Modelling of the impact of the EBA initiative
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CTA. 2004. Modelling of the impact of the EBA initiative. Agritrade, January 2004. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/52876
In June 2003 a WIDER discussion paper on ‘The EU's Everything But Arms...
In June 2003 a WIDER discussion paper on ‘The EU's Everything But Arms Initiative and the Least Developed Countries' was released. This paper used a computable general equilibrium simulation model and partial equilibrium simulations, based on the SMART model to ‘assess the aggregate worldwide distribution of gains and losses of the EBA initiative' for least developed countries and other developing countries under a range of scenarios. The study shows ‘moderate welfare gains from the EBA initiative' with the largest gains being recorded for sub-Saharan Africa . These largely arise from access to the high-priced EU sugar market. The paper notes that the effects on the EU itself are minimal, since the increased access for LDC sugar is at the expense of ‘other preference-receiving countries'. The paper acknowledges that given the modelling techniques used ‘the analysis does not fully account for non-tariff barriers that may preclude LDCs from increasing their exports to the extent predicted by our analysis'. It notes also that ‘in the longer term supply-side constraints rather than market-access limitations may be the more important factors' and recommends that urgent attention be paid to these factors by the international community. Comment: The benefits which LDCs have gained form the EBA initiative in the sugar sector would largely disappear with the implementation of a ‘fall in price' option for sugar-sector reform. Commission estimates suggest that total imports from ACP developing countries under such an option are likely to be little more than 200,000 tonnes once sugar-sector reform has been fully implemented. While these imports are all likely to come from least developed ACP countries this is far below the 2 million tonnes of imports from LDCS predicted by the International Sugar Organisation at the time of the launching of the EBA initiative.