# **Executive Summary**

The WTO membership can contribute to a more robust recovery from the global recession by rapidly concluding the Doha Development Agenda (DDA). This will help by: (i) reducing the probability that governments will resort to protectionism; (ii) assisting governments to reduce fiscal expenditures once economies recover by allowing them to credibly pre-commit to lowering agricultural subsidies; and (iii) bolstering the prospects for cooperation in other critical areas – such as climate change, aid for trade and services regulation.

# **What’s on the table?**

Skepticism about what Doha offers is based primarily on a perception that proposals now on the table do too little to reduce applied average levels of protection. This is misconceived: the Doha round is first and foremost about creating greater _security_ of market access.

**_Improved security of market access._** Estimates of the value of the trade or income gains of the DDA completely ignore what is arguably its greatest benefit: enforceable and thus credible commitments by governments not to raise protection/support for domestic industries above certain levels _and_ to abide by certain rules of the game for trade-related policies. For example, apart from constraining the scope for tariff protection in all goods, Doha would ban agricultural export subsidies in the industrial countries and sharply reduce the scope for distortionary domestic support—by 70 per cent in the EU and 60 per cent in the US – precluding the re-emergence of price-depressing subsidies in the future. Issues of profound trade significance, such as agricultural subsidies, can only be negotiated multilaterally and not regionally. The resulting restraint, e.g. on subsidies for products such as cotton, peanuts and sugar, is of particular importance for many developing countries. Expanded coverage of services policy commitments would provide greater certainty to trading firms regarding the conditions of competition they will confront in foreign markets.

The value of such policy commitments has been demonstrated in the global downturn. Although a number of countries have put in place some protectionist measures, there has not been a major reversal of liberalization. Concluding Doha would strengthen the valuable role the WTO is already playing in restraining protectionism.

**_New market access_** . The DDA offers some new liberalization and there will be significant market access benefits from what is now on the table. The average farm tariffs that exporters face would fall to 12 per cent (from 14.5 per cent); and the tariffs on exports of manufactures to less than 2.5 per cent (from about 3 per cent). As important for developing countries, tariff peaks for laborintensive manufactures would be reduced significantly. New analysis using the World Bank model suggests global income gains from improved market access for goods resulting from what is now on the table – taking into account exceptions for sensitive products – could be as large as $160 billion.

**_Improving environmental sustainability_** . Agricultural support programs have led to the use of production methods that are excessively polluting and depleted natural resources. Over 75 percent of global fish stocks are over-exploited – the resulting annual loss for the world economy is US$50 billion. Many small island states and poor coastal regions in developing countries depend on fisheries for livelihood and food security. Phasing out fishery subsidies would be an important part of the solution. Similarly, removing policies that restrain trade in efficient environmental goods and services could foster a greener quality of growth.

**_Expanded opportunities for poor countries_** . Enhanced market access for the least-developed countries (LDCs) as a result of implementation of the “duty free and quota free” proposal and an

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