Antoine Bouët

A consistent, ad-valorem equivalent measure of applied protection across the world: The MAcMap-HS6 database

MAcMap-HS6 is a database providing with a consistent, ad valorem equivalent measure of tariff duties and tariff rate quotas for 163 countries and 208 partners, at the six-digit level of the Harmonized System (5,111 products). Based on a joint effort by ITC (UNCTAD-WTO, Geneva) and CEPII (Paris) to systematically collect and harmonize the relevant information, we describe here the methodology used in MAcMap-HS6 to compute and aggregate an ad valorem equivalent of applied protection, well suited for analytical purposes (in particular computable general equilibrium analysis). Special emphasis is put in minimizing the endogeneity bias in the aggregation procedure, by making use of a weighting scheme based on groups of countries (reference groups). Structural differences in export specialization, as reflected in different unit values, are also acknowledged when computing ad valorem equivalents, and tariff rate quota rents are computed. The resulting quantitative assessment is illustrated by giving an overview of ad valorem equivalent, applied protection across the world, in terms of average as well as distribution.

Multilateral Agricultural Trade Liberalisation: The Contrasting Fortunes of Developing Countries in the Doha Round

An applied general equilibrium model is used to assess the impact of multilateral trade liberalisation in agriculture, with particular emphasis on developing countries. We use original data, and the model includes some specific features such as a dual labour market. Applied tariffs, including those under preferential regimes and regional agreements, are taken into account at the detailed product level, together with the corresponding bound tariffs on which countries negotiate. The various types of farm support are detailed, and several groups of developing countries are distinguished. Simulations give a contrasted picture of the benefits developing countries would draw from the Doha development round. The results suggest that previous studies have neglected preferential agreements and the binding overhang (in tariffs as well as domestic support), and have treated developing countries with a high level of aggregation and been excessively optimistic about the actual benefits of multilateral trade liberalisation. Regions like sub-Saharan Africa are more likely to suffer from the erosion of existing preferences. The main gainers of the Doha Round are likely to be developed countries and Cairns Group members.

Assessing Applied Protection Across the World

This paper presents MAcMap-HS-6, a database providing a consistent, ad valorem equivalent measure of tariff duties and tariff rate quotas for 163 countries and 208 partners, at the six-digit level of the Harmonized System (5111 products), accounting for all preferential agreements.We describe the methodology used to compute and aggregate an ad valorem equivalent of applied protection. Emphasis is placed on minimizing the endogeneity bias in the aggregation procedure, while acknowledging structural differences in export specialization.The resulting quantitative assessment is illustrated by giving an overview of applied protection across the world in 2001, in terms of average as well as distribution.

More or Less Ambition in the Doha Round: Winners and Losers from Trade Liberalisation with a Development Perspective

What is at stake in the standoff and suspension of the Doha Round of trade talks? What impact would an agreement based on greater or lesser levels of ambition have on developing countries, whose economies are relatively dependent on agriculture? Using the MIRAGE computable general equilibrium model of the global economy, in this article we compare different scenarios for the Doha agricultural and NAMA negotiations, taking real numbers from the proposals on the table from the United States (US) and the European Union (EU) in December 2005. The results for both scenarios demonstrate the high stakes for successful completion of this negotiation given the positions articulated by the countries involved. A cooperative reform outcome by the US and the EU - based on the most ambitious components of their negotiating proposals - delivers noticeably more benefits than an unambitious outcome. We measure the degree of ambition in each scenario by the construction of a Mercantilist Trade Restrictiveness Index and focus the analysis on the impacts on developing countries. Copyright 2007 The Authors Journal compilation 2007 Blackwell Publishing Ltd .

The Potential Cost of a Failed Doha Round

This study presents scenarios where countries decide to increase current tariff rates to protect domestic industries or raise revenues in order to finance domestic programs. Using the highest applied or bound rate imposed by countries during the period from 1995–2008 as an indicator, it offers new conclusions on the economic cost of a failed Doha Round. In a scenario where applied tariffs of major economies would go up all the way to currently bound tariff rates, world trade would decrease by 7.7 percent. In a more modest scenario where countries would raise tariffs to maximum rates applied over the past 13 years, world trade would decrease by 3.2 percent. These increases in duties would reduce world welfare by USD353 billion under the first scenario, by USD134 billion under the more modest scenario. This study concludes there would be a potential loss of at least USD1,064 billion in world trade if world leaders were to fail to conclude the Doha Development Round of trade negotiations in the next few weeks and were to implement subsequently protectionist policies such as observed since the end of the Uruguay Round. Another point of view is to consider the WTO agreement as an insurance scheme against potential trade wars. So we compare a resort to protectionism when the DDA is implemented with a resort to protectionism when the DDA is not implemented. The findings show that this trade agreement could prevent the potential loss of US

The Costs and Benefits of Duty-Free, Quota-Free Market Access for Poor Countries: Who and What Matters

809 bn of trade and, therefore, acts as an efficient multilateral insurance scheme against the adverse consequences of trade “beggar-thy-neighbour” policies.

