Preferences Erosion and Trade Costs in the Sugar Market: The Impact of the Everything but Arms Initiative and the Reform of the EU Policy
AbstractThe changes recently introduced in the EU Common Market Organization for sugar will interact with preferential imports from developing countries and least developed countries that enjoy preferential treatment for exports to the EU, as well as by trade and adjustment costs. This paper focuses on the impact of the EU Commissions sugar policy reform and the Everything But Arms initiative on the African, Caribbean and Pacific countries and the Least Developed Countries. Simulations are run with an empirical model structure comprising a partial equilibrium model for the world sugar market and a gravity model to replicate least developed countries bilateral trade with Europe. Particularly, the gravity approach is employed to model the abolition of import tariffs for sugar originating in least developed countries, subject to trade costs, while the partial equilibrium approach is employed to assess the effects of EU Commissions sugar policy reform and the Everything But Arms initiative on world markets. Results suggest that the African, Caribbean and Pacific countries will experience significant reduction in their export revenue, whilst the initial impact on least developed countries may be limited but increasing in the medium run.
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Bibliographic InfoPaper provided by International Association of Agricultural Economists in its series 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia with number 25641.
Date of creation: 2006
Date of revision:
EBA; sugar; gravity; trade; C53; International Relations/Trade; Q18; C23;
Find related papers by JEL classification:
- C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
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