Trade Policy and Global Poverty William R. Cline Global Free Trade Impact: Lift 500 million out of poverty in 15 years $200 billion annual long-term income gain for developing countries At least half from removing industrial country protection This is twice annual aid, and it benefits industrial country consumers Half of gains are in agriculture Poverty Intensity of Imports from Developing Countries (%) 70 60 50 40 headcount income 30 20 10 0 All LDCs HIPCs SSA Growth Elasticity of Poverty Lognormal distribution: elasticity function of inequality (G), ratio of average to poverty income (z) Lower where inequality higher Higher where z higher Asia typically 3 or more Typically lower in Latin America (1 to 2) because high G; and in Africa (1 to 2) because low z Average GDP&Export Growth Average Annual GDP Growth 15 10 5 0 -15 -10 -5 0 5 10 15 -5 -10 -15 Average Annual Export Growth 80s 90s 20 25 30 Special-regime export growth, 1981-2001 gx* = -6.9 + 1.93 gw (2.5) +0.41 gylag (1.6) +0.079 mfshr (1.97) +7.76 R*lag (2.36) -.0004 y*lag (1.0) +8.83 LOME (2.36) +7.23 CBI (2.39) +1.66 ATPA (0.29) -10.8 SSA (2.36) Adj R2 =.016; # obs. = 1412 Total Tariff Equivalent of Agricultural Protection Against Developing Countries (percent tariff equivalent) US Can. EU Japan 8.8 30.4 32.6 76.4 Tariff-Equivalent of domestic subsidies 10.2 16.8 10.4 3.2 Total TariffEquivalent 19.9 52.3 46.4 82.1 Tariffs Aggregate Measure of Protection (AMP, %) US EU JPN Agriculture 19.9 46.4 82.0 Textiles, Apparel 10.9 11.6 9.2 Other Manufactures 2.1 3.2 1.5 Oil, other 0.9 0.6 0.3 All (AMP) 4.0 9.5 16.6 DC agricultural protection and global poverty π=εw {ΦR[θRγR-] +ΦUθUγU} π= proportionate rise in poverty ε= poverty elasticity w= % increase in world price Φ=share of total poor in sector θ=share of food in budget γ= elast. food price wrt world price =elast. farm income wrt farm price =elast. farm price wrt world price LDC food trade and comparative advantage Country Bangladesh –food trade deficit & comp. disadv. Others: total Poor (mn) 99 # of countries 1 374 44 Food trade deficit 213 34 Food comparative disadvantage 110 21 Welfare Effects of Free Trade: CRTS Model ($ billions and percent of GDP) Agriculture Txtl & Ap. ANZ 8.42 0.07 CAN 3.98 1.31 USA 22.31 8.04 JPN 21.67 1.25 KOR 5.92 1.19 E_U 21.62 6.25 IDN 0.20 -0.02 MYS -0.71 0.05 PHL 1.39 -0.21 THA 0.64 -0.01 CHN 1.64 1.64 AG3 2.05 1.85 ARG 3.62 -0.03 BRA 5.83 0.23 MEX -1.42 -0.46 OLA 2.64 0.13 SSA 1.32 0.07 MNA 9.56 1.14 EIT 3.71 0.67 XAS 3.44 0.03 EFTA 6.83 1.01 IND 0.82 0.57 TUR 2.24 0.17 XCM 2.32 0.08 XSC 0.46 0.10 DGC 45.68 7.20 DEV 84.83 17.94 WLD 130.51 25.14 Memorandum: from P26 results: BGD