WTO: Is Trade Pessimism Justified?
In the early years of 2000, simulations of the welfare gains from a complete liberalization of merchandise trade suggested that the world economy would be as much as US$ 800 billion richer with an ambitious and successful Doha Round. It was thought that developing countries would appropriate around two-thirds of these gains. More recently, however, simulations have yielded much smaller values. Moreover, the gains for developing countries now appear to be vanishingly small.
Recognizing the need for stocktaking, the GSI commissioned this paper to investigate why model results have changed. It was submitted as an input to a joint WTO-GSI technical workshop on modeling liberalization.