Trade protection and tax evasion: Evidence from Kenya, Mauritius, and Nigeria

This paper examines the potential benefits and costs of providing duty-free, quota-free market access to the least developed countries (LDCs), and the effects of extending eligibility to other small and poor countries. Using the MIRAGE computable general equilibrium model, it assesses the impact of scenarios involving different levels of coverage for products, recipient countries, and preference-giving countries on participating countries, as well as competing developing countries that are excluded. The main goal of this paper is to highlight the role that rich and emerging countries could play in helping poor countries to improve their trade performance and to assess the distribution of costs and benefits for developing countries and whether the potential costs for domestic producers are in line with political feasibility in preference-giving countries.

Why is the Doha Development Agenda Failing? And What Can Be Done? A Computable General Equilibrium–Game Theoretical Approach

We examine the effect of trade protection rates on evasion in three African countries Kenya, Mauritius, and Nigeria. In capturing the effect of trade protection on tariff evasion, we use a much improved measure of trade protection (MAcMap-HS6 2001 and 2004). For two of these countries, this dataset allows the novelty of using variation in trade protection across product, time, and trading partners leading to significantly refined estimates of evasion elasticity relative to existing studies on tariff evasion. We find a robust evidence for positive elasticity of evasion with respect to tariffs in Kenya and Nigeria with relatively weaker evidence for Mauritius. Our results match the rankings of countries in institutional quality. Greater responsiveness of evasion to the level of tariffs is established in Nigeria (comparatively weak institutional quality) vis-à-vis Kenya, and in Kenya vis-à-vis Mauritius (comparatively good institutional quality). This pattern is preserved even when focusing on same set of trading partners and same set of imported products for the three countries. This result is robust to controlling for protection on related products (that creates incentives/ opportunities for evasion) and also for degree of differentiation of the product and some other characteristics.

A Global Assessment of the Economic Effects of Export Taxes

We use a world computable general equilibrium model to simulate 143 potential trade reforms and seek solutions to the issues hampering progress in the Doha Development Agenda (DDA). Inside the domain defined by all these possible outcomes, we apply the axiomatic theory of bargaining and select the Nash solution of cooperative games. The solutions vary according to the objective functions adopted by the trade negotiators. When real income is the objective and services are excluded, or when optimising terms of trade is the objective, the Nash solution is the status quo. Trade liberalisation is feasible only when the negotiators focus on national exports or gross domestic product (GDP). Our assessment of some possible solutions reveals that excluding members having a GDP below a certain threshold improves the bargaining process, regardless of the governments’ objective. Formation of coalition, such as the G20, constitutes an option for its members to block outcomes imposed by rich members. We also find that side payments may be a solution, but represent a very high share of the global income gain.

Research and development, voluntary export restriction and tariffs

This study has been undertaken to understand and evaluate the potential negative consequences of export taxes which are implemented by many countries today and which are not disciplined by any international agreement. This paper uses a new detailed global dataset on export taxes at the HS6 (Harmonized System 6 level) level and the MIRAGE (Modeling International Relationships in Applied General Equilibrium) global computable general equilibrium model to assess the impact of export taxes on the world economy. We find that limitations on export taxes would have worldwide effects: the average export tax on global merchandise trade was 0.48 percent in 2007, with the bulk of these taxes imposed on energy products. The removal of these taxes would increase global welfare by 0.23 percent, which is a larger figure than the expected gains from the World Trade Organization’s Doha Development Round. Both developed and emerging economies, such as China and India, would gain from such policies, even if they currently impose export taxes. Medium and small food-importing countries without market power (such as the least-developed countries) would also benefit from the elimination of export restrictions, especially during food crisis situations. Both the energy sector and the export taxes implemented by Commonwealth of Independent States countries appear to play a critical role in the overall economic impact of such a policy change. However, the fact that some countries, such as Argentina, would experience income losses due to such a policy change is a major challenge to overall positive reform in this area.