Welfare Analysis in International Sugar Trade: The Case of the EU-ACP Sugar Protocol

Since its formation the European Union (EU) has employed a rather complicated policy to ensure high prices to domestic sugar growers and trade preferences to certain sugar exporting countries. One result of this policy is that the EU has been both the second largest importer and second largest exporter in the world market. Under pressure from the World Trade Organization (WTO), the EU agreed to reform its policies toward sugar in 2001, with the full effect of the reforms being fully implemented in 2006. In this paper, the impact of the EU sugar reform on global production, consumption, imports, and exports is examined. With a particular emphasis on the African Caribbean and Pacific (ACP) nations