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The Doha Development Round : Should Egypt Eliminate tariffs For LDC’s Products?

Guyslain K. Ngeleza 1 Youssouf KONE 2 1 Purdue University, West Lafayette, USA 2 University of Bouake, Cote d’Ivoire. The Doha Development Round : Should Egypt Eliminate tariffs For LDC’s Products?.

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The Doha Development Round : Should Egypt Eliminate tariffs For LDC’s Products?

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  1. Guyslain K. Ngeleza1 Youssouf KONE2 1 Purdue University, West Lafayette, USA 2 University of Bouake, Cote d’Ivoire The Doha Development Round : Should Egypt Eliminate tariffs For LDC’s Products?

  2. The Doha Development Agenda (DDA) launched in 2001 aimed at increasing the benefits of trade liberalization for Developing and Least Developed Countries (LDCs). Background DDA recommended that developing countries make special efforts to help LDC to increase their gain from the liberalization process The special and differential treatment principle was proposed: Developing countries were demanded to give LDCs more favourably tariffs for their exports. NATHAN report (2006) : examined DDA at length but failed to include the special and differential treatment scenario.

  3. Key questions • Should Egypt Eliminate Tariffs for product imported from LDCs ? • What would be the impacts of such tariffs’ elimination for Egypt? • On welfare • On employment • On Production • What would be the main drivers of these change?

  4. Selected Indicators • existing tariffs on • LDCs Products: • Highest: Minerals • Apparel and leather • products Imports • as a share of • total import from • LDCs: • Highest:Other • Agriculture • employment • LDCs (only • Unskilled) • Highest for both • Egypt and LDCs: • trade and financial • services but initial • zero tariff

  5. Methodology • Use the NATHAN report simulation as the baseline • Include the the special and differential treatment scenario: • define New subsets for LDC, AG and NAG : • Example : xset AG2_COMM (LVS, OthAg, pfbev, Vegftnt, VegOilFat); xsubset AG2_COMM is subset of AG_COMM; xset AG3_COMM = AG_COMM-AG2_COMM; • include all possible alternative direction of trade follows • Example : Shock tms(AG_COMM, REG_NLDC, REG_XEGY) = select from file scnpot.har header "S4"; Shock tms(AG_COMM, REG_NLDC, REG_EGY) = select from file scnpot.har header "S4"; Shock tms(AG_COMM, REG_LDC, REG_XEGY) = select from file scnpot.har header "S4"; Shock tms(AG3_COMM, REG_LDC, REG_EGY) = select from file scnpot.har header "S4";

  6. Drop in welfare in Egypt Selected Results I • Gain in welfare in LDCs: the loss become less negative

  7. Selected Results III • In both Egypt and LDCs, three driving forces stand out: • allocative efficiency • endowment • term of trade

  8. Selected Results II • positive world prices effects through energy and negative prices effects through live stock in Egypt • World prices have positive effect for most product in LDCs. • Could be further analyse in Analyse GE by examining the change in the prices. • Noticeable allocation efficiency gain Efficiency in apparel and leather product in Egypt • large loss in live stock and textile in LDCs

  9. Selected Results IV • Apparel and Leather and Other manufacture decrease the most • Apparel and Leather and other anufacture decrease the most due mainly to: • share domestic sale in Egypte • share of export sale in LDCs

  10. Conclusion • This extension account for the special and differential treatment principle in the DDA • We found that welfare for Egypt decreases while it increases for LDCs • The main driving forces were: allovative efficiency, endowments and term of trade. • Should Egypt eliminate tariffs ? The Question remain open.

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