Delivering on Doha’s Promise: Delivering on Doha’s Promise: The Role of Rich Country PoliciesThe Role of Rich Country Policies
Nancy BirdsallNancy BirdsallCenter for Global DevelopmentCenter for Global Development
Cancun Trade and Development Cancun Trade and Development SymposiumSymposiumSeptember 11, 2003September 11, 2003Cancun, MexicoCancun, Mexico
Why a CDI?
Rich country policies matter for development
Time to hold rich countries accountable
Need a tool to measure rich country commitments to development – ex: Millennium Development Goal 8
What is the CDI ?
Measure of policyMeasure of policy effort effort on on policies that affect development policies that affect development prospects of poor countries prospects of poor countries
The index ranks 21 countries –The index ranks 21 countries –members of the DAC (except members of the DAC (except Luxembourg)Luxembourg)
Components AidAid TradeTrade InvestmentInvestment EnvironmentEnvironment MigrationMigration PeacekeepingPeacekeeping
Overall Scores
0 1 2 3 4 5 6
NetherlandsDenmarkPortugal
New ZealandSwitzerland
GermanySpain
SwedenAustriaNorway
United KingdomBelgiumGreeceFrance
ItalyIrelandFinlandCanada
AustraliaUnited States
Japan
Aid Trade Investment Environment Migration Peacekeeping
Goals of the CDI
Educate and inspire to action the rich-world public and policy makers
Motivate a race to the top among OECD countries
Spark new research and data collection
Foster debate about the role of rich country policies in development
Trade
Aggregate measure of Aggregate measure of protection in protection in tariff equivalenttariff equivalent terms:terms:
TariffsTariffs Non-tariff barriers Non-tariff barriers SubsidiesSubsidies
Revealed OpennessRevealed Openness
Total Tariff Equivalent of Agricultural Protection Against Developing Countries
(percent tariff equivalent)
US Canada EU Japan
Tariffs 11.2 62.6 67.4 202.3
Tariff-Equivalent of domestic subsidies
20.8 1.8 19.6 9.8
Total Tariff-Equivalent
34.3 65.5 100.2 231.9
Source: William Cline, “An Index of Industrial Country Trade Policy toward Developing Countries,” CGD Working Paper #14, October 2002.
Manufac-tures/ Other Textiles Apparel Agriculture
Country Tariffs Tariffs Non-tariff Total1 Tariffs
Non-tariff Total1 Tariffs
Subsi-dies Total1
(%) --------- (%) --------- --------- (%) --------- --------- (%) --------- Australia 13.4 17.0 7.1 25.3 29.3 8.3 40.0 2.5 2.6 5.2 Austria 5.0 9.7 5.1 15.3 12.1 5.2 17.9 67.0 19.5 99.6 Belgium 5.0 9.7 5.1 15.3 12.1 5.2 17.9 67.0 20.6 101.4 Canada 5.4 15.7 9.1 26.2 21.2 11.4 35.0 63.0 1.8 65.9 Denmark 5.0 9.7 5.1 15.3 12.1 5.2 17.9 67.0 18.9 98.6 Finland 5.0 9.7 5.1 15.3 12.1 5.2 17.9 67.0 18.0 97.1 France 5.0 9.7 5.1 15.3 12.1 5.2 17.9 67.0 18.1 97.2 Germany 5.0 9.7 5.1 15.3 12.1 5.2 17.9 67.0 18.3 97.6 Greece 5.0 9.7 5.1 15.3 12.1 5.2 17.9 67.0 22.0 103.7 Ireland 5.0 9.7 5.1 15.3 12.1 5.2 17.9 67.0 23.6 106.4 Italy 5.0 9.7 5.1 15.3 12.1 5.2 17.9 67.0 13.5 89.5 Japan 3.6 8.5 0.0 8.5 12.5 0.0 12.5 202.0 9.8 231.6 Netherlands 5.0 9.7 5.1 15.3 12.1 5.2 17.9 67.0 12.8 88.4 New Zealand 12.3 8.6 7.1 16.3 25.0 8.3 35.4 5.0 0.0 5.0 Norway 3.6 13.8 7.1 21.9 17.5 8.3 27.3 273.0 8.6 305.1 Portugal 5.0 9.7 5.1 15.3 12.1 5.2 17.9 67.0 15.0 92.1 Spain 5.0 9.7 5.1 15.3 12.1 5.2 17.9 67.0 18.0 97.1 Sweden 5.0 9.7 5.1 15.3 12.1 5.2 17.9 67.0 15.1 92.2 Switzerland 1.9 0.7 7.1 7.8 17.5 8.3 27.3 161.0 10.0 187.1 U.K. 5.0 9.7 5.1 15.3 12.1 5.2 17.9 67.0 16.3 94.2 United States 4.6 11.2 9.1 21.3 13.3 11.4 26.2 11.0 20.8 34.1
