An Evaluation of the Draft Final Act of the Uraguay Round

Abstract

This paper presents an evaluation of the proposed Draft Final Act (DFA) of the Uruguay Round of Multilateral Trade Negotiations, using the computable general equilibrium model used in Nguyen, Perroni and Wigle (i 9Ib). Section II gives a very brief overview of the DFA and the following sections explain how we represent the agreement in our model. Section V then describes the estimated impacts of the DFA, with some discussion of the various components of the deal in Section VI. Finally, we give some concluding remarks. Our earlier analysis looked at a more ambitious conclusion of the Uruguay Round where agricultural liberalisation and textiles liberalisation were more complete. In that study, we found that the 'Comprehensive' Uruguay Round agreement generated wide-spread gains to industrial countries, as well as middle and low-income countries. We also found that the gains were largest for the two parties for whom the Round seems most contentious (the US and EC). Our analysis of a Uruguay Round agreement based on the DFA suggests a similar conclusion, although changes since our earlier paper (market opening in the economies in transition in particular) have meant that the gains to Eastern Europe are likely to be significantly greater than before. The gains to the US are still significant, although much smaller than from the 'Comprehensive' agreement studied earlier, and world-wide gains are in the same order of magnitude at over $200 billion. Some discussion of our results follows in Section V.