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Removing Barriers to Global and Regional Trade in Agriculture
The Global Harvest Initiative released an updated trade policy paper, International Trade and Agriculture: Supporting Value Chains to Deliver Development and Food Security, in January 2014. Click here for the most current paper from GHI.
“Having looked at the various factors that influence [agricultural] production and consumption, we must now turn to what it is that links them. At the global level, the link is established through international trade. Trade becomes the transmission belt through which supply adjusts to demand. It allows food to travel from the land of the plenty to the land of the few. When that transmission belt is disrupted through trade barriers; unexpected turbulence arises on the market.” —World Trade Organization Director-General Pascal Lamy, January 2011 Promoting global and regional trade in agriculture is essential to enhancing food security and to sustainably meeting the demand of a growing, increasingly affluent population, projected to surpass 9 billion by mid century. Almost one-fourth of global food and agricultural production enters international commerce, and enhancing the ability to trade these products across borders will promote global food security, helping to alleviate production shortfalls by facilitating movement of products from surplus areas to deficit areas. Increasing urbanization, changing weather patterns and limited water availability will increase the importance of global and regional agricultural trade issues as the century progresses. This paper outlines the importance of international trade to food security worldwide and includes recommendations by the Global Harvest Initiative to reduce trade barriers that impede market access, investment and the efficient flow of food and agricultural goods. Efficiency Trade liberalization will play an essential role in promoting global food security by making the international food system more efficient. By providing producers with access to larger markets outside of their local and regional areas, economies of size can be utilized, enabling countries to expand food output efficiently. Resource Allocation and Population Shifts Trade is also critical because population centers and natural resources are not evenly distributed around the world. As a result, most nations cannot achieve food self-sufficiency, and attempts to do so prove very costly both in economic and environmental terms. Since 70 percent of the world’s population will live in urban areas by mid century, unencumbered trade will become increasingly important to ensure food availability in the densely populated areas. Changing Weather Patterns The expected increasing volatility of weather patterns and temperatures will also constrain food production. Effective and efficient food and agricultural trade becomes even more important during times of severe weather events, as reliable access to international markets provides an important source of security that cannot be achieved via attempts at self-sufficiency. RECOMMENDATIONS GHI proposes several recommendations to remove barriers to trade and enhance global food security.
- The U.S. Government is encouraged to resume the mantle of leadership on trade Both developing and emerging economies have a growing stake in open trade as a growth stimulant and the political cost of non-action by both is increasing. Significant reductions in global agricultural barriers are very recent, beginning with completion of the Uruguay Round trade negotiations in 1995 which established the WTO. Trade in agricultural products has since flourished. The U.S. Government played a pivotal role in securing that agreement which was strongly supported by the U.S. private sector. A similar leadership role for the United States now—along with increased efforts by others—is required to conclude the Doha Round.The U.S. Government should seek all types of new trade agreements—bilateral, regional and multilateral—with nations and regions that are willing to reduce trade barriers and commit to freer trade. To achieve this, the Obama Administration should work with Congress to pass new “Fast Track” negotiating authority, without which many nations will be hesitant to enter into trade negotiations with the U.S.
- Provide leadership for quick completion of the WTO Doha Development Round GHI looks to multilateral negotiations at the WTO as the most comprehensive and sustainable way to achieve trade liberalization and enhanced global food security. The WTO is rules-based, embraces numerous policies which must be liberalized, and all member countries—developed, emerging and least developed—must participate. Agricultural trade liberalization in particular can best be accomplished as part of larger trade rounds, since it involves a sector which requires trade-offs with other sectors, and since certain issues—such as eliminating export subsidies and trade-distorting measures—can only be accomplished at the multilateral level. The Doha Development Round, launched in 2001, has missed many deadlines as interest has waned. Now, however, it is critical for the U.S. to provide leadership to conclude the negotiations and set in place the progress that has been achieved thus far. Attention then can be devoted to establishing more streamlined and effective enforcement procedures.
- Immediate enactment of the Korea, Panama, Colombia regional trade agreements, and rapid completion of the Trans-Pacific Partnership negotiations GHI also recognizes that bilateral and regional trade negotiations can lead to broader agricultural trade liberalization. Many such agreements are being negotiated around the world, but the United States remains on the sidelines of most of this activity. However, three already-concluded agreements with Panama, South Korea, and Colombia are pending Congressional approval. Congress is encouraged to act upon these swiftly and the Administration should strongly support such action. Additionally, further emphasis should be placed on expediting the Trans-Pacific Partnership free trade agreement negotiations, and limited progress appears to have been made at the April 2011 TPP Summit in Singapore.
