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Abstract

The paper examines the outcomes of the World Trade Organization (WTO) 10th Ministerial Conference (MC10) in Nairobi, what is termed the Nairobi package (WTO, 2015). Specifically, we investigate the implications of the package for the cotton sector development in the economy of the EAC as well as in the economies of member countries, with special focus on Uganda, Kenya and Tanzania. The paper employs a desk review and a quantitative approach to simulate the effects of removal of subsidies on cotton production, prices and export earnings in the EAC. The results indicate that the removal of subsidies would reduce cotton production among the top producing countries, reducing their export earnings while increasing both production and export earnings in the EAC. We conclude that EAC countries need to monitor the implementation of the decision on the elimination of export subsidies and increase cotton production to take advantage of these opportunities.

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