The Doha Development Round Should Egypt Eliminate tariffs

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 1

Background The Doha Development Agenda (DDA) launched in 2001 aimed at increasing the benefits of trade liberalization for Developing and Least Developed Countries (LDCs). 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. 2

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

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

Methodology Use the NATHAN report simulation as the baseline Include the special and differential treatment scenario: Ø define New subsets for LDC, AG and NAG : • Example : xset AG 2_COMM (LVS, Oth. Ag, pfbev, Vegftnt, Veg. Oil. Fat); xsubset AG 2_COMM is subset of AG_COMM; xset AG 3_COMM = AG_COMM-AG 2_COMM; Ø include all possible alternative direction of trade follows • Example : Shock tms(AG_COMM, REG_NLDC, REG_XEGY) = select from file scnpot. har header "S 4"; Shock tms(AG_COMM, REG_NLDC, REG_EGY) = select from file scnpot. har header "S 4"; Shock tms(AG_COMM, REG_LDC, REG_XEGY) = select from file scnpot. har header "S 4"; Shock tms(AG 3_COMM, REG_LDC, REG_EGY) = select from file scnpot. har header "S 4";

Selected Results I ØDrop in welfare in Egypt ØGain in welfare in LDCs: the loss become less negative 6

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

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

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

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. 10