Ideally, the World Food Programme exemption would be interpreted in good faith.
If WTO members want to continue delivering good outcomes on food security at the next WTO Ministerial Conference, clarifying the extant disciplines on export restrictions and prohibitions might be a possible way forward.
A permanent solution for Public Stockholding for Food Security Purposes is unlikely to happen at MC13 if the food security concerns of other WTO members are not properly addressed.
By Facundo Calvo, Agricultural Policy Analyst, IISD
A few years ago, trade negotiators pacing the corridors of the World Trade Organization (WTO) would not have expected a war in Europe, a global pandemic, and a global food crisis to dominate discussions at a WTO Ministerial Conference. In fact, the Food and Agriculture Organization of the UN (FAO) has reported that world hunger increased in 2020 under the shadow of COVID-19 pandemic. Zooming into the Black Sea, the closure of Ukrainian ports amidst the Russian invasion does not bode well for net food importing countries across the globe.
In June 2022, trade ministers from more than 100 WTO members gathered in Geneva to discuss international trade rules, including those on trade in food and agriculture. The Twelfth Ministerial Conference of the WTO (MC12) delivered a first important outcome on food security: a Ministerial Decision on World Food Programme (WFP) Food Purchases Exemption from Export Prohibitions or Restrictions – the WFP exemption.
Given its humanitarian nature and the invaluable contribution of the WFP to provide a lifeline to the most vulnerable populations, the WFP exemption had enough merit to garner consensus at MC12. Export restrictions have reportedly affected the WFP’s food procurement efficiency, meaning longer lead times, higher transportation costs, and, in the case of export prohibitions, meal losses and higher procurement prices.
The WFP exemption is a symbolically important outcome that showcases the political will of WTO members to tackle the ongoing food crisis. The WFP exemption could save time and ensure critical relief reaches the most vulnerable, as underlined by the World Food Programme. Importantly, by agreeing the WFP exemption, WTO members have demonstrated that the WTO is a forum where non-trade concerns such as food security can be progressed.
The WFP exemption strikes a delicate balance between the exemption as such (paragraph 1) and the possibility of WTO members adopting measures to ensure their own food security (paragraph 2). Ideally, the WFP exemption would be interpreted in good faith, and WTO members would ensure that the language of paragraph 2 does not water down (in practical terms) the language of paragraph 1, so that the ministerial decision would facilitate the work of the WFP to feed millions of vulnerable people. Whether this happens in practice remains to be seen.
The so-called ‘Geneva package’ of MC12 outcomes also includes a Ministerial Declaration on the Emergency Response to Food Insecurity (WTO Food Security Declaration). This is a welcome development. The WTO Food Security Declaration underscores the need for agricultural trade to flow and reaffirms the importance of not imposing export restrictions or prohibitions in a manner inconsistent with relevant WTO provisions (paragraph 4). Notably, it features a commitment to having a dedicated work programme in the WTO Committee on Agriculture (CoA) to operationalize the Marrakesh Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries (paragraph 8).
Yet, the WTO Food Security Declaration does not contain any binding rules on the use of export restrictions and prohibitions. While it is laudable that WTO members “resolve to ensure that any emergence measures introduced to address food security concerns shall minimize trade distortions as far as possible,” as well as be temporary, targeted, and transparent (paragraph 5), this is a best-endeavor clause in the context of a broader best-endeavor declaration.
As underscored by the International Food Policy Research Institute (IFPRI), export restrictions are mainly used by developing countries, with dramatic consequences for other developing countries. Since export restrictions tend to target commodities and staple food products such as wheat, rice, soybean, and palm oil, least developed countries (LDCs) that depend on such products to meet their basic dietary needs suffer the most. If WTO members want to continue delivering good outcomes on food security at the next WTO Ministerial Conference (MC13), clarifying the extant disciplines on export restrictions and prohibitions might be a possible way forward. This would entail dusting off both Article XI of the General Agreement on Tariffs and Trade (GATT 1994) and Article 12 of the Agreement on Agriculture.
The absence of clearer disciplines for export restrictions and prohibitions seems to contribute little to prepare WTO members for food crises. Like in a trade policy version of Nietzsche’s Ewige Wiederkunft (Eternal Recurrence), many food crises feature an increased use of export restrictions and prohibitions exacerbating food price spikes.
Negotiating export restrictions and prohibitions disciplines at the WTO promises to be everything but simple and straightforward. To revive these conversations, WTO members might start by looking at some of the existing proposals on the negotiating table. In April 2022, the LDC group submitted a proposal inviting a subset of WTO members to refrain from imposing export restrictions or prohibitions when basic food products are “purchased by LDCs for their domestic use” (paragraph 10). A similar proposal was circulated days ahead of MC12 to “exempt purchases of LDCs and NFIDCs [net food importing developing countries]” from export restrictions or prohibitions imposed by WTO members that are major exporters (paragraph 1.c). While a more in-depth discussion on export restrictions and prohibitions disciplines is needed, agreeing on some preliminary exemptions or carve-outs to the food purchases made by LDCs and NFIDCs (or any other group of WTO members particularly affected by the current food prices) could be a good starting point.
Further, for WTO members to continue delivering on food security, it would be necessary to recognize that the food security and the agriculture agendas are closely linked. While it made sense prior to MC12 to conceptually differentiate these two agendas through two separate draft ministerial decisions, one for food security, another for agriculture (especially because no substantive outcomes were expected on the agriculture agenda), sorting out the agriculture agenda can also help move forward the food security agenda. In other words, progress on the seven negotiating topics of the agriculture agenda would also be needed to deliver on food security and on SDG 2 (zero hunger).
For example, among these seven negotiating topics, Public Stockholding for Food Security Purposes (PSH) programmes may be used for a variety of food security reasons: from stabilizing domestic prices and reducing consumer’s exposure to food prices volatility to distributing food to vulnerable groups.
As in the case of export restrictions and prohibitions, measures that one WTO member adopts to ensure its own food security might not necessarily be good for the food security of other WTO members. A permanent solution for PSH is unlikely to happen at MC13 if the food security concerns of other WTO members are not properly addressed. A recent submission by Brazil, a “no” proponent of PSH, may shed light on where these concerns lie. According to the submission, stocks acquired under PSH programmes must not distort trade or adversely affect the food security of other WTO members (paragraph 11.b), and agricultural products procured for public stockholding shall not be exported (paragraph 11.c).
At MC13, refining the extant rulebook for export restrictions and prohibitions may be a good starting point to continue delivering good outcomes on food security. Agreeing on modalities to reduce trade distorting domestic support, including on the long-standing issue of cotton, would be equally important for a significant part of WTO members, both developed and developing.
As noted by a WTO report on the impacts of the COVID-19 pandemic on cotton-producing members, negotiations on trade-distorting domestic support to cotton have so far progressed only slowly, and cotton is key to the food security of millions of people in Africa. A credible outcome on food security at MC13 may discuss the limits on the Aggregate Measurement of Support (AMS) to cotton, as well as clear and well-defined implementation periods for the reduction of the domestic support to this commodity. In this regard, WTO members may consider taking a close look at the language of the Draft Ministerial Decision on Cotton submitted by Burkina Faso on behalf of the Sectoral Initiative on Cotton (C4) in September 2021.
The links between all of these issues point to a comprehensive approach to the WTO’s ongoing work on agriculture and food security. With MC12 now behind them, WTO members have the time and space to think anew about what this might look like.