Multilateral Trade Liberalization and Mexican Households : The Effect of the Doha Development Agenda

Multilateral Trade Liberalization and Mexican Households : The Effect of the Doha Development Agenda

Empirical evidence suggests that global trade reforms are unlikely to produce analogous results across countries, especially when analyzing their effect on poverty. This implies that the analysis of trade reform on social welfare cannot be generalized and needs to be conducted on a country by country basis. Moreover, even within the same country, geographic areas, households, and individuals are likely to be differentially affected, some of them benefiting more than others, while others might lose. With this in mind, the author provides a quantitative estimate of the effect on Mexican households from the implementation of the Doha development agenda. His analysis uses a two-step approach for which changes in prices and factors are estimated through a CGE model (GTAP) and then mapped into the welfare function of the household using household survey data. The empirical approach the author uses aims to measure the impact of Doha implementation by tracing changes in the household prices of goods and factors and their impact on household welfare, taking particular account the role of domestic price transmission. The findings suggest that multilateral trade liberalization alone would have a negative effect on Mexican households, even though very small. However, when the implementation of the Doha development agenda is complemented by domestic policies aimed at increasing productivity and improving domestic price transmission, the overall effects become positive. The results point to the importance of domestic price transmission in determining the variance of the effects across households.

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Bibliographic Details
Main Author: Nicita, Alessandro
Format: Policy Research Working Paper biblioteca
Language:English
Published: World Bank, Washington, DC 2005-09
Subjects:AGRICULTURAL PRODUCTION, AGRICULTURAL PRODUCTS, AGRICULTURAL SECTOR, AGRICULTURE, APPAREL, AVERAGE PRICES, BORDER PRICE, COMPETITIVE MARKETS, CONCEPTUAL FRAMEWORK, CONSTANT RETURNS TO SCALE, CONSUMERS, CPI, CURRENCY, DATA SET, DATA SETS, DEPENDENT VARIABLE, DEVALUATION, DEVELOPING COUNTRIES, DEVELOPMENT POLICY, ECONOMIC CRISIS, ECONOMIC GROWTH, ELASTICITIES, ELASTICITY, EMPIRICAL EVIDENCE, EQUILIBRIUM, EXCHANGE RATE, EXCHANGE RATES, EXPENDITURES, EXPORT QUANTITIES, EXPORT SUBSIDIES, EXPORT SUPPLY, EXPORTS, EXTREME POVERTY, FOOD POVERTY LINE, FULL LIBERALIZATION, FULL TRADE LIBERALIZATION, GAIN, GENERAL EQUILIBRIUM MODEL, GLOBAL TRADE, GLOBAL TRADE ANALYSIS, HOUSEHOLD CHARACTERISTICS, HOUSEHOLD CONSUMPTION, HOUSEHOLD DATA, HOUSEHOLD HEAD, HOUSEHOLD INCOME, HOUSEHOLD LEVEL, HOUSEHOLD SIZE, HOUSEHOLD SURVEY, HOUSEHOLD SURVEYS, HOUSEHOLD WELFARE, IMPACT OF TRADE, IMPACT OF TRADE POLICIES, IMPACT OF TRADE REFORMS, IMPORT PRICES, IMPORTS, INCOME, INCOME GROUPS, INCOME HOUSEHOLDS, INCOME LEVEL, INCOMPLETE MARKETS, INCREASING RETURNS, INTERNATIONAL MARKETS, INTERNATIONAL PRICES, INTERNATIONAL TRADE, INTERNATIONAL TRADE POLICIES, LABOR MARKET, LABOR MARKETS, LOCAL LEVEL, MARKET PRICES, MARKETING, MARKETING INFRASTRUCTURE, MULTILATERAL TRADE, MULTILATERAL TRADE LIBERALIZATION, NATIONAL LEVEL, NATURAL RESOURCES, POLICY RESEARCH, POOR, POOR HOUSEHOLDS, POOR LIVING, POSITIVE EFFECTS, POVERTY ALLEVIATION, POVERTY LEVELS, POVERTY LINE, POVERTY LINES, POVERTY REDUCTION, PREFERENTIAL ACCESS, PRICE CHANGES, PRICE EFFECT, PRICE MECHANISM, PRODUCERS, PRODUCT DIFFERENTIATION, PRODUCTIVITY, REAL INCOME, REAL TERMS, RETAIL, RETAIL PRICES, RURAL AREAS, RURAL HOUSEHOLDS, RURAL POOR, SALES, SPREAD, SUBSTITUTE PRODUCTS, SUBSTITUTES, SURPLUS, SURPLUS LABOR, TARIFF DATA, TARIFF REDUCTIONS, TAXATION, TIME SERIES, TRADE COSTS, TRADE DATA, TRADE LIBERALIZATION, TRADE NEGOTIATIONS, TRADE OPPORTUNITIES, TRADE POLICIES, TRADE REFORM, TRADE REFORMS, TRADE SHOCKS, TRANSFER PAYMENTS, TRANSPORT COSTS, UNSKILLED LABOR, URBAN AREAS, URBAN HOUSEHOLDS, URBAN POOR, WAGE INCOME, WAGES, WELFARE FUNCTION, WELFARE GAINS, WORLD PRICES, WTO,
Online Access:http://documents.worldbank.org/curated/en/2005/09/6265698/multilateral-trade-liberalization-mexican-households-effect-doha-development-agenda
http://hdl.handle.net/10986/8292
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Summary:Empirical evidence suggests that global trade reforms are unlikely to produce analogous results across countries, especially when analyzing their effect on poverty. This implies that the analysis of trade reform on social welfare cannot be generalized and needs to be conducted on a country by country basis. Moreover, even within the same country, geographic areas, households, and individuals are likely to be differentially affected, some of them benefiting more than others, while others might lose. With this in mind, the author provides a quantitative estimate of the effect on Mexican households from the implementation of the Doha development agenda. His analysis uses a two-step approach for which changes in prices and factors are estimated through a CGE model (GTAP) and then mapped into the welfare function of the household using household survey data. The empirical approach the author uses aims to measure the impact of Doha implementation by tracing changes in the household prices of goods and factors and their impact on household welfare, taking particular account the role of domestic price transmission. The findings suggest that multilateral trade liberalization alone would have a negative effect on Mexican households, even though very small. However, when the implementation of the Doha development agenda is complemented by domestic policies aimed at increasing productivity and improving domestic price transmission, the overall effects become positive. The results point to the importance of domestic price transmission in determining the variance of the effects across households.

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