Why unwinding preferences is not the same as liberalisation: the case of sugar

Why unwinding preferences is not the same as
liberalisation: the case of sugar

Christopher Stevens

Abstract

Many of the changes to developed country trade policy that affect developing countries do
not fit neatly into the category of ‘liberalisation’ yet they are frequently assessed as if they
did. The recent changes to the EU’s regimes for production and imports of sugar fall into this
group: both production and trade policies were highly distorted before the change and will
remain so after it, but the distribution of the effects of these distortions will be altered. This
will affect three of the six Development Cooperation Ireland programme countries in Africa:
Mozambique, Tanzania and Zambia. Returns from sugar exports to the EU will be less than
otherwise would have been. How much lower depends critically on how the sugar market
develops after 2009.

JEL: Q18, Q12

Key words:

Sugar, liberalisation, value chains

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