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Impacts of Doha by Mikhil Muthreja

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Impacts of Doha by Mikhil Muthreja
THE IMPACT OF FULL DOHA SCENARIO

1. Simulation Design: Using the GTAP model we simulate a moderate Doha scenario where developed countries cut their agricultural and industrial tariffs by 36 percent whereas the developing countries, including India, cut their agricultural and industrial tariffs by 24 percent. In addition, both the developed and developing countries carry out a one-third reduction in domestic agricultural subsidies and a complete elimination of agricultural export subsidies. The GTAP simulation results for the Doha scenario are presented in Table 8.1. It appears that all the agricultural products would experience rise in their prices in the world market. With respect to the export price, because of combined effects of agriculture and NAMA liberalization, the export price changes of the Manufacturing products are less prominent than those under the NAMA scenario (see Table 7.1). In contrast, the import price changes are relatively higher than those under the NAMA scenario. Now the price and volume results from the GTAP model are introduced in the Indian dynamic CGE model as shocks. Also the tariffs on the agricultural and manufacturing products in the Indian dynamic CGE model are reduced by 24 percent. The results of this simulation, conducted in the dynamic CGE model for India, are reported in the subsequent sections.

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2. Macroeconomic Impacts:

The macroeconomic effects for Doha simulation are reported in Table 8.2.The Doha scenario would lead to a rise in real GDP in the short run and the effect is stronger in the long run. In the short run, the aggregate welfare declines. However, in the long run the negative effect on welfare appears to be very minimal. Head-country poverty rises in the short run, and in the long run the effect is very minimal. There are positive effects on exports and imports and the long run effects are more prominent than the short run effects.

Both urban and rural CPIs fall and

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