n.a. n.a. XSA n.a. n.a. MOZ n.a. n.a. UGA n.a. n.a. TZA n.a. n.a. Other Total 0.04 -0.44 2.00 14.03 4.48 14.94 1.15 0.86 -0.16 2.01 0.97 3.32 1.15 3.95 -0.04 1.26 1.22 10.77 2.18 1.63 12.54 0.43 0.53 1.51 0.89 38.09 43.11 81.20 n.a. n.a. n.a. n.a. n.a. % GDP 9.17 4.39 39.20 31.70 9.44 38.96 1.43 -0.02 1.20 3.08 4.47 7.30 5.27 10.20 -2.06 4.12 2.66 17.05 6.20 5.45 17.86 2.22 3.08 4.09 1.37 86.51 141.29 227.80 2.41 0.90 0.57 0.85 2.41 0.61 0.74 -0.02 1.50 2.21 0.62 1.55 1.65 1.54 -0.60 1.23 1.41 3.00 0.82 1.33 5.73 0.63 1.72 4.03 1.28 1.35 0.78 0.93 0.39 0.98 0.12 0.09 0.29 0.90 1.51 3.24 1.33 4.11 We lfare Effe cts of Alte rnative Trade Libe ralization Sce narios ($ billions and percent of free trade potential) ANZ CAN USA JPN KOR E_U IDN MYS PHL THA CHN AG3 ARG BRA MEX OLA SSA MNA EIT XAS EFTA IND TUR XCM XSC DGC DEV WLD 2-tier liberalization $ bn %FT 2.72 29.67 1.93 43.89 21.44 54.68 20.97 66.16 6.37 67.50 39.60 101.65 1.25 87.24 0.89 a 0.19 16.14 2.82 91.59 4.42 98.77 4.64 63.62 2.89 54.91 6.04 59.20 -0.59 28.62 2.30 55.89 1.86 70.09 13.63 79.95 3.57 57.68 3.06 56.25 17.44 97.63 1.80 81.06 1.52 49.45 2.49 60.96 1.19 86.75 60.35 69.75 104.09 73.68 164.44 72.19 a. < -1,000 asymmetric free trade $bn %FT 7.20 78.46 2.43 55.45 17.51 44.67 18.70 58.97 1.47 15.57 7.66 19.66 1.70 118.69 -0.15 728.57 1.53 127.68 3.44 111.72 6.99 156.31 4.48 61.42 3.66 69.50 4.35 42.64 -2.63 127.84 3.73 90.70 3.00 112.96 3.27 19.20 8.03 129.63 4.78 87.73 15.52 86.90 1.31 59.09 2.20 71.65 4.41 107.90 0.98 71.52 56.55 65.37 69.02 48.85 125.57 55.12 differential liberalization $ bn %FT 2.56 27.89 2.78 63.24 13.63 34.76 10.18 32.12 12.11 128.35 24.80 63.64 2.02 140.86 2.15 a 0.51 42.56 3.64 118.05 9.48 212.03 9.35 128.08 4.95 93.98 10.94 107.17 -0.15 7.29 3.70 89.85 2.14 80.45 14.48 84.92 6.89 111.14 3.53 64.90 16.19 90.63 2.66 119.76 2.35 76.53 2.74 66.98 1.59 116.18 95.05 109.87 70.12 49.63 165.17 72.51 Decomposition of static welfare gains Benefit: DGC $bn % FT DEV $bn % FT Total $bn % FT Liberalize: DGC 41 48 59 42 100 44 DEV 57 65 69 49 126 55 sum 98 113 128 91 226 99 Global 87 100 141 100 228 100 Interaction -11 -13 13 9 2 1 MFN Tariffs (%) Agric TxAp OthMf OilRM DCs 35.6 11.6 3.1 0.1 EU 32.6 18.0 4.1 0.0 US 8.8 12.1 2.8 0.1 JPN 76.4 10.2 1.2 0.0 DGCs 30.3 18.2 11.5 0.7 China 29.9 27.9 15.3 0.5 India 31.5 31.6 24.6 1.1 Korea 50.7 7.9 6.9 0.4 Brazil 22.9 17.6 15.4 0.4 Colom 14.7 18.0 11.9 0.8 Tanz 22.8 17.3 20.3 2.2 S Afr 37.8 19.3 7.8 0.2 "Steady State" Welfare Gains from Free T rade Region $ billion %GDP ANZ 21.90 5.76 CAN 6.53 1.34 USA 80.23 1.17 JPN 44.25 1.18 KOR 16.44 4.20 E_U 89.34 1.41 IDN 7.06 3.64 MYS 3.21 3.73 PHL 3.91 4.91 THA 