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The Economic Partnership Agreement between Uganda and the EU: Trade and Poverty Impacts

  • Ole Boysen

    ()

    (Institute for International Integration Studies, Trinity College Dublin
    Department of Economics, Trinity College Dublin)

  • Alan Matthews

    ()

    (Institute for International Integration Studies, Trinity College Dublin
    Department of Economics, Trinity College Dublin)

This paper analyses 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 EPA-induced change will be the requirement to liberalise EU exporters' access to the Ugandan market. Fears have been raised that this could threaten the livelihoods of poor people through lower prices for agricultural commodities, crowding out of vulnerable industries, and loss of government revenue. In an attempt to address these concerns, we assess the impact potential of an EPA using descriptive statistics of Ugandan trade, social accounting matrix, and household budget survey data. Subsequently, we quantify the impacts on the economy and poverty, in particular, by conducting a simulation study based on a combined CGE-microsimulation model. The descriptive analysis suggests very limited scope for trade liberalisation with the EU and that the poor, in particular, have only weak links to formal markets. The results from the simulation of alternative EPA scenarios show minor but positive macroeconomic impacts indicating potentially low economic adjustment costs. Whether the very small poverty effects emerge positive or not depends on the selection of sensitive products in the EPA. Nevertheless, the very poorest appear to lose under all scenarios.

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Paper provided by IIIS in its series The Institute for International Integration Studies Discussion Paper Series with number iiisdp307.

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Length: 34 pages
Date of creation: Nov 2009
Date of revision:
Handle: RePEc:iis:dispap:iiisdp307
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  1. Fontagne, Lionel & Laborde, David & Mitaritonna, Cristina, 2008. "An Impact Study of the Economic Partnership Agreements (EPAs) in the Six ACP Regions," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44194, European Association of Agricultural Economists.
  2. Lionel Fontagné & David Laborde & Cristina Mitaritonna, 2008. "An Impact Study of the EU-ACP Economic Partnership Agreements (EPAs) in the Six ACP Regions," Working Papers 2008-04, CEPII research center.
  3. L. Alan Winters, 2000. "Trade Liberalisation and Poverty," PRUS Working Papers 07, Poverty Research Unit at Sussex, University of Sussex.
  4. Geoffrey J. Bannister, 2001. "International Trade and Poverty Alleviation," IMF Working Papers 01/54, International Monetary Fund.
  5. Ole BOYSEN & Alan MATTHEWS, . "Poverty Impacts of an Economic Partnership Agreement between Uganda and the EU," EcoMod2008 23800016, EcoMod.
  6. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
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