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EU-RSA Free trade agreement -- Partial liberalization of the Dairy and sugar sectors in the EU

EU-RSA Free trade agreement -- Partial liberalization of the Dairy and sugar sectors in the EU. Motivation: Exploration of importance of sensitive sectors Experiment: 50% reduction unliberalized sensitive sectors: milk and sugar. Implementation:

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EU-RSA Free trade agreement -- Partial liberalization of the Dairy and sugar sectors in the EU

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  1. EU-RSA Free trade agreement -- Partial liberalization of the Dairy and sugar sectors in the EU • Motivation: Exploration of importance of sensitive sectors • Experiment: 50% reduction unliberalized sensitive sectors: milk and sugar. • Implementation: • modification to Base scenario by a change in cmfstart file to set definition

  2. Background Information • EU Tariff rates reduction • Milk: 87.7%  43.8% • Sugar: 76.4%  38.2% • Importance of trading partners in both sectors (milk, sugar)

  3. Results • Welfare gains in EU and RSA:

  4. Results • Sources of Welfare gain in EU and RSA:

  5. Results • Increase in South African exports to the EU (qxs)

  6. Results • Change in EU and RSA’s Sugar and Milk Production (qo)

  7. Conclusion • Milk and sugar sectors in the EU would face a small loss for the benefit of all • Partial liberalization of milk and sugar in the EU-RSA FTA is a Win-Win situation • Political economics can explain the protection of these sectors to the detriment of the welfare as a whole.

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