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Protectionism Block Seen as Doha Benefit

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In a workshop on recent analyses of Doha attended by leading trade economists at the invitation of the World Trade Organization, a block on protectionism and its corresponding increases in tariffs was seen as potentially the biggest benefit from Doha’s efforts to free up world trade.

The workshop was aimed at reminding negotiators of the stakes in keeping the world economy moving forward, according to a Reuters report on Tuesday, and quantifying the now-nine-year-old Doha effort was seen as “extremely difficult.” But economists also said that the so far modest gains from current agreements could be improved, if those services accounting for 80% of rich economies and increasing shares of developing economies could be opened up by negotiators.

David Laborde, a researcher at Washington's International Food Policy Research Institute (IFPRI), said that many states engaged in restrictions during the food crisis of 2008, and that Doha represented an insurance policy against increased protectionism and its associated costs resulting from failed negotiations.

If an agreement on agriculture and industrial goods could be reached, annual world real income could rise by $50 billion through current proposals under consideration. If, on the other hand, countries raise tariffs to limits already committed to—a failure of Doha—the losses to world income could total $350 billion, Laborde said. A Doha agreement could limit those losses and might be quantifiable at $200 billion.

But there is disagreement on those numbers; Will Martin, a senior World Bank researcher, put the value of current proposals at a potential $121 billion, with 75% going to rich nations, and Jeffrey Schott, a senior fellow at the Peterson Institute for International Economics, said current proposals would raise world exports by $90 billion per year, and that would not persuade leaders to agreement.