End of the Nation-State Postponed: Agricultural Policy and the Global Sugar Industry

The sugar industry illustrates how nation-states still have a important impact on the global economic map. Protectionist policies of nations prevent comparative advantage from being attained. This paper examines current geographic patterns of production and trade and the export and import dependency levels of the leading sugar trading nations. The sugar policies of the U.S. and EU are reviewed because of their pervasive impact on patterns of production and trade. Following a brief consideration of the politics of U.S. sugar, the paper explores how patterns of production and trade would shift if protectionist policies were removed. High production cost areas (U.S., EU, and Japan) would experience declines in their shares of global output while low cost production areas (Australia, Thailand, Brazil, and Cuba) would experience increases. The net result would be significant gains in global welfare. Key words: sugar industry, policies, trade, comparative advantage, global welfare.