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The Impact of Central American Free Trade Area (CAFTA) on the United States sugar market

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  • Marzoughi, Hassan
  • Kennedy, P. Lynn

Abstract

This paper tries to estimate the impact of establishment of CAFTA on the United States sugar market. We use the United States sugar demand elasticity and the amount of increase in the U.S. sugar import quota under CAFTA agreement to estimate the magnitude of this effect. This study shows that these increased imports will result in a decrease in the U.S. domestic sugar price of about 1.7 cents, or approximately 8.6 percent. Although it amounts to only pennies per pound, this decrease in the domestic price could result in the incursion of significant U.S. government expenditures given the current structure of the U.S. non-recourse loan program.

Suggested Citation

  • Marzoughi, Hassan & Kennedy, P. Lynn, 2006. "The Impact of Central American Free Trade Area (CAFTA) on the United States sugar market," 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida 35439, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saeaso:35439
    DOI: 10.22004/ag.econ.35439
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    File URL: https://ageconsearch.umn.edu/record/35439/files/sp06ma08.pdf
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    References listed on IDEAS

    as
    1. Petrolia, Daniel R. & Kennedy, P. Lynn, 2003. "Increasing the United States Tariff-Rate Sugar Quota for Cuba and Mexico: A Partial-Equilibrium Simulation," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 35(3), pages 589-597, December.
    2. Mitchell, Donald, 2004. "Sugar policies opportunity for change," Policy Research Working Paper Series 3222, The World Bank.
    3. repec:ags:joaaec:v:35:y:2003:i:3:p:589-597 is not listed on IDEAS
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    Cited by:

    1. Yeboah, Osei-Agyeman & Parker, S. Janine, 2009. "Impact of Expanded United States Sugar Imports from CAFTA Countries on the Ethanol Market," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46027, Southern Agricultural Economics Association.

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