producers of sugar are worse off. There are gains from trade—an increase in social surplus in each country.

That is, both the United States and Brazil are better off than they would be without trade. The following Clear It

Up feature explains how trade policy can influence low-income countries.

FIGURE 20.3 Free Trade of Sugar Free trade results in gains from trade. Total surplus increases in both countries,

as the two blue-shaded areas show. However, there are clear income distribution effects. Producers gain in the
exporting country, while consumers lose; and in the importing country, consumers gain and producers lose.

LINK IT UP

Visit this website (http://openstax.org/l/sugartrade) to read more about the global sugar trade.
476 20 • Globalization and Protectionism

CLEAR IT UP

Why are there low-income countries?
Why are the poor countries of the world poor? There are a number of reasons, but one of them will surprise you: the
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