- Reduce specific global food security trade distortions Beyond strong support for swiftly completing the Doha Development Round, GHI recognizes that there are key issues related to global food security not being considered in the Doha Round, including export restrictions and prohibitions; high tariffs and very restrictive quotas on commodity and food imports, particularly in countries with a growing food deficit; restrictive import measures on equipment and modern technology that would improve agriculture productivity, particularly in less developed countries; and sanitary and phytosanitary measures not based on science and that restrict or prohibit imports of animal products and biotechnology. These are significant barriers that should be addressed with urgency.To heighten international attention on the necessity of enhancing global food security, a WTO Agreement on Global Food Security could be launched in the ongoing Doha Development Round. This negotiation could entail, for example, the provision of duty-free, quota-free treatment to least-developed countries, further disciplines on agricultural export restrictions, and trade facilitation, which, combined with capacity building, would make a particularly important contribution to regional integration and food security across Africa and elsewhere. It is unlikely the a Global Food Security negotiation could be completed before conclusion of the Doha Round but significant progress could be made as part of the Doha Agreement.Specifically:
- The DDA Agreement on Agriculture commits all WTO Members to eliminate export restrictions and prohibitions and export subsidy and export credit programs from the first day of implementation.
- WTO Director General Pascal Lamy could issue a declaration to launch the negotiation of the Agreement on Global Food Security and commit all WTO Members to reach agreement by 2015.
- The Declaration could establish a Global Food Security Agreement Negotiating Committee, specify all policies to be included in the agreement, and facilitate the harmonization of sanitary and phytosanitary measures.
GHI recognizes that addressing these challenges in a multilateral trade round requires time while urgent actions are needed to global good security in the near term. GHI thus encourages efforts to address trade barriers within countries and at the regional and international levels. In particular, GHI supports immediate actions to identify and address these barriers, including high level summits and other global forums and encourages the U.S. Government to use all available trade and agricultural policy vehicles to improve regional and international markets for food. Further, GHI supports using capacity building and technical assistance programs, including those that are part of the U.S. Feed the Future initiative, to facilitate removal of agricultural trade barriers, improve supply chains and increase farmers’ access to markets (focusing in particular on regional markets) and improve capacity to comply with trade rules and regulations, including complex sanitary and phytosanitary standards. This could be undertaken immediately through existing capacity building programs, and adequate funding should be made available to address these challenges. CONCLUSION The implementation of these recommendations would affect significant improvements to international trade in food and agricultural products, and there is considerable urgency to do so because of the unpredictable impacts of economic changes, population shifts and changing weather events. Global food security can be effectively enhanced to fully meet the requirements of a growing and more affluent global population. Expanding and strengthening multilateral and regional trade agreements can be a major contributor to this goal by enabling expanded market access, increased efficiency and greater investment in the food and agriculture sectors. GHI’s first issue brief addressing the importance of agricultural research was released on April 21, 2011. Subsequent GHI issue briefs will address development assistance, science-based technologies, and private investment.
Trans-Pacific Partnership: http://www.ustr.gov/tpp SELECTED RESOURCES World Trade Organization Agriculture Portala http://www.wto.org/english/tratop_e/agric_e/agric_e.htm United States Trade Representative http://www.ustr.gov International Food & Agricultural Trade Policy Council http://www.agritrade.org The World Bank http://www.worldbank.org Katrin Kuhlmann, German Marshall Fund, “African Markets and Trade: Critical Links to Global Food Security”, April 2010. http://www.agbiz.co.za/LinkClick.aspx?fileticket=oYpIO6PNzDo%3D&tabid=257 John Simon and Susan Sechler, “Africa’s once-and-future food crisis”, POLITICO, March 9, 2011. www.politico.com/news/stories/0311/50918.html Center for Strategic and International Studies, “The Role of Markets and Trade in Global Food Security”, June 2010. http://csis.org/files/publication/100622_Hebebrand_RoleOfMarkets_WEB.pdf USAID – Agricultural Markets and Trade Portal http://www.usaid.gov/our_work/agriculture/ag_markets_trade.htm Feed the Future http://www.feedthefuture.gov/gh_factsheet.html The World Food Prize http://www.worldfoodprize.org World Wildlife Fund – Agriculture Portal http://www.worldwildlife.org/what/globalmarkets/agriculture United Nations Conference on Trade and Development http://www.unctad.org/Templates/StartPage.asp?intItemID=2068 The Economist, “Brazilian Agriculture: The miracle of the cerrado”, August 26, 2010. http://www.economist.com/node/16886442 The Economist, “The 9 billion-people question – A special report on feeding the world”, February 26, 2011. http://www.economist.com/node/18200618 OECD Trade and Agricultural Directorate Department Portal http://www.oecd.org/department/0,3355,en_2649_33727_1_1_1_1_1,00.html The World Bank Agriculture and Rural Development Portal http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTARD/0,,menuPK:336688~pagePK:149018~piPK:149093~theSitePK:336682,00.html Field to Market: The Keystone Alliance for Sustainable Agriculture http://www.fieldtomarket.org USDA Foreign Agricultural Service http://www.fas.usda.gov The Nature Conservancy http://www.nature.org/index.htm The International Conservation Caucus Foundation (ICCF) http://www.iccfoundation.us/index.php Conservation International http://www.conservation.org/Pages/default.aspx The Congressional Hunger Center http://www.hungercenter.org