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Inside U.S. Trade: Study Cited as Proof of Small Developing Country Gains in WTO

from Vol. 23, No. 45, November 25, 2005

By Inside U.S. Trade

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Economists on a call organized by Public Citizen’s Global Trade Watch this week said a Nov. 9 World Bank study shows that developing countries are unlikely to realize any substantial benefits from tariff reductions in the ongoing World Trade Organization negotiations. Timothy Wise, deputy director of the Global Development and Environment Institute of Tufts University, and Mark Weisbrot, the co-director of the Washington-based Center for Economic and Policy Research, highlighted in a Nov. 22 conference call with reporters that the study shows that developing countries are expected to get only a small percentage of expected economic gains. The Bank’s Nov. 9 statement said ending all tariffs, subsidies and domestic support programs would boost global gains by $300 billion by 2015, but Wise pointed out that the Bank’s study estimated that only $90 billion, or 30 percent of those gains, would go to developing countries. Moreover, Wise charged that these estimates were significantly exaggerated because they were based on an assumption of full trade liberalization. Wise said the study also contained estimates based on more realistic assumptions about the likely outcome of the Doha talks, which showed a less ambitious outcome would lead to a $16 billion benefit for developing countries.