The Impact on Russia of WTO Accession and The Doha Agenda : The Importance of Liberalization of Barriers against Foreign Direct Investment in Services for Growth and Poverty Reduction

Taking price changes from the Global Trade Analysis Project (GTAP) model of world trade, the authors use a small open economy computable general equilibrium comparative static model of the Russian economy to assess the impact of global free trade and a successful completion of the Doha Agenda on the...

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Bibliographic Details
Main Authors:	Rutherford, Thomas, Tarr, David, Shepotylo, Oleksandr
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ACCESSION AGREEMENT ACCESSION COMMITMENTS ACCESSION NEGOTIATIONS ACCESSION TO THE WORLD TRADE ORGANIZATION AGGREGATE CONSUMPTION AGRICULTURAL PRODUCTS AGRICULTURAL SUPPORT AGRICULTURE ANTIDUMPING ANTIDUMPING ACTIONS AVERAGE COSTS BASE YEAR BENCHMARK BILATERAL AGREEMENT BILATERAL AGREEMENTS BUSINESS SERVICES CAPITAL INCREASE CAPITAL STOCK COMMODITIES CONSTANT MARGINAL COSTS CONSTANT RETURNS TO SCALE CONSUMERS CONSUMPTION EXPENDITURES CONSUMPTION GOODS CONTRACT ENFORCEMENT COUNTRY OF ORIGIN CURRENT ACCOUNT CURRENT ACCOUNT SURPLUS DEMAND CURVE DEVELOPMENT AGENDA DEVELOPMENT ECONOMICS DIVIDENDS DOHA DEVELOPMENT AGENDA DOMESTIC FIRMS DOMESTIC SUPPORT ECONOMIC GEOGRAPHY ECONOMIC GROWTH ECONOMIC IMPLICATIONS ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMIC THEORY ECONOMICS LITERATURE ELASTICITY ELIMINATION OF TARIFFS EQUILIBRIUM EXPENDITURES EXPORT MARKETS EXPORT PRICE EXPORT SUBSIDIES EXPORT SUBSIDY EXPORT TAX EXPORTS EXTERNALITIES EXTERNALITY FACTOR ENDOWMENTS FACTOR SHARES FOOD INDUSTRY FOREIGN BANKS FOREIGN DIRECT INVESTMENT FOREIGN FIRMS FOREIGN GOODS FOREIGN INVESTORS FREE TRADE FREE TRADE IN GOODS GDP GENERAL EQUILIBRIUM MODEL GENERAL EQUILIBRIUM MODELING GLOBAL FREE TRADE GLOBAL TRADE GLOBAL TRADE ANALYSIS GROWTH RATE IMPACT OF TRADE IMPACT OF TRADE LIBERALIZATION IMPORT BARRIERS IMPORT PRICES IMPROVED MARKET ACCESS INCOME INCOME DISTRIBUTION INCREASED COMPETITION INCREASING RETURNS INCREASING RETURNS TO SCALE INDIVIDUAL HOUSEHOLDS INDUSTRIAL COUNTRIES INTELLECTUAL PROPERTY INTERMEDIATE GOODS INTERNATIONAL DEVELOPMENT INTERNATIONAL TRADE INVESTMENT CLIMATE JOINT VENTURES LIBERALIZATION OF TRADE MANUFACTURING SECTORS MARGINAL COST MARKET ACCESS MONOPOLISTIC COMPETITION MONOPOLY RENTS MULTINATIONAL FIRMS OPENNESS OPTIMIZATION PER CAPITA INCOME POLICY CHANGES POLICY IMPLICATIONS POOR COUNTRIES POVERTY REDUCTION PRICE INDEX PRIMARY FACTORS PRIMARY FACTORS OF PRODUCTION PROCESS OF ADJUSTMENT PRODUCT DIFFERENTIATION PRODUCTIVITY PRODUCTIVITY GROWTH PROFITABILITY REDUCTION OF BARRIERS REGULATORY BARRIERS RETURN ON CAPITAL RURAL HOUSEHOLDS SAFETY NETS SERVICE SECTOR SERVICE SECTORS SERVICES LIBERALIZATION SERVICES SECTOR SERVICES SECTORS TARIFF BARRIERS TARIFF CUTS TARIFF RATES TARIFF REDUCTION TARIFF REDUCTIONS TAX RATES TELECOMMUNICATIONS TERMS OF TRADE TERMS OF TRADE EFFECTS TERMS OF TRADE LOSS TOTAL FACTOR PRODUCTIVITY TRADE IN SERVICES TRADE LIBERALIZATION TRADE POLICY TRADE REFORMS TRANSITION PERIOD TRANSPORTATION SERVICES UNEMPLOYMENT UNSKILLED LABOR URBAN HOUSEHOLDS URBAN WORKERS URUGUAY ROUND UTILITY FUNCTION UTILITY FUNCTIONS WAGE RATE WAGES WELFARE GAINS WELFARE IMPACTS WORLD MARKETS WORLD PRICES WORLD TRADE WORLD TRADE ORGANIZATION WTO WTO ACCESSION WTO MEMBERS WTO MEMBERSHIP
Online Access:	http://documents.worldbank.org/curated/en/2005/10/6304708/impact-russia-wto-accession-doha-agenda-importance-liberalization-barriers-against-foreign-direct-investment-services-growth-poverty-reduction http://hdl.handle.net/10986/8256

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Summary:	Taking price changes from the Global Trade Analysis Project (GTAP) model of world trade, the authors use a small open economy computable general equilibrium comparative static model of the Russian economy to assess the impact of global free trade and a successful completion of the Doha Agenda on the Russian economy, and especially on the poor. They compare those results with the impact of Russian accession to the World Trade Organization (WTO) on income distribution and the poor. The model incorporates all 55,000 households from the Russian Household Budget Survey as "real" households. Crucially, given the importance of foreign direct investment (FDI) liberalization as part of Russian WTO accession, the authors also include FDI and Dixit-Stiglitz endogenous productivity effects from liberalization of import barriers against goods and FDI in services. The authors estimate that Russian WTO accession in the medium run will result in gains averaged over all Russian households equal to 7.3 percent of Russian consumption (with a standard deviation of 2.2 percent of consumption), with virtually all households gaining. They find that global free trade would result in a weighted average gain to households in Russia of 0.2 percent of consumption, with a standard deviation of 0.2 percent of consumption, while a successful completion of the Doha Development Agenda would result in a weighted average gain to households of -0.3 percent of consumption (with a standard deviation of 0.2 percent of consumption). Russia, as a net food importer, loses from subsidy elimination, and the gains to Russia from tariff cuts in other countries are too small to offset these losses. The results strongly support the view that Russia's own liberalization is more important than improvements in market access as a result of reforms in tariffs or subsidies in the rest of the world. Foremost among the own reforms is liberalization of barriers against FDI in business services.

The Impact on Russia of WTO Accession and The Doha Agenda : The Importance of Liberalization of Barriers against Foreign Direct Investment in Services for Growth and Poverty Reduction

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