Implications of a Doha Agreement on Agricultural Markets in Sudan

The latest round of multilateral trade negotiations was launched at the ministerial meeting of the World Trade Organization in Doha, Qatar, in November 2001. Agriculture is a major item on the agenda for the Doha Round. The primary focus is on the three “pillars” of the Uruguay Round agreement—domestic support, market access, and export competition. The framework for a final agreement was finalized at a Ministerial meeting in Geneva in July 2004, but contains few details on modalities (e.g., the formula to be used for reductions in tariffs/increases in tariff-rate quotas, quantitative limitations on domestic support, and the schedule for the elimination of export subsidies). Detailed proposals on a number of these issues were put forward in October 2005 by the European Union and the United States, in addition to the G10 and G20 groups of countries. The Doha Round negotiations have since run into several major hurdles, and it is unclear at this time if, or when, an agreement might be reached. Nevertheless, the range of alternatives for key parameters is becoming increasingly clear. In this paper we analyze empirically the implications of the provisions of a Doha agreement for agricultural markets in Sudan. The analysis is based on the PEATSim model (Partial Equilibrium Agricultural Trade Simulator) developed by the Penn State University in collaboration with the Economic Research Service of the U.S. Department of Agriculture. This dynamic, multi-country, multi-commodity model covers 35 of the major traded agricultural commodities and contains a detailed representation of markets and policies in twelve countries/regions that are particularly significant for world agricultural trade. The model is used to analyze the US, EU, and G20 negotiating proposals from October 2005. The PEATSim model has previously been used to analyze a number of agricultural trade and policy reform scenarios, including global agricultural trade liberalization in all commodities, trade liberalization in global dairy markets, and trade liberalization in coarse grain markets. Sudan is not a currently member of the WTO although it has been in the accession process since 1994. Assuming that Sudan continues outside of WTO membership, its trade policies will not be directly affected by a Doha agreement. But Sudan could be affected significantly by changes in global agricultural markets. Preliminary results using PEATSim indicate an increase in Sudanese production and exports of course grains, peanuts, cotton, sunflowers, and beef due to increases in world prices. Imports of several products increase, especially wheat, rice, and poultry meat. On the whole the preliminary results suggest that Sudanese agriculture should benefit from a Doha agreement