Sugar Policies: Opportunity for Change
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 commitme...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2004/02/3889369/sugar-policies-opportunity-change http://hdl.handle.net/10986/14307 |
| Summary: | 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. |
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