From Marrakesh to Doha: Effects of Removing Food

If successful, the Doha Round may cut global subsidies to food production. Thevast majority of developing countries should benefit, but some will lose througha deterioration of their terms of trade. How great is their loss likely to be? What will happen to poor consumers in those countries? What is the appropriate policy response? In examining these questions, we find that: • The collective magnitude of the likely losses of net food importers is between $300 million and $1.2 billion per year depending on the final agreement, an amount that could readily be financed by donors. This is less than 0.7 percent of total merchandise imports of these countries and even those losses will phase-in over a long period. The food price increases will be about half as large as the annual year-to-year variations in food prices. • Only 7 countries would see their net food import bills increase by more than 5 percent of total export earnings. This number is relatively small, because the projected increases in food prices are small and because many developing countries would also benefit from increases in the prices of their exports. • The international community has several instruments to help countries face