Multilateral Trade and Agricultural Policy Reforms in Sugar Markets

Amani Elobeid and John Beghin ()

Staff General Research Papers from Iowa State University, Department of Economics

Abstract: We analyze the removal of current market interventions in world sugar markets using a partial-equilibrium international sugar model calibrated on 2002 market data and current policies. We analyze the impact of trade liberalization and the removal of production subsidies and consumption distortions. The removal of trade distortions alone induces a 27 percent price increase by the end of the decade relative to the baseline level for sugar. The removal of all trade and production distortions induces a 48 percent price increase by the end of the outlook period. Aggregate trade expands moderately, but location of production and trade patterns are substantially affected. Protectionist countries of the Organization for Economic Cooperation and Development (OECD) (the European Union, Japan, and, to a lesser extent, Mexico and the United States) experience an import expansion or export reduction and significant contraction in production in unfettered markets. World beet production decreases by 21 percent by the end of the decade, whereas world cane production increases by 8 percent. Brazil, Australia, Cuba, Indonesia, and Turkey expand production when all distortions are removed. Aggregate world sugar production and use decrease by 2 percent. We discuss the significance of these results in the context of the mounting pressures to reform U.S. and E.U. sugar policies and increase market access in OECD countries. Keywords: agricultural policy, Doha, domestic subsidies, sugar, trade liberalization, WTO.

New Economics Papers: this item is included in nep-cwa
Date: 2004-03-10
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Related works:
Working Paper: Multilateral Trade and Agricultural Policy Reforms in Sugar Markets (2005)
Working Paper: Multilateral Trade and Agricultural Policy Reforms in Sugar Markets (2004)
Working Paper: Multilateral Trade and Agricultural Policy Reforms in Sugar Markets (2005)
Journal Article: Multilateral Trade and Agricultural Policy Reforms in Sugar Markets (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:isu:genres:11539

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