World exports could increase to US$359 billion a year if the World Trade Organisation’s Doha Development Agenda negotiations are completed, according to a new study commissioned by the European Commission. The study, published on 31 October by the Paris-based Centre for International Prospective Studies (CEPII), also concluded that by tearing down trade barriers on certain sectors such as chemicals, machinery and electronics, world exports would grow by a further US$146 billion a year, totalling a US$505 billion increase on an annual basis.
The report “Economic impact of potential outcome of the DDA II” states that this increase would come from the liberalisation of industrial goods, agriculture, services and from the removal of red tape. It also suggests that developing, emerging and developed countries would all benefit from the current Doha deal which is on the table in Geneva, and that, if adopted, the deal would lead to 0.2% of additional economic growth at a global level. The EU would benefit from a US$30 billion increase in GDP on an annual basis. European agricultural and industrial exports would rise to US$9.78 billion and US$52.98 billion respectively by 2025.
Cutting the red tape on cross-border trade would alone lead to almost half the global gains from this part of the agreement, the report says. Indeed, “the removal of red tape in trade … is of major importance for a successful Doha Development deal. Almost half of the global gains (US$100 billion in world exports) are to be reaped from this part of the agreement. But the study concluded that “the allocation of gains becomes more favourable to developing countries when trade facilitation is included.”
Another significant part of the report shows that going ahead with the Doha deal would not negatively affect the wages of EU workers. On the contrary, salaries for both skilled and unskilled workers would increase by 0.3%.
But one of the consequences of the long-term approach of a successful Doha deal would be its negative impact on services exports for Southeast Asia, which might drop US$3.48 billion in 2025 from 2004, whereas the EU would still gain US$15.41 billion in the same area. Besides, industrial expansion for the EU and the US would be double the value for Asia and 2.8 times faster in agricultural growth.