DEPUTY DIRECTOR-GENERAL JEAN-MARIE PAUGAM
Ladies and Gentlemen
The Oxford University Press has recently published a significant piece of work entitled “Food for All” and subtitled “the International Organizations and the transformation of Agriculture”. Page 2 of the introduction lists the “Big Five” Organisations of the book's focus: FAO, World Bank, World Food Program, CGIAR or Consultative Group of International Agricultural Research (CGIAR) and IFAD, the International Fund for Agricultural Development. As you immediately notice, the WTO is not considered to be amongst these organizations.
More than 25 years ago the landmark Agreement on Agriculture was concluded in the WTO. This agreement states at the end of its preamble:
“Noting that commitments under the reform programme should be made in an equitable way among all Members, having regard to non-trade concerns, including food security and the need to protect the environment; having regard to the agreement that special and differential treatment for developing countries is an integral element of the negotiations, and taking into account the possible negative effects of the implementation of the reform programme on least-developed and net food-importing developing countries;”
So, the message to take away from the combined reading of these two texts is apparently straightforward: the WTO does not deal directly with Food Security.
Food Security is merely a “non-trade concern”: that is, a political dimension that should mainly be taken into consideration if the reform program of trade in agriculture were to affect the interests of some developing countries negatively.
If that is indeed the case, why then would we be here? This is precisely what I want to discuss.
In fact, there are three reasons for us to discuss food security, which I would elaborate on later
— Firstly, the issue of food security has been increasingly growing in importance within the WTO — and played a central role in the outcomes of our recent twelfth ministerial meeting, MC12.
— Secondly, the role of trade and the WTO in contributing to food security has become fully recognised by all actors working on international economic cooperation.
— Thirdly, we urgently need to think about creative ways of bridging the remaining differences among our members on how best to address food security.
My first point is about yesterday. My second is about today. My third one is for tomorrow.
As mentioned already, the issue of food security was present when the WTO was established, both in the Agreement on Agriculture (even if labelled as a “non-trade concern”) and with the decision on Least Developed and Net Food Importing Developing Countries, which recognised inter alia the need for specific support to this category of countries.
In 1996, the World Food Summit in Rome agreed on a definition of food security which is still widely used today :
“Food security exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life.”
In the trade sphere, the Doha ministerial conference of 2001 was important in launching a comprehensive round of negotiations, including on agriculture.
In 2013 came the WTO's Bali Ministerial Conference, and decisions on a ‘peace clause’ for food bought at administered prices under Public Stockholding Programs by developing countries. This decision underscored the importance attached to food security by WTO members.
In 2015, the importance of food security was also reflected in the UN's “zero hunger” Sustainable Development Goal, SDG 2, as well as more specifically in the SDG target 2b, which committed countries to:
“Correct and prevent trade restrictions and distortions in world agricultural markets, including through the parallel elimination of all forms of agricultural export subsidies and all export measures with equivalent effect, in accordance with the mandate of the Doha Development Round”.
The commitment to eliminate export subsidies was broadly accomplished by the WTO just a few months later, at the WTO's Nairobi Ministerial Conference — although much more still needs to be done to ensure that progress on this target contributes meaningfully to the objective of ending hunger and malnutrition.
Finally, MC12 brought a significant new milestone for food security.
The conference agreed on a series of results in this area:,
— First and foremost a landmark agreement on fisheries subsidies, after more than 20 years of negotiations, which will represent a major contribution to the food security of hundreds of millions of people.
— Also, a Ministerial Decision exempting from export restrictions the food bought by the World Food Programme for humanitarian aid. The WFP's Executive Director, David Beasley, recently welcomed this decision.
— A Ministerial Declaration on the emergency response to food insecurity. This is the first that WTO ministers have come together to issue a declaration on this topic. It spells out the context of rising food prices, trade disruptions, and restrictions, and the worrying increase in the number and share of undernourished and food insecure people, undermining progress toward Sustainable Development Goal 2.
— On the qualitative dimension of food security, a Sanitary and Phytosanitary Declaration, launched work on new challenges related to food safety and animal and plant health that can affect trade now and in the future. These include climate change, demographic change, innovation in tools and technologies, and shifting pest and disease patterns. Global food security is one of the themes explicitly identified in the declaration.
After all this, where do we stand now? The contribution of trade policy to strengthening food security is well recognised today, by all key players, especially in the search for ways and means to combat the current food crisis.
