1 / 26

Trade Policy and Global Poverty William R. Cline

Trade Policy and Global Poverty William R. Cline. Global Free Trade Impact:. Lift 500 million out of poverty in 15 years $200 billion annual long-term income gain for developing countries At least half from removing industrial country protection

guinivere-crolly
Download Presentation

Trade Policy and Global Poverty William R. Cline

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Trade Policy and Global PovertyWilliam R. Cline

  2. Global Free Trade Impact: • Lift 500 million out of poverty in 15 years • $200 billion annual long-term income gain for developing countries • At least half from removing industrial country protection • This is twice annual aid, and it benefits industrial country consumers • Half of gains are in agriculture

  3. Poverty Intensity of Imports from Developing Countries (%)

  4. Growth Elasticity of Poverty • Lognormal distribution: elasticity function of inequality (G), ratio of average to poverty income (z) • Lower where inequality higher • Higher where z higher • Asia typically 3 or more • Typically lower in Latin America (1 to 2) because high G; and in Africa (1 to 2) because low z

  5. Special-regime export growth, 1981-2001 gx* = -6.9 + 1.93 gw (2.5) +0.41 gylag (1.6) +0.079 mfshr (1.97) +7.76 R*lag (2.36) -.0004 y*lag (1.0) +8.83 LOME (2.36) +7.23 CBI (2.39) +1.66 ATPA (0.29) -10.8 SSA (2.36) Adj R2 =.016; # obs. = 1412

  6. Total Tariff Equivalent of Agricultural Protection Against Developing Countries(percent tariff equivalent)

  7. Aggregate Measure of Protection (AMP, %)

  8. DC agricultural protection and global poverty π=εw {ΦR[θRγR-] +ΦUθUγU} π= proportionate rise in poverty ε= poverty elasticity w= % increase in world price Φ=share of total poor in sector θ=share of food in budget γ= elast. food price wrt world price =elast. farm income wrt farm price =elast. farm price wrt world price

  9. LDC food trade and comparative advantage

  10. Decomposition of static welfare gains

  11. MFN Tariffs (%)

  12. Elasticity of outputw.r.t. trade/GDP

  13. Long-term Impact of Free Trade on Global PovertyReduction (millions)

  14. Reduction in Poverty from Global Free Trade (millions)

  15. Blueprint for a Doha Deal • DCs: Phased deep tariff cuts or elimination, including in agriculture, textiles and apparel; • DCs: Eliminate agricultural subsidies or fully “decouple” from production; • Middle-income DGCs: cut protection at least 50-60 percent; longer phase-in. • Second track: immediate free entry from LDCs, HIPCs, SSA; 10-year tax holiday on FDI

  16. Test for Preference Erosion ($bn gains)

More Related