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Trade and Development: The Global Dialogue

This third edition contains:

    • Global Economic Prospects 2005: Trade, Regionalism and Development  (NEW!!!)
    • Prospects for the Global Economy--an new online companion to GEP 2005 (NEW!!!)
    • "Development and Poverty Reduction: Looking Back, Looking Ahead" by J. Wolfensohn and F. Bourguignon
    • "Challenge of Reducing Subsidies and Trade Barriers" by K. Anderson
    • Global Agricultural Trade and Developing Countries ed. A. Aksoy and J. Beghin
    • Trade Note 18: "Mexico Corn: The Effects of NAFTA" by N. Feiss and D. Lederman
    • Trade Note 19: "Agricultural Negotiations: Recent Developments in the Doha Round" by C. Braga
    • IOM-WTO-WB workshop on "Managing the Movement of People:  What can be learned for Mode 4 of the GATS?" (Oct. 4-5, 2004, Geneva)
    • WTO General Council session on Coherence in Global Economic Policymaking (Oct. 22, 2004, Geneva)
    • WTO Accession Seminar, jointly sponsored by the World Bank, BMZ and GTZ (Berlin, Germany, November 19)
    • Conference on Agricultural Trade Reform and the Doha Development Agenda (The Hague, December 1-2)
    • Conference on Putting Development Back into the Doha Agenda: Poverty Impacts of a WTO Agreement (The Hague, December 2-4)

Global Economic Prospects 2005: Trade, Regionalism and Development The proliferation of regional trade agreements is fundamentally altering the world trade landscape. The number of agreements in force surpasses 200 and has risen eight-fold in two decades. Today as much as 40 percent of global trade takes place among countries that have some form of reciprocal regional trade agreement. Global Economic Prospects 2005: Trade, Regionalism, and Development addresses two questions: What are the characteristics of agreements that most promote--or hinder--development for member countries?  Does the proliferation of agreements pose risks to the multilateral trading system, and if so, how can these risks be managed?

The report argues that agreements leading to open regionalism--that is, deeper integration of trade as a result of low external tariffs, increased services competition, and efforts to reduce cross-border and customs delays costs--are effective as part of a larger trade strategy to promote growth. Such regional agreements can complement a strategy that, on the one hand, includes autonomous liberalization to promote productivity gains and, on the other hand, leverages domestic reforms to enhance market access. Although regional agreements can prove beneficial to member countries, they can have adverse effects on excluded countries. Lowering of border barriers around the world is crucial to minimizing these effects. The completion of the Doha Development Agenda by all countries in the World Trade Organization will reduce the risk of trade diversion associated with regional agreements and will decrease trade losses of countries excluded from agreements.  The report was launched today and is available at

New Online Publication-Prospects for the Global Economy This year's Global Economic  Prospects is accompanied by a new online publication--Prospects for the Global Economy.  This interactive publication features: forecast database for all World Bank regions and income groups, including latest macroeconomic data out to 2006; insightful calculators and simulation tools; valuable one-page briefs summarizing countries' external financial position and trade; individual commodity reports and price forecasts; and timely analysis of worldwide economic prospects and risk.  The publication was launched today and can be accessed at

"Development and Poverty Reduction: Looking Back, Looking Ahead" J. Wolfensohn and F. Bourguignon
This paper  was presented at the October 2004 Annual Meetings of the World Bank and IMF.  In Part I, the authors examine the changes in development thinking and practice that emerged during the 1990s. Part II is a summary of the mixed progress made during the past decade: fairly impressive global aggregates, rapid poverty reduction and continued advances in social indicators--but highly uneven distribution of these gains. Part III looks at the world in 2015 and in 2030, and charts out a course of action for the next decade. To read the paper online, please visit

