Geneva – Egypt has initiated a proposal in the World Trade Organisation (WTO) to ban export restrictions on farm products to poor countries that are net food importers. The Group of 20 has also exhorted the upcoming WTO ministerial conference to adopt a specific resolution on export restrictions.
After Egypt’s democratic uprising earlier this year, food security has become a main aim in its quest to achieve social justice. Therefore, Cairo has initiated a proposal at the WTO to ban export restrictions of agricultural products to net food importing developing countries (NFIDC).
Some 77 WTO members are regarded as NFIDCs. They comprise all least developed countries (LDCs) plus another 26 developing countries that rely primarily on the import of agricultural products for food security. The proposal was introduced by the NFIDCs, with the support of the African group and the LDCs group.
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A recent meeting on food price volatility, organised by the Geneva-based global think tank the International Centre for Trade and Sustainable Development (ICTSD), discussed the proposal of banning export restrictions on food to countries with vulnerable populations.
Food producers sometimes limit their food exports in favour of serving domestic consumption needs and to keep local prices low.
According to the Food and Agricultural Organization (FAO), global prices of wheat surged by 60 to 80 percent from Jul. to Sep. 2010 following the export ban by Russia, which is not a WTO member but should become one by the end of 2011.
Export restrictions on foodstuffs were one of the key drivers of the food crisis and price spikes during 2007 – 2011. At the beginning of 2011, 21 countries had imposed export control measures. Recently, Ukraine, Macedonia, Moldova and the Kyrgyz Republic, for example, placed export restrictions on different types of grains.
The WTO does not prohibit such measures, but it tries to curb them. “You cannot deprive very vulnerable countries of sustenance by banning exports of food to them,” Hisham Badr, ambassador of Egypt to the WTO, argued in an interview with IPS – especially, he said, “given the international food crisis, the energy crisis, the economic and financial crisis and the fact that the Doha Round seems to be in intensive care”.
Since Jun. 2010, as a result of price increases, the number of extreme poor people has increased by 44 million in low and middle-income countries.
Concretely, Egypt’s proposal foresees exempting NFIDCs from export restrictions on foodstuffs by both developing and industrialised countries. NFIDCs, however, would still be allowed to use such restrictions for their own food security.
The proposal also foresees the ban of export restrictions on food destined for humanitarian assistance delivered by the World Food Programme (WFP).
Egypt and the African group would like to see this initiative become part and parcel of the proposed “early harvest” of the Doha Round that could be adopted by the WTO ministerial conference in Dec. 2011.
On Jun. 23, the G20 also agreed to remove export restrictions on food destined for non-commercial humanitarian purposes. It also recommended that WTO members adopt a specific resolution on export restrictions at this year’s ministerial conference.
But, given the difficulties of the Doha negotiations, what are the chances of adding export restrictions to the controversial early harvest that some countries contest even for LDCs?
“Many countries sympathise with this initiative from different angles,” Badr replied.
However, according to Bridges Weekly, an ICTSD publication, major agricultural exporters like the U.S., Australia and Brazil would like export restrictions to be seen in the context of other trade distortions in agriculture. They don’t see why it should be singled out while there are large aspects of the Doha Round that are meant to redress those imbalances.
Developed countries like Switzerland and Japan, net food importers themselves, expressed support for the proposal. The Philippines, which doesn’t belong to the NFIDC but whose population has been affected by export restrictions, suggested that the proposal should include non-NFIDC too.
“Our endeavour is part of a greater strategy,” Badr continued. “The Dominican Republic and Egypt will propose another initiative at the WTO General Assembly in Sep. 2011 on food price speculation. And we work closely with FAO on an agriculture market information system to exchange information and effectively address price volatility.”
But he acknowledged that, given the state of the Doha Round, some members are not giving due consideration to the initiative. “We have not had yet countries that are against it. They have rather adopted a position of ‘wait and see’.”
Jonathan Hepburn, agriculture programme manager at ICTSD, told IPS that, “it is an interesting initiative, We have to see where it goes, but clearly export restrictions imposed in the last few years have had an impact on markets and price volatility.
“When markets are already tight, such measures risk worsening supply, especially when the country that adopts it is a major exporter.”
He indicated that WTO members are trying to address export restrictions in different ways. It could be in an “early harvest” of the Doha Round or, alternatively, be a separate decision outside the Doha package.