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

Ole Boysen and Alan Matthews

The Institute for International Integration Studies Discussion Paper Series from IIIS

Abstract: 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.

Keywords: economic partnership agreements; Uganda; poverty; CGE; microsimulation (search for similar items in EconPapers)
JEL-codes: D31 D58 F13 F14 I32 O55 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2009-11
New Economics Papers: this item is included in nep-afr, nep-cmp and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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