Policy Reforms in World Sugar Markets: What Would Happen?

The international sugar market is not a “free” market because of extensive use of production quotas, import controls, government support prices, and preferential trade agreements of rich countries. In the United States, the European Union, and Japan, protectionist policies have resulted in domestic prices up to three times greater than the world sugar price. In recent years, the World Trade Organization (WTO), North American Free Trade Agreement (NAFTA), and regional agreements have mounted international pressure to liberalize sugar markets in the most offending countries but without much success. Nevertheless, the major protectionist countries are becoming aware that current sugar policies cannot last indefinitely