The purpose of this paper is to quantify the potential impact of the latest World Trade Organization (WTO) agricultural draft modalities circulated on December 2008 on the economy of Bangladesh.
The study conducted simulation exercise using partial equilibrium model – Agricultural Trade Policy Simulation Model – to estimate the likely impact of the Doha round negotiation on Bangladesh agriculture.
One of the major findings of the study is that the world prices of agricultural commodities are likely to increase by 5 per cent if proposed modalities are implemented. The estimated results reveal that Bangladesh is likely to lose a considerable amount of economic welfare. This is due to a larger amount of loss (consumer surplus and government revenue) compared with a smaller amount of (producer surplus) gain. However, the study estimates that aggregate production of agricultural commodities, and production and export of most of the agricultural commodities will increase. On the other hand, import of agricultural commodities will decrease.
The study puts forward a number of suggestions with regard to Bangladesh's negotiating strategy for advancing its interests in the ongoing WTO negotiations on agriculture.
This study is the first ever attempt that has identified a number of negotiation strategies for Bangladesh using partial equilibrium modelling technique with respect to the latest WTO agricultural draft modalities.
