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The New Trade Opportunity – A Global Perspective
At the 4th Annual Chicago Council on Global Affairs Global Food Security Symposium in Washington, D.C., Hon. Ann M. Veneman led a panel discussion titled The New Trade Opportunity, which called for a reinvigoration of the trade agenda for food security. The panel highlighted several concerns, particularly the need for infrastructural changes and regulatory coordination at the global level to reduce trade barriers.
New England Complex Systems Institute President Dr. Yaneer Bar-Yam explained, “There is a decreased global view in the issues we face. Many policy discussions don’t realize how tightly we are linked globally. Economic policy making needs to be made at the global level and global concerns need to be thought of in this context.”
Dr. Bar-Yam continued by explaining how commodity price drivers, such as the conversion of corn to ethanol and speculation on commodity markets, are highly linked with poor social conditions and unemployment. These factors, when paired with poor infrastructure systems and strict regulatory requirements directly affect free flowing trade and cause political unrest and social instability.
Rabobank International global strategist David C. Nelson discussed the importance of trade commodity finance and said, “These food security disruptions cause major challenges. It becomes hard for countries to keep trade agreements.”
The panel discussed how recent responses to commodity price increases, such as food riots, demonstrate that prices are currently at the threshold for social instability, underlining the extent to which countries rely on global markets. Price increases, according to Dr. Shadrack Ralekeno Moephuli, “Make developing countries more reluctant to low their trade standards”, resulting in tariff issues and barriers. According to Michael Smart, vice president of Rock Creek Global Advisors, “Developing countries are the most hurt by decreased exports. All sides need to reduce their barriers.”
Ann M. Veneman opened the panel discussion by saying, “Agriculture is the make or break part of any trade agreement,” and that globally, we need to focus on infrastructure and regulatory issues. She went on to suggest food safety and sanitary and phytosanitary issues as a place to start, as well as the importance of international participation in these regulatory issues.
The panel agreed that regulatory coordination and the establishment of practical core obligations at the global level will lead to reduced barriers to trade, and according to Smart, “establishing regulatory coordination for trade barriers will lead to harmonization”. Multilateral trading will lead to the stability of global food prices, crucial for food planning and trade agreements.
Panel members also agreed that increased international coordination of regulations, communication between countries, as well as infrastructural improvements would lead to increased trade, thus facilitating the multilateral agreement necessary to support our global food security.