DEPUTY DIRECTOR-GENERAL ALAN WM. WOLFF
As we come to the close of the second decade of the second millennium, the challenges to agricultural policy, never inconsiderable, are of a different nature and magnitude than those faced by prior generations. Among these are major changes in weather patterns, emerging environmental constraints and the increasing use of trade measures to deal with geopolitical objectives. The technological context in which agricultural policies will be set is evolving rapidly. The global economy is well on its way to becoming to a large extent digital. While less understood, artificial intelligence will play an increasingly stronger role. Biotechnology will shape the production of food. Taken together these forces will shape global agriculture in the coming decades. The changes wrought will be as profound as those that occurred due to the Green Revolution(1). Added to these challenges will be demographic changes both in population size and location, outbreaks of animal and plant diseases and changes in consumer preferences affecting which foods are in increasing demand.
This past year was characterized by disruptive events -- extremes of weather decimated the onion crop in India, swine flu had a severe impact on the domestic supply of pork in China, trade hostilities between the U.S. and China have shifted trade flows, and widespread bush fires in Australia are having a substantial impact on food production in that country.
The decision of Minister Julia Klöckner in hosting this 12th Agriculture Ministers' Summit giving special attention to international trade is particularly timely as the 12th WTO Ministerial Conference will be held in June 2020. It is now necessary for agriculture ministers to join together to consider how best to provide answers to common concerns and to reflect solutions in trade negotiations in a demanding global policy and physical environment.
Multilateral trade agreements will be needed to meet these challenges. Solutions will be needed in at least six areas:
- Improving agility: Extreme weather events as well as outbreaks of disease will require prompt and effective responses. Food will need to move more freely from areas of surplus to areas of scarcity. Demand will increase as the world's population expands by an additional two billion individuals by mid-century and it must be met with sustainable agricultural production.
- Increasing transparency. Knowledge about the policy measures that other countries take will be needed both to enable national decisions to be based on as full information as possible as well as to administer international agricultural accords.
- Achieving balance. A new consensus will be needed to plot a path toward finding negotiated solutions with respect to market access, domestic support, export restrictions, food security, and to address the needs of cotton producers as well as addressing other issues of interest to the WTO's Members. Trade policies and related domestic policies that affect trade will need to be recalibrated and incorporated in an updated WTO Agreement on Agriculture.
- Benefitting from the global digital economy. Agriculture ministers must assure that the E-commerce negotiations at the WTO fully serve the interests of their farmers and consumers.
- Increasing sustainabilty. While feeding all, it is imperative to find ways of reducing waste, improving productivity, and limiting negative impacts on the environment. Improvements in the rules of the trading system need to be viewed increasingly through the lens of creating a circular economy(2). A first imperative is to come to an agreement by the Ministerial Meeting of the WTO in Nur Sultan in June to discipline fisheries subsidies.
- Rebuilding dispute settlement. A major differentiating factor of the WTO is the enforceability of its rules. A negotiated outcome that restores a binding, 2-stage, independent, dispute settlement system is an imperative for agriculture.
Agriculture ministers of major exporting and importing countries have a special responsibility(3) to address, through trade negotiations, challenges in which trade plays or can play a part:
- Unpredictable, devastating weather conditions are having and will continue to have a severe negative impact on agriculture.
- Demographics indicate that by the year 2050 there will be 2 billion more people to feed worldwide.
- Environmental and health concerns will increasingly drive national policies as well as consumer preferences.
- The work of updating the WTO rule book to address the needs of the digital economy is moving forward. E-commerce negotiations at the WTO should take fully into account the needs of agriculture. Agricultural producers and consumers must have access to needed data, goods and services available in a global digital economy.
The world needs a smoothly operating agricultural machine, and the parts of that machine, national agricultural policies need to complement each other, not run at cross purposes. Trade rules provide the necessary guarantee that food will be available at affordable prices when needed thereby ensuring livelihood security, particularly for rural households. Trade rules also help to ensure that food is safe by allowing countries to impose appropriate sanitary and phytosanitary measures without unnecessarily restricting trade. In short, trade rules allow all countries to take care of their food security by working cooperatively with each other.
The WTO Agreement on Agriculture rests on the unstated recognition by all WTO Members that the agricultural policies of others matter. This is true whether the Member involved is a net importer or a net exporter, whether it is developed or developing. Also unstated is the conclusion reached that no bilateral or regional agreement can be sufficient to address many of the most pressing issues of agricultural trade, particularly domestic support. Only a multilateral approach is possible.
The international system is in the process of moving from one based solely on the nation state to one in which national governments increasingly take an active interest in other countries’ policies, especially those that result in effects outside those countries’ borders. (4) Insofar as agriculture is concerned, this evolution can be seen in the Agreement on Agriculture which went into effect when the WTO was created. The Agreement set limits on the amount of domestic support (subsidies) that any Member could give. The next step in this process of international responsibility was the banning of agricultural export subsidies at Nairobi Ministerial Meeting in 2015. The process is likely to go further. At present, WTO Members have tabled proposals to place additional limits on the granting of domestic support.
The WTO is turning 25 this month, as are the Agreement on Agriculture, the Agreement on on the Application of Sanitary and Phytosanitary Measures and the Agreement on Technical Barriers to Trade. These and many other WTO agreements – including the Trade Facilitation Agreement - adopted in 2013 and the Decision on Export Competition in 2015 - have successfully contributed to the reform of the agriculture sector and made the trading environment more predictable and fairer.
More needs to be done. Trade distortions, particularly in the form of subsidies that often also contribute to maintaining unsustainable production methods must be reduced. Further efforts are needed to discipline border measures that often take the form of high tariffs and export restrictions.
As Agriculture Ministers, you need an effective multilateral trading system and, as important, the WTO needs your active engagement. Reform of the WTO's rules would not only result in increased production in a sustainable manner to feed the world’s growing population but will also have a positive impact on the environment. You have a chance to multiply the benefits of your policies by becoming more deeply involved in trade negotiations and through collaborating extensively with your trade colleagues. I urge you to do so.
- The Green Revolution: Norman Borlaug received the Nobel Peace Prize in 1970 for the development of high-yielding varieties of cereal grains, expansion the use of synthetic fertilizers, and pesticides, greatly increasing yields of crops worldwide, with great benefits for developing countries. Back to text
See for example the World Economic Forum Paper posted at https://www.weforum.org/agenda/2019/01/how-to-build-a-circular-economy-for-food/. Back to text
The term “countries” is meant here to include the European Union. Back to text
Richard Haass, in an article in Foreign Affairs in January/February 2017, entitled World Order 2.0, The Case For Sovereign Obligation, cites the WTO as an example of countries contributing to a global order in part through agreements that regulate policies that in much of world history was considered solely a matter of domestic concern. Back to text