What can the developing countries infer from the Uruguay Round models for future negotiations

Abstract

This paper discusses the results from general equilibrium trade models executed towards theend of the Uruguay Round, reporting both aggregate and regional gains. These results weregenerated some five years ago, and were important to the debates at the end of the UruguayRound as to what would be the foregone gains were the Round not to conclude. The paper arguesthat there are substantial, and at times hard to explain inconsistencies across model results. Onemodel shows most of the gains come from agricultural liberalization, another from textiles, andyet another from tariff cuts. One model shows developing countries account for around 10 percent of the total gain, another shows them to gain over 50 per cent. One model shows developingcountries losing from elimination of the MFA, another shows them as large gainers. One modelshows that imperfectly competitive and scale economy effects double global gains, another showsalmost no impact. These differences occur even where similar data sets, and benchmark years areused, and are hard to explain on the basis of parametric specifications for models seemingly used,though these are frequently poorly exposited. The paper also discusses the verification of modelsrelative to behaviour since the Round concluded, expressing skepticism as to its feasibility forreasons set out in the paper. It also attempts to discuss what, if any, are the implications for thedeveloping countries, and the possible ways forward in making these models more useable todeveloping countries for the next round of trade negotiations.

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