The WTO is participating in all critical international partnership initiatives: the Global Crisis Response Group convened by the UN Secretary General. It is coordinating closely, at leaders' level, with other relevant economic agencies such as the IMF, World Bank, FAO, WFP etc. And the political impetus delivered by the G7 and the G20 also recognises the WTO's contribution explicitly.
What is our contribution about? The role of the WTO is threefold.
Firstly, we try to keep markets transparent. We ask our members to notify the trade measures they are taking, whether restrictive or trade-facilitating, concerning food trade. Keeping markets transparent is extremely important because it helps control the risk of chain reaction and proliferation of restrictive measures. If you do not know what your neighbour is doing, you might be tempted to adopt pre-emptive policies restricting trade. Transparency also helps fight speculation on food prices.
We currently count 23 countries that have adopted 39 trade restrictive measures prohibiting exports of food, feed, and fertilizers.
Secondly, we try to keep markets open. Our rules recognize that every country has the right to adopt restrictive trade measures concerning food in times of crisis. But trade restrictions have also contributed to a rise in global food and fertilizer prices. So we ask our Members to keep these measures focused, proportionate and reversible so that they can revert to a normal trading situation as soon as possible.
Thirdly, we must help increase food productivity and availability by reforming trade-distorting agricultural policies. This has been the long-standing agenda of the WTO negotiations on agriculture since the Uruguay Round. Unfortunately, this effort has stalled several times, including at MC12. What is the main obstacle that prevented us from reaching an agreement on that front too? Well, in essence, it came from diverging views regarding food security, particularly the purchase of food at administered prices under developing countries' programmes for Public Stockholding.
This leads me to my third point, which is about:
If we want to succeed, and we need to succeed in embracing agricultural trade reform tomorrow, I bet that we will need to devise a creative way of renewing discussions on agriculture in the WTO. One way to start could be to look at the two “non-trade concerns” from the Uruguay Round: food security and the environment, which have become central to agricultural policies today.
Food Security first, because Members need to find a permanent solution to the question of Public Stockholding in the broader context of the reform program being negotiated under Article 20 of the Agreement on Agriculture. New proposals have been presented shortly ahead of MC12, from the G33 and Brazil. In my view, they contain interesting ideas that could help revitalise the discussion, including on issues such as the External Reference Price, Product Coverage and notifications, export monitoring, and safeguards. These issues are key in finding a permanent solution. They want deeper discussion and analysis. Agreement on these could pave the way for the creation of a permanent solution which would accommodate the interests of all Members. Under the auspices of the COASS, perhaps the Secretariat could help Members review the economic data that could inform the design of such a solution? At any rate, a new look at these parameters is needed to overcome the current impasse, along with creative thinking.
Then the environment, which of course includes climate change, will probably become the other major issue dominating agricultural reform discussions tomorrow.
— Firstly, agricultural productivity and trade have already been adversely affected by climate change, especially in arid countries, thus aggravating the food insecurity of their citizens. For many developing countries, climate change and food security have become two sides of the same coin.
— Secondly, it is of utmost importance to “repurpose” the existing trade-distorting agricultural subsidies. They represent a public expenditure envelope of close to 800 billion USD annually. This colossal sum of public money could usefully be redirected to ensure that agriculture contributes to the fight against climate change. There is scope to broaden the rules under the AoA to give countries more flexibility to provide subsidies which would help adaptation and mitigation efforts. Developing countries would also need to be assisted so that they can increase production more sustainably.
Ladies and Gentlemen from the Chair's program, what I would like to ask you to do is to help us reconcile the memories of yesterday, the urgency of today, and the challenges of tomorrow. How can we make sense of a so-called ‘non-trade concern’ taking centre stage at the World Trade Organisation? How can we optimally articulate the relationship between food security and trade? How can we update the concepts underlying the negotiations on agriculture so that reforming agricultural trade-distorting practices is no longer seen as a Zero-sum game of trade concessions, and instead becomes a powerful tool to fight climate change?
Lots of research will be needed here to deepen our understanding of fundamental concepts and provide bold and fresh policy suggestions that could help the WTO revitalise its negotiations on agricultural trade reform.
With all the brainpower gathered here today, I trust that the WTO chairs' program is the place to begin making progress on a generational challenge of this sort. We count on you!
For the time being I leave you in the very able hands of a great panel on which I am pleased to recognize such talented speakers as:
- Edwini Kessie, Director of Agricultural Division at the WTO.
- Roberta Piermartini, chief of Trade Costs Analysis,
- Annalisa Conte, the Director of the Geneva office of the World Food Programme
Thank you very much for your attention.