The World Trade Organisation (WTO) - in the wake of rising food protectionism sentiment rippling around the world - is attempting to prop up plans to prevent further food bans from cropping up amid the war in Ukraine.
Concerned that trade disruptions, record prices and excessive volatility for food and agricultural products could seriously undermine food security more than it already is, WTO has drafted a ministerial declaration on trade and food security.
According to Ngozi Okonjo-Iweala, director-general of the WTO, the international body has noted the existence of widespread support for the declaration. The draft shows the commitment of the WTO to facilitate trade and work on more resilient food and agriculture markets, with it expressly mentioning cereals and fertilisers.
Time to Restart Trade
Tight supplies of wheat, with cereal demand outpacing supply, have driven cereal prices to an all-time high, with the FAO Cereal Price Index averaging 173.4 points, a 30 percent increase in a year. Fertiliser prices, meanwhile, have also doubled due to the Ukraine war, according to a UN report on the impacts of the war.
“We underscore the need for agri-food trade to flow and reaffirm the importance of not imposing export prohibitions or restrictions in a manner inconsistent with relevant WTO provisions,” reads the draft.
The text also aims to align countries with WTO rules and guidelines. With measures being “temporary, targeted, transparent and proportionate.”
WTO has warned that if countries do enforce export bans to protect domestic supplies - as has happened in Indonesia with palm oil, in Malaysia with chicken or in India with wheat - they are risking several impacts for other WTO members and exacerbating the food crisis.
“Members imposing such measures should take into account their possible impact on other members, including developing countries and particularly least-developed and net food-importing developing countries.”
Everyone's Not on Board
In a statement, the WTO said that India, Egypt, and Sri Lanka are the three countries that do not support both texts. Egypt and Sri Lanka are countries that vastly depend on food imports and are seeking to avoid having to export any food when they are under critical food needs.
Sri Lanka is facing a severe food crisis, and the country has called on farmers to boost rice planting to secure food supplies. Meanwhile, Egypt’s food spending might be off-the-charts this year, with its state spending plans for wheat acquisition set to double to US$5.7 billion.
India is a different case; the country is entrenched in a domestic food reserves regulation dispute with the WTO. The Asian nation claims that it is limiting its capabilities to export food when there is a shortage of grains around the world. This led to the country banning wheat exports weeks after it declared that it could feed the world.
The WTO also expanded on other important food security issues in the draft ministerial declaration on trade and food security.
The text underscores the importance of cooperation to ensure “enhanced productivity and production, trade availability and accessibility and affordability of food,”, especially in humanitarian emergencies. The WTO also recognised that adequate food stocks contribute to domestic food securities and reaffirms its message for countries to share their surpluses following WTO rules.
“We agree that trade, along with domestic production, plays a vital role in improving global food security in all its dimensions and enhancing nutrition.”
