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The DOHA Round After Hong Kong: A Preliminary Evaluation of Progress Made at the Hong Kong Ministerial

Initiative for Policy Dialogue, March 14, 2006

Forecasts that trade ministers would be able to forge at least a facing saving deal in Hong Kong proved correct. But that doesn’t mean the agreement is good, either for the developing countries or the world trading system. At Doha in 2001, members of the World Trade Organization launched a new round of trade negotiations which promised to focus on the problems of the developing countries and redress some of the imbalances of the past. The new ‘Development Round’ would, in the words of the top US trade negotiator, Robert Zoellick, deliver “growth, development and prosperity”. However as the Doha Round agenda begins to take its final shape, it is now clear that the ‘development’ aspect of the round has come to refer almost exclusively to agriculture. This is, in our view, a missed opportunity to make progress on a broad set of issues which would deliver benefits to developing countries.

Even within the narrow scope of agriculture, the Doha Round has been disappointing. World Bank estimates of the potential welfare effects of full agricultural liberalization are of the order of hundreds of billions of dollars. However the gains from the emerging Doha Round agenda established in Hong Kong will be substantially smaller because the promises of all countries fall far short of full liberalization.

The declaration at Hong Kong, of course, was not a deal, but an agreement about the way forward. What happens in the next few months will determine the scope of the gains from the Doha Round and whether, in the end, developing countries are better or worse off as a result. For now, what is clear is that more attention has been focused on the image of progress than on the reality of enhancing incomes and opportunity in the developing world.

By Joseph E. Stiglitz & Andrew Charlton

External Link: http://www0.gsb.columbia.edu/ipd/pub/Stiglitz_and_C...

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