"The Challenge of Reducing Subsidies and Trade Barriers" by K. Anderson
This is one of 10 studies for the Copenhagen Consensus Project that sought to evaluate the most feasible opportunities to improve welfare globally and alleviate poverty in developing countries. Anderson argues that phasing out distortionary government subsidies and barriers to international trade will yield an extraordinarily high benefit-cost ratio. A survey is provided of recent estimates using global economywide simulation models of the benefits of doing that by way of the current Doha round of multilateral trade negotiations. Even if adjustment costs are several times as large as suggested by available estimates, the benefit-cost ratio from seizing this opportunity exceeds 20. That is much higher than the rewards from regional or bilateral trade agreements or from providing preferential access for least-developed countries’ exports to high-income countries. Such reform would simultaneously contribute to alleviating several of the other key challenges reflected in the United Nation’s Millennium Development Goals.  This paper--a product of the Trade Team, Development Research Group--is part of a larger effort in the group to better understand the likely consequences of further trade liberalization for global economic welfare and its distributional effects, particularly for the poor in developing countries.

"The Contribution of Skilled Immigration and International Graduate Students to U.S. Innovation" by G. Chellaraj, K. E. Maskus, A. Mattoo
The impact of international students and skilled immigration in the United States on innovative activity is estimated using a model of idea generation.  In the main specification a system of three equations is estimated, where dependent variables are total patent applications, patents awarded to U.S. universities, and patents awarded to other U.S. entities, each scaled by the domestic labor force.  Results indicate that both international graduate students and skilled immigrants have a significant and positive impact on future patent applications as well as future patents awarded to university and non-university institutions.  The authors' central estimates suggest that a ten-percent increase in the number of foreign graduate students would raise patent applications by 3.3 percent, university patent grants by 6.0 percent and non-university patent grants by 4.0 percent.  However, enrollments of U.S. graduate students have no detectable effect.  There is evidence that bureaucratic hurdles in obtaining student visas are impediments to innovation and may reduce innovation by more than it is increased by the Bayh-Dole Act. Read the paper (pdf - 120k)
New Publications Coming Soon!

Global Agricultural Trade and Developing Countries edited by A. Aksoy and J. Beghin  COMING JANUARY 11, 2005!!!
This book explores the outstanding issues in global agricultural trade policy and evolving world production and trade patterns.  It presents research findings based on a series of commodity studies of significant economic importance to developing countries. Setting the stage with background chapters and investigations of cross-cutting issues, the authors describe trade and domestic policy regimes affecting agricultural and food markets and analyze product standards and compliance costs and their effects on agricultural and food trade. They then examine the impact and effectiveness of preferences and review the evidence on attempts to decouple agricultural support from agricultural output. Finally, they assess the potential gains from global liberalization in agricultural and food markets, and their sensitivity to various assumptions. 

Within this broad context of global agricultural policies and reforms, the authors then present detailed studies of commodity markets that feature distorted policy regimes among industrial and middle-income countries or are important contributors to exports of developing countries. The commodities analyzed are sugar, dairy, rice, wheat, groundnuts, fruits and vegetables, cotton, seafood, and coffee. The studies analyze current policy regimes in key producing and consuming countries, document the magnitude of these distortions, and estimate the distributional impacts-winners and losers-of trade and domestic policy reforms as well as their impact on trade flows and production location.  Global Agricultural Trade and Developing Countries will aid policymakers and researchers in approaching global negotiations and in evaluating domestic policies on agriculture. The report will be launched on January 11, 2005.  This book complements the findings of Agriculture and the WTO: Creating a Trading System for Development.

New Trade Notes
"Mexico Corn: The Effects of NAFTA" (pdf - 92k) by N. Feiss and D. Lederman
Has the North American Free Trade Agreement (NAFTA) hurt poor corn farmers in Mexico?  This is the central question tackled in Feiss and Lederman's new Trade Note.  Several advocacy groups have argued that NAFTA has helped increased rural poverty in Mexico by lowering corn prices and forcing many famers out of the agriculture sector.  Three studies that examine the domestic price trends in Mexico, however, indicate that NAFTA may not be to blame.  (For full text, click here)      

