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Harnessing Trade for Development and Food Security
On January 28, the Global Harvest Initiative (GHI) and New Markets Lab introduced a new policy report on international trade, agriculture, and development. The report demonstrates the importance of moving forward to integrate small and medium scale farmers into regional and global trading systems. The report overview was presented by Katrin Kuhlmann, President of the New Markets Lab. The current USTR Ambassador for Agriculture Trade, Dr. Islam Siddiqui, and the USDA Deputy Under Secretary for Farm and Foreign Agricultural Services, Darci Vetter, provided timely insights into the potential for trade to mobilize opportunity for smallholder farmers and producers in developing countries.
Trade is a vital policy component of a comprehensive approach to improving global agricultural productivity and addressing food security. The Obama Administration has built upon prior trade efforts and recently has promoted one of the most ambitious trade agendas in the past several decades. The Office of the U.S. Trade Representative estimates that trade has the potential to generate $1 trillion dollars in additional global GDP, most of which would benefit developing countries. Nowhere is this more true than in Africa, a continent of great need, as well as untapped potential.
Trade must be considered a critical component of agricultural development and economic growth. But around the world, small farmers and producers struggle to engage in value chains whose operation is governed by a complex regimen of rules, regulations, and standards that many neither know nor understand. Likewise, governments often lack the technical knowledge and capacity to engage with a rapidly changing, complicated trading system.
The U.S. Department of Agriculture’s investment in government trade capacity building programs also benefits U.S. farmers. As part of the CAFTA-DR (Central American Free Trade Agreement-Dominican Republic), every dollar invested in building the trade capacity of Central American governments has resulted in seven dollars in U.S. trade revenue. Trade is critical to the health and growth of the U.S. economy. One million American jobs can be attributed to the $145 billion annual trade of agricultural products alone.
Recently, global trade negotiations have advanced disciplines that could help provide more clarity and cohesion for agricultural trade. In Bali at the Doha Round negotiation in December, countries worked together to reach an agreement on trade facilitation that would address improvements in customs rules to harness trade opportunities in fresh produce. A four-year agreement to allow some countries the ability to hold reserve grain stocks was negotiated, as long as transparency and non-trade distorting management of these stocks could be ensured. Unlike other sectors, agricultural trade has not been the subject of comprehensive negotiations and is still subject to many tariff and non-tariff barriers. This will require ongoing focus in the future as well as continual focus on trade capacity building for developing countries.
A panelist observed that “trade policy IS development policy, and must be targeted to support the least among us.” Rules-based systems that are predictable and harmonized, along with appropriate trade capacity building, will help developing country governments and producers tap into new opportunities for export to more developed markets. The US government has provided trade facilitation and capacity building support to over 50 countries, enabling them to build their ability to tap into regional and global value chains. Future growth in regional and global trade will require a strong focus on harmonizing regulatory issues, not simply on tariff barriers. Involving the private sector in regional and global value chain development, and creating public-private-local partnerships is another way for smallholder producers to strengthen their participation in food and agriculture value chains.
While progress is welcome, the USTR seeks to ensure that future agreements find a better balance between the needs of multinational and regional agribusiness and small and medium size farmers and producers. Furthermore, agricultural trade conversations must take seriously the very real challenge climate change presents to the global food system and its ability to provide sufficient food, fiber, and fuel for over 9 billion people in 2050.