43.39 31.16 CHN 6.46 0.90 AG3 16.06 3.42 ARG 15.66 4.89 BRA 40.13 6.04 MEX 3.47 1.02 OLA 27.32 8.16 SSA 13.90 7.36 MNA 50.60 8.91 EIT 24.55 3.26 XAS 26.90 6.58 EFTA 20.98 6.73 IND 23.86 6.74 TUR 9.76 5.45 XCM 12.72 12.55 XSC 5.22 4.88 DGC 350.62 5.48 DEV 263.22 1.45 WLD 613.84 2.50 Memorandum: from P26 results: BGD 1.72 3.94 XSA 14.11 21.72 MOZ 0.38 9.84 UGA 0.32 4.90 TZA 0.91 12.89 a. At capital cost of 7 percent %dK dK %GDPNet change in welfare (a) $ billion %GDP 11.32 37.58 11.89 3.13 1.80 4.88 4.86 1.00 1.92 5.22 55.06 0.80 1.78 5.85 28.92 0.77 17.88 48.44 3.17 0.81 1.90 5.69 64.02 1.01 13.98 33.28 2.55 1.31 22.91 54.53 -0.07 -0.09 14.81 35.25 1.95 2.44 67.03 159.53 27.84 19.99 14.14 33.51 -10.45 -1.45 9.69 26.27 7.42 1.58 11.53 34.93 7.83 2.44 12.85 38.94 22.02 3.32 3.41 10.04 1.07 0.31 17.92 54.31 14.60 4.36 19.80 51.48 7.09 3.75 18.40 47.83 31.58 5.56 10.82 36.24 5.44 0.72 18.20 43.31 14.51 3.55 6.37 21.14 16.37 5.25 21.99 51.46 11.10 3.14 9.72 25.28 6.59 3.68 37.42 113.37 4.67 4.61 13.10 34.06 2.67 2.49 15.75 42.18 161.59 2.52 2.15 6.46 181.13 1.00 5.70 15.77 342.71 1.40 13.66 69.07 25.99 13.37 33.10 32.52 164.39 67.84 34.89 86.40 0.73 1.67 6.64 10.21 0.20 5.09 0.16 2.45 0.48 6.84 hrtrunsRF04 s5 Impact of Free Trade on Real Factor Prices and Welfare: CRTS Model (percent change) Region B25 ANZ CAN USA JPN KOR E_U IDN MYS PHL THA CHN AG3 ARG BRA MEX OLA SSA MNA EIT XAS EFTA IND TUR XCM XSC Memorandum: P26 BGD XSA MOZ UGA TZA Land Unskilled Labor Skilled Labor Capital & Weighted Resources Sum Welfare lambda 124.90 140.50 4.80 -70.90 -31.20 -51.30 8.60 -0.60 12.40 51.30 0.70 6.40 36.50 23.40 -2.30 32.50 18.90 -22.40 10.80 7.20 -65.30 3.40 14.30 26.50 56.00 4.50 2.10 1.00 3.50 9.40 1.20 2.40 8.60 5.20 10.60 8.30 3.70 2.50 1.60 1.00 4.30 6.00 9.60 4.40 5.00 12.90 2.80 4.30 9.70 4.30 1.90 1.80 1.00 4.00 9.60 1.70 1.40 8.30 3.40 5.80 8.50 3.10 1.20 1.70 1.10 2.60 4.00 11.40 4.00 4.60 12.90 2.50 3.30 8.10 4.10 1.80 2.30 1.00 3.70 9.60 1.40 2.00 8.50 3.20 5.20 8.20 3.30 1.50 2.30 1.10 2.60 3.90 12.20 4.00 4.40 12.00 2.50 3.50 9.20 5.00 3.62 2.80 1.02 3.50 8.54 0.96 2.63 8.07 4.46 7.44 7.89 3.41 2.94 2.27 0.97 3.89 5.12 10.91 4.25 4.83 11.97 2.71 3.85 9.91 4.81 3.3 1.2 0.7 1.3 4.0 0.8 1.1 1.0 2.0 3.6 1.1 2.3 2.1 2.0 -0.8 1.6 1.7 4.2 1.1 1.7 7.9 0.9 2.4 5.2 1.7 0.91 0.43 0.69 0.37 0.47 0.83 0.42 0.12 0.45 0.48 0.14 0.68 0.71 0.88 -0.83 0.41 0.33 0.38 0.26 0.35 0.66 0.33 0.62 0.52 0.35 4.7 7.2 8.3 3.3 32.4 6.4 9.7 6.5 2.8 8.8 5.5 10.0 6.2 2.3 2.1 5.4 9.0 6.0 2.3 3.4 5.8 9.1 6.3 2.6 7.3 1.1 1.9 3.9 1.6 4.9 0.19 0.21 0.62 0.61 0.67 Impact of Free Trade on Global Poverty: CRTS Static Model Poor (mn) Poverty Elasticity Estimated Constrained Asia Bangladesh BGD 99.3 China CHN 673.2 India IND 859.9 Indonesia IDN 136.8 Korea KOR 0.9 Malaysia MYS 5.6 Pakistan XSA 114.2 PhilippinesPHL 29.2 Thailand THA 17 HK, Taiw., AG3 Sgp. 0 Other OAS 84.8 subtotal 2020.9 Latin America Argentina ARG 5.4 Brazil BRA 29.2 Cen. Am.