Multilateral Trade and Agricultural Policy Reforms in Sugar Markets (Revised)

Amani Elobeid and John Beghin ()

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

Abstract: We analyze the impact of trade liberalization, removal of production subsidies, and elimination of consumption distortions in world sugar markets using a partial-equilibrium international sugar model calibrated on 2002 market data and current policies. The removal of trade distortions alone induces a 27% price increase while the removal of all trade and production distortions induces a 48% increase by 2011/12 relative to the baseline. Aggregate trade expands moderately, but location of production and trade patterns change substantially. Protectionist OECD countries (the EU, Japan, the US) experience an import expansion or export reduction and significant contraction in production in unfettered markets. Competitive producers in both OECD countries (Australia) and non-OECD countries (Brazil, Cuba), and even some protected producers (Indonesia, Turkey), expand production when all distortions are removed. Consumption distortions have marginal impacts on world markets and location of production. We discuss the significance of these results in the context of mounting pressures to increase market access in highly protected OECD countries and the impact on non-OECD countries.

Keywords: agricultural policy; Doha; domestic subsidies; sugar; trade liberalization; WTO. (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-cwa and nep-int
Date: 2005-09-26
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Published in Journal of Agricultural Economics, April 2006, Vol. 57, No. 1, pp. 23-48.

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Persistent link: http://EconPapers.repec.org/RePEc:isu:genres:12419

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