Policy brief: How can the WTO continue to deliver good results on food security? | SDG Knowledge Center
By Facundo Calvo, Agricultural Policy Analyst, IISD
A few years ago, trade negotiators roaming the halls of the World Trade Organization (WTO) would not have expected a war in Europe, a global pandemic and a global food crisis to dominate discussions at a WTO Ministerial Conference. In fact, the Food and Agriculture Organization of the United Nations (FAO) reported that world hunger increased in 2020 under the shadow of the COVID-19 pandemic. Zooming in on the Black Sea, the closure of Ukrainian ports amid the Russian invasion does not bode well for net food importing countries around the world.
In June 2022, trade ministers from over 100 WTO members met in Geneva to discuss international trade rules, including those relating to trade in food and agricultural products. The Twelfth WTO Ministerial Conference (MC12) produced an important first outcome on food security: a ministerial decision on the exemption from export bans or restrictions for food purchases from the World Food Program (WFP) – exemption from the PAM.
Given its humanitarian nature and WFP’s invaluable contribution in providing a lifeline to the most vulnerable populations, the WFP exemption had enough merit to garner consensus at MC12. Export restrictions would have affected the efficiency of WFP’s food supply, meaning longer lead times, higher transport costs and, in the case of export bans, loss of meals and higher purchase prices.
The WFP exemption is a symbolically important outcome that shows the political will of WTO members to tackle the current food crisis. The WFP exemption could buy time and ensure that essential relief reaches the most vulnerable, as underline by the World Food Programme. Importantly, by agreeing to the WFP exemption, WTO members have demonstrated that the WTO is a forum where non-trade concerns such as food security can advance.
The WFP exemption strikes a delicate balance between the exemption as such (paragraph 1) and the possibility for WTO members to adopt measures to ensure their own food security (paragraph 2). Ideally, the MAP exemption would be interpreted in good faith, and WTO members would ensure that the wording of paragraph 2 did not water down (in practice) the wording of paragraph 1, so that the Ministerial Decision would facilitate the WFP’s work. to feed millions of vulnerable people. Whether this happens in practice remains to be seen.
The “Geneva Package” of MC12 outcomes also includes a Ministerial Declaration on the Emergency Response to Food Insecurity (WTO Declaration on Food Security). This is a welcome development. The WTO Declaration on Food Security emphasizes the need for smooth agricultural trade and reaffirms the importance of not imposing export restrictions or bans in a manner inconsistent with the relevant provisions of the WTO. WTO (paragraph 4). It includes in particular a commitment to have a specific work program within the Committee on Agriculture (CoA) of the WTO to operationalize the Marrakesh Decision on measures concerning the possible negative effects of the reform program on the least developed countries. developed and net food-importing developing countries (paragraph 8).
However, the WTO Declaration on Food Security contains no binding rules on the use of export restrictions and bans. While it is commendable that WTO members “resolve to ensure that any emergency measures introduced to address food security concerns minimize trade distortions as much as possible”, such that they are temporary, targeted and transparent (paragraph 5), this is a better solution. -effort clause in the context of a broader effort statement.
As the International Food Policy Research Institute (IFPRI) points out, export restrictions are mainly used by developing countries, with dramatic consequences for other developing countries. Since export restrictions tend to target commodities and staple foods such as wheat, rice, soybeans and palm oil, Least Developed Countries (LDCs) that depend of these products to meet their basic dietary needs suffer the most. If WTO members want to continue to achieve good results on food security at the next WTO Ministerial Conference (MC13), clarification of existing disciplines on export restrictions and bans could be a way forward. This would involve dusting off both Article XI of the General Agreement on Tariffs and Trade (GATT 1994) and Article 12 of the Agreement on Agriculture.
The absence of clearer disciplines for export restrictions and bans seems to do little to prepare WTO members for food crises. As in a version of Nietzsche’s trade policy Ewige Wiederkunft (Eternal Recurrence), many food crises are characterized by an increased reliance on export restrictions and bans that exacerbate food price spikes.
Negotiating disciplines on export restrictions and prohibitions at the WTO promises to be anything but simple and straightforward. To rekindle these conversations, WTO members could start by reviewing some of the existing proposals on the negotiating table. In April 2022, the LDC group submitted a proposal calling on a subset of WTO members to refrain from imposing export restrictions or bans when food staples are “procured by PMA for their domestic use” (paragraph 10). A similar proposal was circulated a few days before MC12 to “exempt purchases from LDCs and NFIDCs [net food importing developing countries]» export restrictions or prohibitions imposed by WTO members that are major exporters (paragraph 1.c). Although further discussion on export restrictions and prohibition disciplines is needed, agreeing on some preliminary exemptions or exclusions for food purchases made by LDCs and NFIDCs (or any other member group particularly affected by current food prices) could be a good starting point.
Furthermore, for WTO members to continue to ensure food security, it should be recognized that food security and agriculture programs are closely linked. While it made sense before MC12 to conceptually differentiate these two agendas through two separate draft ministerial decisions, one for food security, the other for agriculture (particularly because no substantive outcome was expected on the agricultural agenda), sorting out the agricultural agenda can also help move the food security agenda forward. In other words, progress on the seven negotiating topics of the agricultural agenda would also be necessary to achieve food security and SDG 2 (zero hunger).
For example, among these seven negotiation topics, public stockholding programs for food security purposes (PSH) can be used for various food security reasons: from stabilizing domestic prices and reducing exposure from consumers to food price volatility to the distribution of food to vulnerable groups.
As with export restrictions and prohibitions, the measures that one WTO member adopts to ensure its own food security are not necessarily good for the food security of other WTO members. A permanent solution for PWDs is unlikely to occur at MC13 if the food safety concerns of other WTO members are not properly addressed. A recent communication from Brazil, a PSH “no” supporter, can shed some light on where these concerns lie. According to the communication, stocks acquired under PSH programs must not distort trade or harm the food security of other WTO members (paragraph 11.b), and agricultural products purchased for public stockholding must not be exported (paragraph 11.c).
At MC13, fine-tuning the existing regulations for export restrictions and bans can be a good starting point for continuing to achieve good food security results. Agreeing on how to reduce trade-distorting domestic support, including on the long-standing cotton problem, would be equally important for a significant portion of WTO Members, both developed and developing. development.
As a WTO report on the effects of the COVID-19 pandemic on cotton-producing members notes, negotiations on trade-distorting cotton domestic support have so far only progressed. slowly, and cotton is essential to the food security of millions of people around the world. Africa. A credible outcome on food security at MC13 should necessarily discuss the limits of the Aggregate Measurement of Support (AMS) to cotton, as well as clear and well-defined implementation periods for the reduction of domestic support to this commodity. In this regard, WTO members may wish to consider closely the language of the draft ministerial decision on cotton submitted by Burkina Faso on behalf of the Sectoral Initiative on Cotton (C4) in September 2021.
The links between all these issues indicate a comprehensive approach to the ongoing work of the WTO on agriculture and food security. Now that MC12 is behind them, WTO members have the time and space to think again about what that might look like.