&XCM Carib. 26.6 Mexico MEX 41.1 Other OLA 45.9 subtotal 148.2 Europe Central & EIT E. Eur. 92.2 Middle East, MNA North Africa Turkey TUR 11.6 Other MNA 76.42 subtotal 88.02 Sub-Saharan Africa Mozambique MOZ 13.56 South Africa XSC 15.07 Tanzania TZA 19.65 Uganda UGA 16.58 Other SSA 328.36 subtotal 393.22 TOTAL 2742.54 Percent change in real Change in number poverty-level income of poor (mn) Base Alternative Base Alternative case case 1.2044 1.1398 -4.19 -3.96 1.1558 0.943 -27.23 -22.22 0.9216 0.9612 -27.74 -28.93 1.0172 1.538 -4.87 -7.36 0.2308 -2.6644 -0.01 0.08 1.0288 0.808 -0.18 -0.14 2.0233 1.9183 -8.09 -7.67 2.306 2.954 -2.00 -2.56 4.9392 8.8464 -2.94 -5.26 2.4944 2.8616 0.00 0.00 1.3368 1.108 -2.27 -1.88 -79.51 -79.90 5.76 5.13 4.98 6.55 inf 3.16 9.43 2.97 5.91 na na 3.5 3.5 3.5 3.5 3.5 3.16 3.5 2.97 3.5 2 2 3.13 1 na 1.95 na 3.13 1 2 1.95 2 1.8075 1.534475 5.0596 0.82 1.7467 6.6355 5.304 6.8068 0.16 4.0591 -0.31 -0.45 -2.69 -0.66 -1.60 -5.71 -1.12 -1.55 -3.62 -0.13 -3.73 -10.15 na 2 1.1396 1.4724 -2.10 -2.72 6.06 na 3.5 2 2.6394 3.7032 3.8794 1.2712 -1.07 -5.66 -6.73 -1.58 -1.94 -3.52 1.39 1.18 0.57 2.33 na 1.39 1.18 1 2.33 2 4.017 1.5245 5.7964 1.6972 1.952 4.2402 5.1435 8.9588 1.7582 2.8034 -0.76 -0.27 -1.14 -0.66 -12.82 -15.64 -109.69 -0.80 -0.91 -1.76 -0.68 -18.41 -22.56 -118.85 Impact of Free Trade on Real Factor Prices and Welfare: Steady State CRTS Model (percent change) Region B25 ANZ CAN USA JPN KOR E_U IDN MYS PHL THA CHN AG3 ARG BRA MEX OLA SSA MNA EIT XAS EFTA IND TUR XCM XSC Memorandum: P26 BGD XSA MOZ UGA TZA Land Unskilled Labor Skilled Labor Capital & Weighted Resources Sum Net Welfare lambda 142.7 156.6 10.2 -69.4 -27.5 -48.9 15.9 11.8 20.7 74.4 5 12.6 45.7 37.6 2.1 46.7 31.4 -11.9 18.4 18.4 -62.6 16 24.6 48.2 72.7 7.9 3.3 2.2 4.8 14.2 2.7 6.9 16.2 9.5 38.3 12.7 7 6.5 5.7 3.2 10.6 12.6 15.5 7.7 10.2 14.9 8.6 9.2 19.9 8.2 4.5 2.9 2.1 5.4 14 3 4.7 14 6.2 21.6 12 5.9 4.4 4.6 2.9 6.4 7.2 15.2 6.5 7.7 14.9 5 7.1 13.1 7 -0.1 2.4 1.4 4.2 5.6 1.9 -2 2.8 -0.4 -1.8 3.2 1.6 -1 -0.1 1 -0.9 -2.4 6.9 1.2 -0.6 10.4 -4.2 2 -0.6 1.5 4.52 3.61 1.92 4.51 9.44 1.98 2.93 7.86 4.90 6.60 8.45 4.38 3.93 3.17 1.70 4.53 5.49 10.84 4.91 5.38 12.68 3.03 4.87 9.46 5.68 4.28 1.33 0.98 1.19 1.35 1.31 1.96 3.69 3.24 32.54 -2.57 2.34 3.12 4.32 0.42 5.67 4.53 7.78 0.97 4.53 7.24 4.50 5.13 5.94 3.31 0.95 0.37 0.51 0.26 0.14 0.66 0.67 0.47 0.66 