Previous posts to this blog have discussed trade-policy responses to the food price spikes of recent years; a recent study by Rob Howse and Tim Josling argued that WTO Members might be obliged to refrain from restricting exports to secure domestic food supply if doing so could adversely affect the food security of importing countries. This is an issue of special concern to import-dependent developing countries, where food price inflation may be amplified by larger balance of payments problems.
It looks as though not export restrictions, but rather subsidies and other domestic measures, are most prominently characterizing new food security programs. India is implementing a Food Security Act that WTO Director-General Robert Azevedo asserts is a violation of AMS commitments under the Agriculture Agreement. Food stockpiling has been a major issue in recent WTO Agriculture Committee proceedings.
The upcoming WTO Ministerial Conference in Bali this December will address a G-33 proposal to amend aspects of the Agriculture Agreement to enable greater stockpiling, subsidies and other food security measures. A recent ICTSD note about the proposal seems sympathetic to its objectives, stating that “insofar as it relates to problems arising from the effects of food price inflation, the G-33 proposal can more broadly be seen as symptomatic of the challenges many countries face in designing policies to achieve food security goals in the new price environment.”
Here’s a quote from the report’s conclusion:
“Although agricultural markets have evolved dramatically since 2007, global trade rules have not. Current disciplines on agriculture in the multilateral trading system deal primarily with the challenges of structural over-supply on global markets that characterized the 1980s and 1990s, but arguably do not respond effectively to problems associated with the volatile and rising prices for food and agriculture that many experts expect will continue to predominate in the years ahead. As a result, while exporting countries are able to rely on a relatively well- developed set of rules and mechanisms to address trade distortions on the import side, importing countries (including the poorest ones) are unable to rely on an equivalent regulatory framework to ensure stability and predictability in the supply of farm goods on world markets. Ambiguities and inconsistencies continue to affect the ability of WTO Members to understand and monitor new phenomena properly…”
My questions include:
- Are AMS amendments preferable to export restrictions as a means of addressing food security? The ICTSD note suggests that such measures might even help import-dependent countries, where such countries can enter into deals with stockpiling countries.The interplay of potential effects on internal and external markets seems incredibly complex.
- How might the G-33 negotiations affect the balance of agriculture negotiations? The proposal’s supporters are linking it to trade facilitation negotiations sought by developed countries. From a policy point of view, the proposal potentially impedes the case for agricultural market access that developing countries have put forward, and in that sense depends on an effective revitalization of the special and differential treatment principle.