Pandemic, Trade and SDGs – 6
Disruptions to supply chains could undermine farm sector’s resilience, with damaging consequences for global food security
Eliminating hunger and malnutrition and ensuring global food security are among the important challenges that the world currently faces. The Covid-19 pandemic and governments’ responses to deal with its aftershocks have further exposed the food security challenges faced by numerous countries. The role of international trade and functioning food markets is critical in achieving global food security objectives. International trade can contribute to ensuring food security in several ways. Trade acts like a global transmission belt to enable the movement of food from places having surplus to those having a deficit. This balancing role of trade is vital for addressing food insecurity and hunger as the majority of countries in world are net food importers relying on international or regional trade for their access to food. Frequent climatic aberrations and weather events make functioning food markets and open international trade even more imperative to ensure that no part of the planet is deprived of food.
Trade also fosters competition and an efficient allocation of resources and hence allows food to be produced where this can be most efficiently done leading to sustainable global food production.
International trade also catalyses economic growth and development via efficiency gains and enhanced competitiveness of domestic economy hence supporting poverty reduction strategies and people’s access to food. International trade also acts as a buffer against possible price volatility risks resulting from more frequent domestic supply shocks as such supply shocks are weakly correlated across countries leading to stable domestic availability of food. By facilitating the availability of an enhanced variety of food throughout the year, international trade can also make a positive contribution to nutritional objectives; though in some cases trade is also associated to potential risks linked to over-nutrition.
In order for the potential development role of trade to be harnessed by all countries, it is important to ensure that trade is fair and market-oriented, and trade barriers and distortions are addressed.
The WTO Agreement on Agriculture (AoA) is instrumental in the multilateral reform process ‘to correct and prevent trade restrictions and distortions in world agricultural markets’ and has remained the bedrock of domestic policy reforms in WTO Members towards this objective. Additionally, the Marrakesh Ministerial Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries includes various mechanisms for international cooperation and collaboration towards, inter alia, enhancing agricultural productivity and facilitating access to food with a special attention to least developed countries (LDCs) and net-food importing developing countries (NFIDCs). The WTO Agreement on Sanitary and phytosanitary measures (SPS Agreement) sets out the basic rules for food safety and animal and plant health standards; the Agreement recognizes the right of countries to establish their SPS measures and seeks to minimize their negative effects on trade.
The AoA’s legal framework is being strengthened further through the ongoing agriculture negotiations. These negotiations target the three main pillars of the Agreement, namely, market access, domestic support and export competition as well as some other additional issues including public stockholding for food security purposes, special safeguard mechanism, export restrictions and specific trade issues related to cotton.
In the Ministerial Decision on Export Competition (the “Nairobi Decision”) adopted on December 19, 2015 at the 10th WTO Ministerial Conference in Nairobi, Members committed to eliminate scheduled agricultural export subsidies entitlements and put in place disciplines on export measures with equivalent effect, thereby delivering on target 2.b of “Zero Hunger” goal. As of February 2021, twelve out of the sixteen WTO Members with export subsidies reduction commitments in their schedules at the time of the adoption of the Decision had amended their schedules of commitments pursuant to it, and the draft schedules of two other Members are still in the process of being reviewed by other Members. As expected, the downward trend observed in export subsidy outlays notified to the WTO has continued after the adoption of the Decision.
Since the outbreak of COVID-19 in 2020, many WTO Members have introduced additional support to the agriculture sector intended to stabilise the markets and help farmers to cope with the pandemic and its economic consequences.
While agricultural trade has proven more resilient than trade in other goods owing to the essential nature of food products, additional disruptions to supply chains could start to undermine this resilience, with damaging consequences for global food security. This is why the WTO Committee on Agriculture has paid special attention to COVID-19 and related policy measures and held dedicated discussions starting with a special meeting of the Committee in June 2020 that focused on the pandemic and its impact on international agriculture and food trade within the overall framework of the AoA. Members specifically emphasized the importance of transparency in respect of measures adopted in response to the pandemic.
*Excerpted from report on WTO Contribution to the 2021 High-level Political Forum
– global bihari bureau
