Imad Eldin E. A. Karim Yousif, King Saud University, Saudi Arabia
Azharia Elbushra, University of Juba, Sudan
Azhari Ibrahim, University of Khartoum, Sudan
Abstract: The objective of this paper is to investigate the impact of the Economic Partnership Agreement (EPA) with the European Unions (EU) on the agricultural trade of Sudan. More specifically it attempts to estimate the effects of the EPA on domestic production, demand and trade of agricultural commodities in Sudan. A multimarket model with Armington specification is applied to achieve the paper objectives. The model is based on the average data of years 2007 and 2008 for the main agricultural exports of Sudan to the EU, namely gum Arabic, sesame, cotton and groundnuts. The model results reveal that, removal of tariff between Sudan and the EU resulted in an increase of the export of cotton, sesame, groundnuts and gum Arabic by 65%, 63%, 33% and 62%, respectively, and decreasing their exports to rest of the world. This is attributed to the increase of the EU demand for these products in response to the reduction of their domestic price after application of zero tariff. The net result for Sudan is the increase in aggregate output of the agricultural production and improvement in foreign exchange earnings with slight negative impact on domestic demand. To benefit from the opportunity provided by the EPA, Sudan should improve the quality and standards of its agricultural exports in order to meet the EU market regulations.
Keywords: EU; Sudan’s agricultural trade; armington specification