4.93 -0.30 0.53 0.79 1.36 0.25 1.25 0.83 0.72 0.20 0.84 0.57 1.48 1.05 0.63 0.58 14.5 42.5 23.8 9.1 55.5 10.3 26.4 14.3 6.8 21 7.4 14.4 10.1 4.2 -9.6 0.7 -11.3 -2.9 -2.3 4.1 6.11 9.43 6.64 3.23 13.61 2.05 12.86 6.38 2.84 8.13 0.33 1.36 0.96 0.88 0.60 Impact of Free Trade on Global Poverty: Steady State Model Percent change in real Change in number poverty-level income of poor (mn) Base Alternative Base Alternative Asia Bangladesh China India Indonesia Korea Malaysia Pakistan Philippines Thailand HK, Taiw., Sgp. Other subtotal Latin America Argentina Brazil Cen. Am.& Carib. Mexico Other subtotal Europe Central & E. Eur. Middle East, North Africa Turkey Other subtotal Sub-Saharan Africa Mozambique South Africa Tanzania Uganda Other subtotal TOTAL BGD CHN IND IDN KOR MYS XSA PHL THA AG3 OAS 3.3 0.0 8.2 4.4 1.9 7.2 25.0 6.0 37.7 3.6 8.2 3.5 0.0 9.7 5.6 0.8 6.8 28.3 7.4 44.9 4.2 9.5 -11.3 0.0 -246.5 -20.9 -0.1 -1.3 -100.1 -5.2 -22.4 0.0 -13.8 -421.6 -12.3 0.0 -291.0 -26.6 0.0 -1.2 -113.0 -6.5 -26.7 0.0 -16.2 -493.6 ARG BRA XCM MEX OLA 4.9 5.4 11.9 0.8 10.1 11.1 11.9 15.4 0.7 17.3 -0.8 -1.6 -6.3 -0.6 -9.3 -18.6 -1.9 -3.5 -8.2 -0.6 -15.9 -30.1 EIT MNA TUR MNA 1.5 1.9 -2.7 -3.5 8.8 10.8 11.9 6.9 -3.6 -16.5 -20.1 -4.8 -10.5 -15.3 MOZ XSC TZA UGA SSA 13.0 4.6 12.2 5.7 9.9 14.8 12.1 16.3 6.1 13.0 -2.4 -0.8 -2.4 -2.2 -64.8 -72.6 -535.7 -2.8 -2.2 -3.2 -2.3 -85.3 -95.8 -638.2 Elasticity of output w.r.t. trade/GDP Levine-Revelt ‘92 0.14 Frankel-Rose ‘00 0.33 Alcala-Ciccone ‘01 1.44 Dollar-Kraay ‘01 0.25-0.48 Easterly ‘03 0.14-0.96 Chaudri-Hakura ’00 (mid-tech industry) 0.18 World Bank GEP ‘02 0.8 OECD ‘03 0.2 Pove rty Impact of Dynamic Productivity Gains from Fre e Trade (millions and percent change) Number of poor (mn) As ia Bangladesh China India Indonesia Korea Malaysia Pakistan Philippines Thailand HK, Taiw., Sgp. Other subtotal Latin Ame rica Argentina Brazil Cen. Am.& Carib. Mexico Other subtotal Europe Central & E. Eur. Middle Eas t, North Africa Turkey Other subtotal Sub-Saharan Africa Mozambique South Africa Tanzania Uganda Other subtotal Total Poverty elasticity Increase in Gain in Long-term Change in Trade, % Productivity (%) poverty (mn) 99.3 673.2 859.9 136.8 0.9 5.6 114.2 29.2 17 0 84.8 2020.9 3.5 3.5 3.5 3.5 3.5 3.16 3.5 2.97 3.5 2 2 -- 25.6 5 6.2 4.6 3.1 5.9 14.3 8.4 3 2.1 4.2 -- 10.24 2 2.48 1.84 1.24 2.36 5.72 3.36 1.2 0.84 1.68 -35.6 -47.1 -74.6 -8.8 0.0 -0.4 -22.9 -2.9 -0.7 0.0 -2.8 -196.0 5.4 29.2 26.6 41.1 45.9 148.2 3.13 1 2 1.95 2 -- 2.2 -0.3 5.4 0.7 -0.4 -- 0.88 -0.12 2.16 0.28 -0.16 -0.1 0.0 -1.1 -0.2 0.1 -1.3 92.2 2 1 0.4 -0.7 11.6 76.42 88.02 3.5 2 -- 3.7 3.5 -- 1.48 1.4 -- -0.6 -2.1 -2.7 13.56 15.07 19.65 