The WTO’s ongoing negotiations on agriculture have a key role to play in helping establish fairer and more equitable food markets which in turn would help reduce global hunger and malnutrition and support the fight against climate change, Deputy Director-General Jean-Marie-Paugam said on 4 December. DDG Paugam spoke at a “Trading for Tomorrow” session on food security and climate change at the Food Systems Pavilion during the COP28 climate summit in Dubai. His remarks are below.
Excellencies,
Ladies and Gentlemen,
The “Emirates Declaration on Sustainable Agriculture, Resilient Food Systems, and Climate Action” comes as a new wake-up call. We need to improve the sustainability of our food systems. The climate crisis can’t be “kicked down the road”. Neither can hunger and malnutrition, or the environmental challenges facing the food and agricultural sector.
Ladies and Gentlemen,
as it is clearly laid out in the “Emirates declaration”, my key message is that agricultural trade reform in the WTO is fully part of this agenda.
There is no time for complacency. The challenges facing our food systems have been overwhelmingly documented.
Close to 10% of the world’s population is facing hunger — or between 690 million and 783 million people;
At least $10 trillion are lost in “hidden costs” — due to unhealthy diets, environmental costs, poverty and undernutrition;
More frequent, intense, long-lasting extreme weather events, changing temperature and precipitation are reshaping agricultural production patterns ;
Over one-fifth of total greenhouse gas emissions come from agriculture, forestry, and other land use.
How do policies affecting trade and markets matter?
Markets for food and agriculture remain highly distorted. Current policies incentivise unsustainable production and consumption patterns, especially in the absence of adequate environmental regulations. The Organisation for Economic Cooperation and Development (OECD) has just released new numbers showing the scale of the challenge.
From 2020 to 2022, positive support to individual producers amounted to $630 billion per year on average.
This includes budgetary outlays — but also higher food prices resulting from border measures such as tariffs.
The distortions on food markets are compounded by those in the energy sector. Some WTO members have highlighted the particular importance of fossil fuel subsidies in undermining progress towards environmental goals.
Price spikes affecting people in food-importing countries may be aggravated by unjustified export restrictions.
Consumers on low incomes, and vulnerable countries, are among those shouldering the additional burden of these policies. At the same time in many countries, poor consumers lack adequate safety nets. And governments are underinvesting in the types of support that can boost farm productivity, sustainably, without distorting markets.
Trade negotiations have a key role to play in addressing these shortcomings.
Fairer and more equitable markets would help reduce hunger and malnutrition as well as support the fight against climate change. Let me give you three illustrations of what is at stake and what would be possible here.
First, strengthening food security. This requires maintaining trade flows open and transparent by monitoring trade restrictions — and ensuring that the most vulnerable consumers in particular can access the food they need. It also requires finding the right balance between easing trade and supporting producers’ livelihoods. This is one key issue today for WTO negotiations.
Second, decarbonising the food and agriculture sector. The transition to a low-carbon economy changes the patterns of comparative advantage. As our WTO chief economist likes to put it, countries become encouraged to specialize on what they are “greener at”. WTO negotiations offer a lot of relevant tools. In the food and agriculture sector, repurposing trade distorting support toward pro-climate objectives could release fiscal resources that may help reduce its carbon footprint and optimize the use of natural resources. Energy sector reforms, including facilitating trade in Agri-based alternatives to fossil-based energy and materials, could, under certain conditions, contribute to the same.
Third, fostering access to pro-climate agricultural innovation. By removing distortions, opening markets and promoting convergence of product standards based on international references and sound science, trade policy reform can act as a booster for innovation in climate-smart agriculture and dissemination of related technologies. Strengthening investment in farmer advisory services, rural infrastructure, as well as research can help ensure new and existing techniques to support sustainable productivity growth end up in farmers’ hands.
All this can be done, at various level simultaneously: national, regional, global.
At national level. The “toolkit” that we’ve released (today) on trade policy and climate contains some ideas on how this can happen in a manner compatible with the integrity of the multilateral trading system. Every country can consider and take appropriate action without waiting for others.
At regional level. Many regional trade agreements and dialogues now include substantial sustainability chapters, including some dealing with agricultural standards.
At multilateral level, I am proud to report that the WTO has started rising up to the challenge.
Last year, trade ministers expressed their determination to make progress on sustainable agriculture and food systems, in a landmark WTO declaration on food security. And they committed to take “concrete steps” to improve the functioning of global markets for food and agriculture. The declaration is an important statement of shared purpose.
It formed part of a package of measures which included our Fisheries Subsidies Agreement. The Fisheries Agreement is the first ever WTO agreement motivated primarily by environmental concerns. It’s an important contribution towards a more sustainable food system.
In the same package, trade ministers agreed not to impose expose restrictions on food bought for humanitarian aid by the World Food Programme.
Is this enough? For almost three decades, our rulebook has provided a solid basis for the growth of global trade in food and farm goods. But an update is now long overdue.
For many years now our agricultural negotiations have been deadlocked on some key issues. At the end of February next year, trade ministers will meet — also in the United Arab Emirates — for our thirteenth ministerial conference. They will try to find a way forward on thorny issues around domestic support and the rules governing the food that’s bought at minimum prices for public stocks. Also high on the agenda will be unresolved questions about improving agricultural market access and the impact of food export restrictions on other countries.
Ladies and Gentlemen, for trade policy to meaningfully support sustainable food systems, we need to succeed in revitalising agricultural trade reform at the next WTO ministerial meeting.
The climate community needs to be actively engaged with trade policymakers: please support WTO negotiations so that they can contribute to the sustainable food systems transformation we need.
Thank you for your attention, and I wish you a very productive and fruitful exchange.
Source: wto.org (Collected by Pham Bang Tam)