CEPII, Recherche et Expertise sur l'economie mondiale
An Assessment of May 2008 Proposals for the DDA

Yvan Decreux
Lionel Fontagné

Using a dynamic and sectoral model of the world economy (MIRAGE), we simulate the impacts of the May 2008 drafts circulated by the WTO in the course of the DDA negotiations, augmented by a modest outcome of the negotiation in services. The liberalisation of tariffs is implemented at the granular level of 5,000 products in order to take into account exceptions, flexibilities as well as the non linear design of the formulas. A reduction in domestic support as well as the phasing out of export subsidies are taken into account. We identify a USD 43 bn gain when agriculture and industry are liberalised, and a USD 70 bn gain when a 10 percent reduction of protection in services is added (dollars of 2008). These 43 and 73 bn would add to the world GDP every year in the medium term as compared with a situation without agreement. Half of these gains would be reaped after 5 years of implementation only. Using this criterion of GDP, all regions of the world gain to this deal.

 Keywords : International trade | Trade Negotiations | Doha | DDA | MIRAGE | Computable general equilibrium model | Trade policy | Services

 JEL : D58, F12, F13
CEPII Research Report
N°2008-01, July 2008

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 Fields of expertise

Trade & Globalization