"Agricultural Negotiations: Recent Developments in the Doha Round" (pdf - 49k) by C. Braga 
On Agust 1, 2004, the WTO General Council reached a decision on frameworks to continue multilateral trade negotiations under the Doha Development Agenda.  What does this mean for agricultural trade--one of the central features of what is now known as the "July Package"?  In this note, the author answers the question by not only detailing the various aspects of the framework for establishing modalities in agricultue (export subsidies, domestic support, market access, cotton) but also places "July Package" in a historical context; he provides a brief history of  agricultural negotiations starting with the GATT in 1947 to the present Doha Agenda.  (For full text, click here)

For the record...
On October 4-5, 2004, a workshop was held in Geneva on the topic "Managing the Movement of People:  What can be learned for Mode 4 of the GATS?".  This event was co-sponsored by the International Organization of Migration (IOM), the WTO and the World Bank.  A key objective was to facilitate dialogue between trade and migration officials as well as other stakeholders from both industrial and developing countries.  The GATS (the WTO services agreement) has so far failed to deliver liberalization of Mode 4 (the temporary migration of service providers), and therefore many developing countries are taking a purely defensive interest in the services negotiations.  The workshop examined existing national, bilateral and regional temporary migration to see if there were elements that could help galvanize the GATS negotiations.  One general conclusion was that labor mobility can only benefit from the WTO mechanism of reciprocal market opening,  if the features that make it different from trade can be  adequately addressed in the multilateral context. To access the agenda of the workshop and other details, please visit the website.  

On October 22, 2004, the WTO General Council hosted a session on Coherence in Global Economic Policymaking.  The interventions by Mr. Wolfensohn, as well as those made by Dr. Supachai (WTO Director General) and Mr. de Rato (IMF Managing Director) and relevant background documents can be found on the WTO website.

On November 19, 2004, the World Bank in cooperation with German Ministry for Economic Cooperation and Development (BMZ) and the Deutsche Gesellschaft fuer technische Zusammenarbeit (GTZ) will host a seminar on the topic of "Accession to the WTO: Country and Technical-Assistance Experiences".  The seminar will take place at the GTZ-Haus Conference Center in Berlin, Germany (Reichpietschufer 20, 10785) from 10 a.m. to 12 p.m.  To register, please complete the attached form (pdf - 16k) and return it to:

GTZ-Büro Berlin
Reichpietschufer 20
10785 BERLIN
Fax: +49 (0) 30 – 72 614 130

Conference on "Agricultural Trade Reform and the Doha Development Agenda": The most important and yet most difficult part of the WTO’s Doha negotiations concern agricultural policies. This project-- undertaken in collaboration with leading analysts -- examines the various elements of the negotiations, especially those most relevant to developing countries, and outlines a set of possible outcomes. These scenarios are explored using detailed data on protection developed by CEPII and the International Trade Centre. Implications of reforms are then analyzed using global models, to show their likely economic consequences for various groups of developing countries and for the world as a whole. A key result emerging from initial work is that, because of extensive binding overhang in market access and domestic support,  extremely deep cuts in bound rates, and strong limits on "sensitive products" would be required to obtain substantial improvements in market access under the WTO’s July Framework. A key goal of this project is to improve the information available to policy makers and, in particular, to allow countries to identify the real economic impacts of proposed agreements. Initial results will be available following a preliminary conference being held in the Hague, December 1-2.

Contact: Will Martin ( or Kym Anderson (, The World Bank

Conference on "Putting Development Back into the Doha Agenda: Poverty Impacts of a WTO Agreement": The objective of this study is to help identify ways in which the negotiations might be given a stronger development orientation and particularly a greater focus on successful poverty reduction in poor countries. This will involve making recommendations on specific trade reform options--including identifying approaches that will bring down tariffs on products of particular interest to the poor in developing countries. It will also involve recommendations on complementary development policy reforms that will allow developing countries to take greater advantage of the opportunities created by trade and will assess the longer run productivity impacts of these changes. Initial results will be available following a conference to be held in The Hague, December 2-4.

Contact: Thomas Hertel ( or L. Alan Winters (

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