0 1 2 3 4 5 6 7 8
NorwaySwitzerland
JapanCanadaIrelandGreece
BelgiumAustria
DenmarkGermany
FranceFinland
SpainUnited
SwedenPortugal
ItalyNetherlandsNew Zealand
AustraliaUnited States
Trade Results
Global Free Trade Can Reduce Poverty in Developing Countries by:
1. Opening Agriculture Markets
2. Raising Unskilled Labor Wages
3. Boosting Productivity
4. Inducing Investment
5. An early harvest: free market access for poor nations
Liberalization of agricultural markets
Agricultural protection against developing countries:
34 percent in the United States 100 percent in the EU 230 percent in Japan 65 percent in Canada Free trade in agriculture would reduce global
poverty by an estimated 200 million people, or about 7 percent.
Source: William Cline, “Trading Up: Trade Policy and Global Poverty,” CGD Brief 7, September 2003.
The Impact of Global Agricultural Liberalization on Poverty in Selected Countries
Biggest Reductions in Poverty, (%)
Biggest Reductions in Poverty, (millions)
Malawi (15.2) China (72.1)
Vietnam (15.1) India (59.2)
Kenya (14.8) Bangladesh (12.0)
Tanzania (12.0) Pakistan (10.4)
Bangladesh (11.8) Indonesia (9.9)
Source: William Cline, “Trading Up: Trade Policy and Global Poverty,” CGD Brief 7, September 2003.
Raising Unskilled Labor Wages
Global free trade would boost world income by about $230 billion annually
About $140 billion in gains for industrial countries and $90 billion for developing countries
In developing countries, real wages of unskilled labor would rise by an estimated 5
Source: William Cline, “Trading Up: Trade Policy and Global Poverty,” CGD Brief 7, September 2003.
Boosting Productivity
Increasing trade spurs productivity, which in turn supports long-term increases in per capita income.
Productivity gains in developing countries would lift an estimated additional 200 million people out of poverty in the long term.
Source: William Cline, “Trading Up: Trade Policy and Global Poverty,” CGD Brief 7, September 2003.
Inducing Investment
Increased trade opportunities induce investment, which also generates long-term increases in per capita income.
Capital investment effects could conservatively reduce the number living in poverty by an additional 300 million people.
Source: William Cline, “Trading Up: Trade Policy and Global Poverty,” CGD Brief 7, September 2003.
An early harvest: free market access for poor nations
LDCs, SSA and HIPC countries account for 64 countries with a combined population of 1 billion, of whom 715 million live in poverty.
Estimated growth effects from preferential trade agreements:
US Caribbean Basin Initiative 7-8% EU Lome-Cotonou arrangement 7-8% Andean Trade Preference Act 2 %
Source: William Cline, “Trading Up: Trade Policy and Global Poverty,” CGD Brief 7, September 2003.
Poverty Intensity of US Imports from Developing Countries
Regions Headcount Weighting
Income Share Weighting
Total 38.11 8.16
LDC 69.2 44.1
HIPC 66.1 38.7
SSA 70.3 55.8
Source: William Cline, “Trading Up: Trade Policy and Global Poverty,” CGD Brief 7, September 2003.
Impact of Global Free Trade on Global Poverty Reduction (in millions, cumulative)
Source: William Cline, “Trading Up: Trade Policy and Global Poverty,” CGD Brief 7, September 2003.
0
200
400
600
800
Direct Effects Productivity Effects Investment Effects
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