World Trade Organization

Paper Summary:

This paper briefly discusses two major economic concepts, the Ricardian trade model and free trade model. The paper further discusses what implications and effects the Doha Round will have on the participants of international commerce. The paper concludes with a summary of the arguments.

Outline:
Executive Summary
Analysis
Free trade & The Doha Development Round
Advantages for the LDCs
Disadvantages for the LDCs
Liberalization and LDCs
Reduction of Export Subsidies and Ricardian Theory
Conclusion

From the Paper:

"In conditions of free trade, the least-developed countries and the developing ones, countries that import most of their food would be highly disadvantaged. Trade liberalization of agricultural products could lead to a growth in food prices, affecting the poorer countries. A solution to this problem could be offered by special aid programs regarding food, assistance to improve the productivity and subsidies for imports. "
"The impact of the liberalization of agriculture runs 3 different ways: prices for farm products grow, the producer's surpluses are lowered and the consumers gain. Even if this seems like a win-win situation, things are different for LDCs and developing countries. Several studies have shown that the indicator of welfare depends directly on producer's surpluses, and not on consumer's gain. This conclusion throws a dark light upon the LDCs as they have yet to develop their agrarian sector and cannot deprive themselves of the surpluses. But if they don't, they do not participate fairly to world trade. It is a bad circle. "

Sample of Sources Used:

• Steven M. Suranovic, International Trade Theory & Policy
• Richard G. Lipsey, K. Alec Christal, An Introduction To Positive Economics
• www.wto.org
• www.wikipedia.org

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