Impacts of Application of Zero Tariffs by the EU under the EPA on the Sudan Production, and Trade of Agricultural Export Crops.
Abstract
The purpose of this study was to evaluate the potential implications of the Economic Partnership Agreement (EPA) between the European Union (EU) and the African, Caribbean, and Pacific Countries (ACP) on the agricultural production and trade between Sudan and the EU countries. The study depended on secondary data obtained from relevant institutions in the country. Data obtained cover the production and trade of the Sudan in the major agricultural export crops with EU and the rest of the world during 2004 - 2014. Agricultural production and trade relations in the major export crops, cotton, sesame, gum Arabic, and groundnuts were analyzed to show the situation before signing the EPA. Armington model was then used to estimate the potential implications on the production, domestic consumption and trade of these crops after signing the EPA. The average production, domestic consumption and exports of the selected crops during 2004- 2014 is assumed to represent the base year for the implementation of the EPA. The paper results showed that application of the EPA has positive impacts on Sudan’s agricultural output, exports and foreign exchange earnings. Also, the implementation of the EPA will redirect agricultural exports of the Sudan towards the EU markets, rather than the rest of the world. Sudan needs to look at any expected negative impacts of the EPA on the domestic markets.
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