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Poverty Impacts of an Economic Partnership Agreement between Uganda and the EU

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  • Ole Boysen and Alan Matthews

Abstract

This paper analyzes the poverty impacts of an economic partnership agreement (EPA) between Uganda and the EU. As Ugandan exports are also eligible for duty-free access to the EU under the Everything But Arms scheme the main impact of the EPA will be to require liberalization of EU exporters’ access to the Ugandan market. There are fears this could threaten the incomes of poor people through lower prices for agricultural commodities, the crowding out of vulnerable industries, and loss of government revenue. We examine these fears by means of a qualitative analysis using data from a 1999 social accounting matrix of the Ugandan economy and the 2002/2003 household budget survey. We then quantify the effects on the economy and poverty employing a combined CGE-microsimulation model. The qualitative analysis shows that the scope for trade liberalization with the EU is very limited and that particularly the poor have only weak links to formal markets. The quantitative analysis suggests that the macroeconomic impacts of an EPA are minor but positive, implying that the economic adjustment costs might turn out to be low. Whether the very small poverty effects are positive or not depends on the selection of sensitive products in the EPA, although under all scenarios the very poorest appear to lose.

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  • Ole Boysen and Alan Matthews, 2008. "Poverty Impacts of an Economic Partnership Agreement between Uganda and the EU," The Institute for International Integration Studies Discussion Paper Series iiisdp261, IIIS.
  • Handle: RePEc:iis:dispap:iiisdp261
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    1. Ivanic, Maros, 2004. "Reconciliation of the GTAP and Household Survey Data," GTAP Research Memoranda 1408, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
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    Cited by:

    1. Chris Milner & Oliver Morrissey & Evious Zgovu, 2009. "EU-ACP Economic Partnership Agreements and ACP Integration," Discussion Papers 09/05, University of Nottingham, CREDIT.
    2. Ole Boysen & Alan Matthews, 2009. "The Economic Partnership Agreement between Uganda and the EU: Trade and Poverty Impacts," The Institute for International Integration Studies Discussion Paper Series iiisdp307, IIIS.
    3. Ole Boysen, 2009. "Border Price Shocks, Spatial Price Variation, and their Impacts on Poverty in Uganda," The Institute for International Integration Studies Discussion Paper Series iiisdp306, IIIS.

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