United States.

> 16 Hoekman, Ng and Olarreaga (2004), using a simpler partial equilibrium framework and extremely detailed information on tariffs plus official WTO data on domestic subsidies, also established the importance of agricultural market access barriers. Their findings were even stronger than the 93 percent result cited above. They found that reductions in domestic support would yield less than one percent of the gains obtainable from reductions in market access barriers.

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