The EC sugar market policy and developing countries

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Abstract
The purpose of this study is to investigate the impact of the sugar market policy of the European Community (EC) on developing countries. This problem is of special relevance, since on the one hand the EC's sugar market is its most protected agricultural market and, on the other hand, a special trade preference in the form of the EC sugar protocol is given to some developing countries. The study starts with a quantification of the effect of the EC sugar policy on world market prices for sugar and the implied transfer effects for selected developing countries. The analysis of the sugar protocol allows one to apply a method to calculate the maximum transfer effects due to this agreement. It is shown that the producttied transfers are completely arbitrary and do not respond to any official objective of EC development policy. Nevertheless, the agreement may allow the EC to buy a maximum of goodwill on the side of developing countries with a given cost.

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