What Next for Multilateral Trade Talks? Quantifying the Role of Negotiation Modalities

Abstract

AbstractWhat are the lessons from the Doha Development Agenda (DDA) from a forward-looking point of view? A decade of negotiations is likely to go nowhere. This paper argues that absence of a landing-zone was in the data. Quantitative tools modelling the detail of the modalities predicted failure but were not taken seriously: the design of the negotiations implied that any achievements of the Round could only be limited. Such a weakness was induced by the way multilateral negotiations were organized – in separate groups, without much consideration for, or understanding of, how the different elements added up to more than the sum of the parts. We put sensible figures on that argument by using a dynamic computable general equilibrium model of the world economy, addressing exceptions, flexibilities, as well as the non-linear design of the liberalization formulas, a reduction in domestic support, the phasing out of export subsidies in agriculture, and trade facilitation. Our conclusion is that negotiators have to go back to simplicity and re-bundle the topics if they wish to revamp multilateral negotiations.