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Sugar policies opportunity for change

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  • Mitchell, Donald

Abstract

Sugar is one of the most policy distorted of all commodities, and the European Union, Japan, and the United States are among the worst offenders. But internal changes in the E.U. and U.S. sugar and sweetener markets and international trade commitments make change unavoidable and provide the best opportunity for policy reform in several decades. The nature of reforms can have very different consequences for developing countries. If existing polices in the E.U. and the U.S. are adjusted to accommodate higher imports under international commitments, many low-cost producers, such as Brazil, will lose because they do not currently have large quotas and are not included among the preferential countries. The benefits of sugar policy reform are greatest under multilateral reform, and according to recent studies, the global welfare gains of removal of all trade protection are estimated to total as much as $4.7 billion a year. In countries with the highest protection (Indonesia, Japan, Eastern Europe, Western Europe, and the U.S.), net imports would increase by an estimated 15 million tons a year, which would create employment for nearly one million workers in developing countries. World sugar prices would increase by as much as 40 percent, while sugar prices in countries that heavily protect their markets would decline. Developing countries that have preferential access to the E.U. or U.S. sugar markets are likely to lose some of these preferences as sugar policies change. However, the value of preferential access is less than it appears because many of these producers have high production costs and would not produce at world market prices.

Suggested Citation

  • Mitchell, Donald, 2004. "Sugar policies opportunity for change," Policy Research Working Paper Series 3222, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3222
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    References listed on IDEAS

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    1. Nancy Novack, 2002. "The rise of ethanol in rural America," Main Street Economist, Federal Reserve Bank of Kansas City, issue Mar.
    2. Diop, Ndiame & Beghin, John & Sewadeh, Mirvat, 2004. "Groundnut policies, global trade dynamics, and the impact of trade liberalization," Policy Research Working Paper Series 3226, The World Bank.
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    Cited by:

    1. David Abler & John C. Beghin & David Blandford & Amani Elobeid, 2006. "U.S. Sugar Policy Options and Their Consequences under NAFTA and Doha," Food and Agricultural Policy Research Institute (FAPRI) Publications 06-wp424, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
    2. Hoekman, Bernard & Michalopoulos, Constantine & Winters, L. alan, 2003. "More favorable and differential treatment of developing countries : toward a new approach in the World Trade Organization," Policy Research Working Paper Series 3107, The World Bank.
    3. Nolte, Stephan, 2008. "The Future Of The World Sugar Market--A Spatial Price Equilibrium Analysis," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6663, European Association of Agricultural Economists.
    4. Amani Elobeid & John Beghin, 2006. "Multilateral Trade and Agricultural Policy Reforms in Sugar Markets," Journal of Agricultural Economics, Wiley Blackwell, vol. 57(1), pages 23-48, March.
    5. Ekaterina Krivonos & Marcelo Olarreaga, 2009. "Sugar Prices, Labor Income, and Poverty in Brazil," ECONOMIA JOURNAL, THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION - LACEA, vol. 0(Spring 20), pages 95-128, January.
    6. Dominique van der Mensbrugghe & John C. Beghin & Don Mitchell, 2003. "Modeling Tariff Rate Quotas in a Global Context: The Case of Sugar Markets in OECD Countries," Center for Agricultural and Rural Development (CARD) Publications 03-wp343, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    7. van der Mensbrugghe, Dominique & Beghin, John C. & Mitchell, Don, 2003. "Implementing Tariff Rate Quotas In Cge Models: An Application To Sugar Trade Policies In Oecd Countries," 2003 Annual meeting, July 27-30, Montreal, Canada 22098, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Gotor, Elisabetta, 2009. "The Reform of the EU Sugar Trade Preferences toward Developing Countries in Light of the Economic Partnership Agreements," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 10(2).
    9. Yeboah, Osei-Agyeman & Parker, S. Janine, 2009. "Impact of Expanded United States Sugar Imports from CAFTA Countries on the Ethanol Market," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46027, Southern Agricultural Economics Association.
    10. Mónica KJÖLLERSTRÖM, 2006. "The Special Status Of Agriculture In Latin American Free Trade Agreements," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 23, pages 73-106.
    11. Zhuang, Renan & Koo, Won W., 2006. "Impacts of Sugar Free Trade Agreements on the U.S. Sugar Industry," 2006 Annual meeting, July 23-26, Long Beach, CA 21486, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Scott McDonald & Cecilia Punt, 2004. "Trade Liberalisation, Efficiency and South Africa's Sugar Industry," Working Papers 2004012, The University of Sheffield, Department of Economics, revised Aug 2004.
    13. Gauder, Martin & Graeff-Hönninger, S. & Claupein, W., 2011. "The impact of a growing bioethanol industry on food production in Brazil," Applied Energy, Elsevier, vol. 88(3), pages 672-679, March.
    14. Gohin, Alexandre & Bureau, Jean-Christophe, 2005. "Sugar Market Liberalization: Modeling the EU Supply of "C" Sugar," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24740, European Association of Agricultural Economists.
    15. Argent,Jonathan Thompson & Begazo Gomez,Tania Priscilla, 2015. "Competition in Kenyan markets and its impact on income and poverty : a case study on sugar and maize," Policy Research Working Paper Series 7179, The World Bank.
    16. van Berkum, Siemen & Roza, Pim & van Tongeren, Frank W., 2005. "Impacts of the EU sugar policy reforms on developing countries," Report Series 29139, Agricultural Economics Research Institute.
    17. Andino, Jose & Taylor, Richard D. & Koo, Won W., 2006. "The Mexican Sweeteners Market and Sugar Exports to the United States," 2006 Annual meeting, July 23-26, Long Beach, CA 21213, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Marzoughi, Hassan & Kennedy, P. Lynn, 2006. "The Impact of Central American Free Trade Area (CAFTA) on the United States sugar market," 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida 35439, Southern Agricultural Economics Association.
    19. Gotor, Elisabetta & Tsigas, Marinos E., 2011. "The impact of the EU sugar trade reform on poor households in developing countries: A general equilibrium analysis," Journal of Policy Modeling, Elsevier, vol. 33(4), pages 568-582, July.

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