Ministry of Finance and Development Planning Republic of Liberia
AERC Research Paper 350 African Economic Research Consortium, Nairobi August 2018, 35 pages
This paper analyzes the potential impact of agricultural trade liberalization on sub-Saharan Africa.
- It used the Agricultural Trade and Policy Simulation Model to estimate the potential effects of agricultural trade liberalization, mainly in the United States (US) and the European Union (EU), on the world market prices of agricultural commodities.
- It then used the estimated price changes to assess the impact of these reforms on net-food importers as well as other sub-Saharan African countries that enjoy preferential trade agreements with the EU and the US.
The results indicate that the world market prices of all commodities imported by Sub-Saharan Africa are expected to rise while the prices of the key export commodities of the region would either decline or remain unchanged.
- Given that the prices of major food commodities are expected to rise, net food-importing countries will experience an increasing import bill, thus leading to welfare loss.
- Major Sub-Saharan Africa sugar exporters who are beneficiaries of preferential agreements such as the EU Sugar Protocol and the US’s Africa Growth and Opportunity Act initiative will become losers as preferences are eroded due to global liberalization.
- Thus, the region is expected to generally become a net loser from the current WTO reform modalities.
- Dr Innocent Matshe is the Director of Training Programmes at the African Economic Research Consortium (AERC).
- He joined in 2010 AERC from the Human Sciences Research Council (HSRC) where he had been a Senior Research Specialist. Currently, he heads three large collaborative training programmes in economics and two capacity building research efforts covering more than 30 Sub-Saharan African countries and 4 Latin American countries.
- A former head of the Department of Economics at the University of Zimbabwe for 6 years and a Faculty member for 17 years, Dr Matshe has extensive research experience in Microeconomics, Rural finance, Agricultural Development and Health Economics.
Source: PAEPARD FEED