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Changing the U.S. Sugar Program into a Standard Crop Program: Consequences under the North American Free Trade Agreement and Doha
Authors:David Abler  John C Beghin  David Blandford  Amani Elobeid
Institution:David Abler and David Blandford are Professors in the Department of Agricultural Economics and Rural Sociology at Pennsylvania State University.;
John C. Beghin is Marlin Cole Professor of International Agricultural Economics in the Department of Economics at Iowa State University and Visiting Professor in the Faculty of Economics and Business at the University of Sydney, Australia.;
Amani Elobeid is an associate scientist at the Center for Agricultural and Rural Development at Iowa State University.
Abstract:We analyze the impact of continuing the existing U.S. sugar program, replacing it with a standard program, and implementing the standard program with multilateral trade liberalization. Under the North American Free Trade Agreement (NAFTA), duty-free sugar imports from Mexico could undermine the program's ability to operate on a "no-cost" basis to taxpayers as large public stocks of sugar could accumulate. The replacement of the current sugar program by one similar to other major U.S. crop programs would solve the problem of potential stock accumulation, accommodate further trade liberalization under a new WTO and future bilateral trade agreements, but would induce significant fiscal outlays through direct payments.
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