16.58 328.36 393.22 2742.54 1.39 1.18 1 2.33 2 --- 4.1 -0.8 0.5 0.5 0.3 --- 1.64 -0.32 0.2 0.2 0.12 --- -0.3 0.1 0.0 -0.1 -0.8 -1.2 -201.9 Combined Long-term Static and Dynamic Effects of Free Trade on Poverty (millions, change from baseline) Country Asia Bangladesh China India Indonesia Korea Malaysia Pakistan Philippines Thailand HK, Taiw., Sgp. Other subtotal Latin America Argentina Brazil Cen. Am.& Carib. Mexico Other subtotal Europe Central & E. Eur. Middle E., N. Africa Turkey Other subtotal Sub-Saharan Africa Mozambique South Africa Tanzania Uganda Other subtotal Static: central high (a) Dynamic: Productivity effect 1/2 additional net Steady State effect (b) Total: central high -4.1 -24.7 -28.3 -6.1 0.0 -0.2 -7.9 -2.3 -4.1 0.0 -2.1 -79.7 -13.3 -87.2 -74.8 -15.1 0.1 -0.2 -13.0 -2.0 -4.0 0.0 -8.8 -218.3 -35.6 -47.1 -74.6 -8.8 0.0 -0.4 -22.9 -2.9 -0.7 0.0 -2.8 -196.0 -3.6 0.0 -109.1 -7.4 0.0 -0.6 -46.1 -1.4 -9.2 0.0 -5.9 -183.3 -43.3 -71.8 -212.1 -22.3 -0.1 -1.1 -76.9 -6.6 -14.0 0.0 -10.8 -459.0 -52.6 -134.3 -258.5 -31.3 0.0 -1.1 -82.0 -6.4 -13.9 0.0 -17.5 -597.6 -0.7 -1.0 -3.2 -0.4 -2.7 -7.9 0.1 -0.4 -2.9 0.4 -2.2 -5.0 -0.1 0.0 -1.1 -0.2 0.1 -1.3 -0.1 -0.3 -1.6 -0.1 -3.3 -5.3 -0.9 -1.3 -5.9 -0.7 -5.8 -14.6 -0.1 -0.7 -5.6 0.1 -5.4 -11.7 -2.4 -1.0 -0.7 -0.2 -3.3 -1.9 -1.3 -3.8 -5.1 0.0 -4.4 -4.4 -0.6 -2.1 -2.7 -1.1 -6.4 -7.5 -3.0 -12.3 -15.4 -1.8 -12.9 -14.7 -0.8 -0.6 -1.4 -0.7 -15.6 -19.1 -114.3 -0.4 -1.1 -3.1 -2.5 -24.8 -31.9 -260.7 -0.3 0.1 0.0 -0.1 -0.8 -1.2 -201.9 -0.8 -0.1 -0.5 -0.8 -24.6 -26.8 -224.2 -1.9 -0.6 -2.0 -1.5 -41.0 -47.0 -539.3 -1.5 -1.2 -3.6 -3.4 -50.1 -59.8 -685.7 Total a. Adjusts for chapter 3 agricultural sector estimates; see text. pehrtreslts2R3/14 b. One-half increment of steady state (induced capital investment) effects above static. Long-term Impact of Free Trade on Global Poverty Reduction (millions) 250 200 150 100 50 0 Static Productivity Investment Reduction in Poverty from Global Free Trade (millions) 250 200 150 100 50 0 India China Pak Bangl Indons LatAm MENA SSAfr Blueprint for a Doha Deal DCs: Phased deep tariff cuts or elimination, including in agriculture, textiles and apparel; DCs: Eliminate agricultural subsidies or fully “decouple” from production; Middle-income DGCs: cut protection at least 50-60 percent; longer phase-in. Second track: immediate free entry from LDCs, HIPCs, SSA; 10-year tax holiday on FDI Test for Preference Erosion ($bn gains) “Country” Free trade US, EU freeze P7 0.09 0.07 0.28 0.24 Mozambique Uganda South Africa Tanzania 0.13 0.09 1.33 0.29 Other sub-Saharan Africa 2.36 -0.02 Central America Bangladesh Total, 7 poor (P7) 4.02 0.39 8.61 1.78 -0.20 2.24