Would All ACP Sugar Protocol Exporters Lose from Sugar Liberalisation?

Abstract

The pressures for reform within the World Trade Organization (WTO) have led to recent proposals from the European Commission for the reform of the European Union's (EU's) sugar policy. The impact of this reform would be felt not only by EU sugar producers but also by the sugar protocol African, Caribbean and Pacific (ACP) countries who gain preferential market access at the protected EU price as a result of the Lome and Cotonou Agreements. This paper explores the way in which reform will affect the transfers of welfare to these ACP countries. It explores how the protocol countries are affected by the current regime and would be affected by reform in a very non-uniform manner. While some countries' transfer would fall with reform, others may gain due to the impact that sugar reform has on world prices. These differences are due to the very uneven allocation of the preferential quotas across protocol countries, and the highly differential dependence of the countries on EU and non-EU export markets. Les pres...