Economist: Tariff bar will halt poverty

The elimination of tariffs and other trade barriers could lift more than 500 million people out of poverty over the next 15 years, says an economist.

    Agricultural liberalisation could eventually end poverty

    William Cline, a senior fellow at two US thinktanks, the Institute of International Finance and the Centre for Global Development, made the argument in his book, Trade Policy and Global Poverty.

    Much of the gains, the economist says, would come from agricultural liberalisation - allowing poorer nations to have greater access to sell their goods in wealthier countries.

    Such a move would provide long-term economic benefits of some $200 billion a year to developing countries.

    About $100 billion of the gains would come from removal of trade barriers from the industrialised countries - or about twice as much as foreign aid from rich to poor countries, he noted.

    Significance of agriculture

    Agriculture remains a key point of contention in the World Trade Organisation's Doha Round of global trade talks, which have been stalled, with developing countries accusing the richer nations of protectionism.

    Cline contends that elimination of agricultural tariffs and subsidies would boost global food prices, because it would limit overproduction.

    Poor farmers would gain from this, but urban poor would be hurt by higher food prices. However he argues that three-fourths of the world's three billion poor people are located in rural areas.

    In order to move the Doha Round forward, Cline offers a two-part policy recommendation: phased multilateral liberalisation, with the complete removal of protection in industrial countries and a deep reduction in protection by at least middle-income developing countries; and an extra benefits for "at risk" countries - the poorest, through immediate free market access combined with tax breaks for direct foreign investment.

    SOURCE: Agencies


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