Trade cooperation is vital in tackling current food insecurity crisis – WTO
The Director-General of the World Trade Oganisation (WTO) Ngozi Okonjo-Iweala has told the Group of 20 (G20) finance ministers in Bali, Indonesia, on on July 15 that cooperation on trade will be vital in tackling the current food insecurity crisis, and the WTO “is determined to be part of the solution.
She stated that new data for the first quarter of 2022 show that global trade flows decreased in value by 2.3 per cent, quarter-on-quarter, and were flat in real terms.
However, she said, export orders “have picked up a bit since June, a leading indicator that may point to stabilization.”
Trade performance varies significantly across regions, with African imports and exports still below pre-pandemic levels while global trade volumes, led by Asia, are at or near record highs, she noted.
Read below her full presentation…
In her virtual intervention at a session on strengthening global collaboration for tackling food insecurity, the Director-General told the gathered ministers and central bank governors that WTO members “took some important steps” at their 12th Ministerial Conference (MC12) in June. These included a decision to exempt from export restrictions food bought by the World Food Programme (WFP) for humanitarian purposes and a declaration to facilitate trade in food, fertilizer and other agricultural inputs.
“WFP chief David Beasley says the legally binding decision will save the agency time and money when procuring food for millions of vulnerable people,” she said, noting WFP estimates that up to 345 million people worldwide are now acutely food insecure or at high risk.
“Ministers also adopted a Declaration pledging to facilitate trade in food, fertilizer and other agricultural inputs,” the DG added. “They stressed the importance of not imposing export restrictions and encouraged members with surplus stocks to release them on international markets.”
The DG warned that, amid intense competition for food and key inputs like fertilizer, “there is a risk that supplies may be diverted away from poorer countries to richer ones, repeating the experience with COVID-19 vaccines. For instance, African countries are already having difficulty accessing adequate quantities of fertilizer.”
The WTO has been closely monitoring trade measures affecting food since the start of the war in Ukraine and encouraging members to keep international markets open for food and agricultural inputs.
WTO monitoring shows that 29 members and observers have introduced 52 measures prohibiting or restricting exports of food, feed and fertilizer. More than a dozen of these measures have since been removed, leaving in place 39 measures from 23 countries, the DG told ministers — still too many, but less numerous than the trade-restrictive measures for medical products introduced during the height of the pandemic.
In the opening session on the current state of the global economy, the Director-General told G20 finance ministers and central bank governors concerned that the MC12 outcomes on export restrictions and the WFP should help ease inflationary pressures on food prices. She highlighted the disinflationary role trade has played in recent decades and cautioned that a retreat from trade could do the reverse.
“Open trade and global value chains have historically been disinflationary, fostering increased competition, specialization and scale,” she noted. “But over the past two years, the pandemic has upended supply chains: factory closures and transport restrictions constrained the supply side, while consumers pivoted from services to durable goods even as fiscal and monetary stimulus boosted aggregate demand. Food and energy prices were rising even before the war.”
The DG warned that the idea promoted by some of global trade “decoupling” would “almost certainly raise rents and consumer prices, while reducing prospects for growth and debt repayment.” Lowering trade barriers is a more promising strategy for curbing inflation, she added.
The DG said new data for the first quarter of 2022 show that global trade flows decreased in value by 2.3 per cent, quarter-on-quarter, and were flat in real terms. However, export orders “have picked up a bit since June, a leading indicator that may point to stabilization.”
Trade performance varies significantly across regions, with African imports and exports still below pre-pandemic levels while global trade volumes, led by Asia, are at or near record highs, she noted.
source: 3news.com
