EU Says Doha Deal Could Boost World Exports by $505 Billion, If Revived

By Juliane von Reppert-Bismarck | November 1, 2011

Moribund talks for a global accord to open up trade could boost world exports by more than half a trillion dollars a year if they were revived and completed, lifting global economic growth by 0.2 percent, an EU report said on Monday.

The Doha round of global trade talks — launched almost ten years ago at the World Trade Organization — has failed to reconcile rich and emerging nations over how to tear down long-established barriers protecting domestic farming, industrial and services sectors.

Attempts for a scaled-back accord have also failed and though no one has dared declare the round dead, trading nations and business have turned their attention to bilateral treaties, investment opportunities and the possibility of smaller sector-specific accords.

But a study commissioned by the EU’s executive Commission has found that liberalizing trade in industrial goods, farm products and services and cutting red tape at borders could add $359 billion per year to world exports.

Exports could grow by a further $146 billion a year if barriers guarding sensitive sectors such as chemicals, machinery and electronics could be torn down, the report says.

Cutting red tape at border crossings – an initiative that the WTO has said should be tackled even in the absence of a comprehensive Doha deal – would alone account for $100 billion in additional exports, the study says.

Estimates about the economic gains of a Doha deal have varied from predictions of a one-time gain of $60 billion to those expecting hundreds of billions in gains each year, with the lower estimates eroding interest in a deal among the global business community.

“It is simply not possible to measure with any accuracy the results of a negotiation in which so many fundamental variables regarding market access remain undefined,” said a U.S. official, commenting on the report.

“We have not completed analysis of the study, but are skeptical about the assumptions on which it seems to be based.”

The European Commission defended Monday’s report in a statement as being “based on new data for the world economy, which includes the impact of the financial and economic crisis.”

Estimated gains in Monday’s report include tariff cuts on industrial sectors and environmental goods such as wind and solar energy components. Previous negotiations on such tariffs cuts triggered fierce divisions among WTO members and are broadly not expected to resume soon.

Reflecting gloomy expectations on trade, G20 leaders meeting in Cannes to discuss global economic crisis this week are expected to reiterate merely their commitment to global trading rules and promise to resist protectionist urges accompanying the economic downturn.

Leaders meeting in Cannes on Nov. 3-4 are intent on sending a reassuring message, via economic pledges, to reduce economic imbalances; that the euro zone’s debt crisis is under control, and that any risks to the global recovery are being taken care of.

But concern over the small print of Europe’s crisis package and efforts to coax China into contributing funds threaten to dominate the gathering.

(Reporting by Juliane von Reppert-Bismarck; additional reporting by Catherine Bremer in Paris and Doug Palmer in Washington)

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