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[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
Giovanni Anania University of Calabria, Italy
Climate change, food security and
agricultural export restrictions:
towards a more coherent WTO
regulatory framework?
ICTSD Trade and Climate Change Day
Session III: Climate Change, Agricultural Trade and Food Security:
Towards a more Coherent Policy Framework?
Bonn, 11 June 2014
[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
export restrictions and food security
countries do intervene to restrict exports
when international prices rapidly increase, for any
country with a significant share of food insecure
population intervening to contain the increase of
domestic prices, or to limit the effects on the poor,
is a necessity
restricting exports is one of the options
by restricting its exports a country makes prices in
other countries increase further (beggar-thy-
neighbor effect) and stimulates a domino effect
involving both importers and other exporters
(‘prisoner’s dilemma’ trap)
food security in exporting countries is pursued at
the expense of food security of the poor elsewhere 2 / 19
[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
the recent international price ‘spikes’: wheat
3 / 19
[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
the recent international price ‘spikes’: rice
4 / 19
[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
export restrictions and international price ‘spikes’
in 2007/08 and 2010/11countries reacted to the
price ‘spikes’ in different ways
many exporters introduced export restrictions
export restrictions proved effective in reducing
upward variability of domestic prices
…and, symmetrically, they also made prices for
cereals increase significantly more in other
countries, exacerbating the impact of the crisis on
their food insecure
however, in the case of rice in 2007 export
restrictions were themselves a major cause of the
price ‘spike’
5 / 19
[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
export restrictions and international price ‘spikes’
many studies assessed empirically the market and
food security effects of the export restrictions
introduced in 2007/08 and 2010/11, using a variety
of simulation models, and all concluded these
effects were substantial
[Anderson, 2012; Anderson, Ivanic and Martin, 2013; Boüet
and Laborde, 2010; Headey, 2011; Labord, Estrades and
Boüet, 2013; Martin and Anderson, 2012; Rutten et al.,
2013; Tanaka and Hosoe, 2011; Thomson and Tallard, 2010]
6 / 19
[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
climate change, export restrictions and food security
changes in the mean and variability of temperature,
precipitation and availability of daylight will directly
and indirectly affect agricultural production, with
effects which will be highly differentiated by regions
and products
we will observe
increased volatility in production and, as a
result, in prices, and
a much more frequent realization of ‘extreme’
market events
in the case of ‘extreme’ events, exporters restricting
their exports to reduce the impact on the food
security of the poor at home will exacerbate the
negative effect on the poor in importing countries 7 / 19
[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
export restrictions and the WTO
export restrictions are an area of ‘evident under-
regulation’, or ‘regulatory deficiency’ in WTO
export taxes are left unrestricted
other export restricting policy instruments are
forbidden, but for exceptional cases, including
when ‘temporarily applied to prevent or relieve
critical shortages of foodstuff or other products
essential to the exporting contracting party’
WTO rules on export restrictions are weak and do
not constrain country policy decisions
a clear asymmetry exists with respect to WTO
regulation of import restrictions
stricter disciplines imposed on new members 8 / 19
[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
export restrictions and WTO negotiations so far
introducing stricter WTO disciplines for export
restrictions on foodstuff in order to limit their
negative impact on food security has been a widely
debated issue since the UR agreement in 1994,
…but with no tangible result whatsoever
export restrictions were not mentioned in the
negotiations ‘mandate’ in the Doha declaration
the latest draft of the ‘modalities’ on agriculture (Dec
2008) leaves export taxes unregulated and only
marginally modifies notification & consultation
procedures for other export restrictions
attempts to make the 2011 Ministerial prohibit export
restrictions at least on food purchased for
humanitarian purposes by the WFP failed 9 / 19
[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
why more stringent WTO rules on export restrictions?
to avoid them exacerbating the negative effects on
the food security of many of the poor in the event
of a rapid increase of international prices
to restore importers confidence in the market as a
reliable source of food at all times
to avoid importing and exporting countries’ policy
reactions falling in a ‘prisoner’s dilemma’ trap
to eliminate discrepancy of ‘WTO+’ rules on export
restrictions imposed on newly acceded countries
to reduce the asymmetry between regulations of
import and export restrictions
10 / 19
[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
a) exempting from the imposition of export
restrictions and extraordinary export taxes food
purchased by international organizations to be
distributed on a non-commercial basis for
humanitarian purposes
would avoid an additional cost on the purchase of
food aid when this is needed the most
benefits would be significant, costs for the exporters
marginal
wide convergence emerged at 2009 FAO WFS and at
the 2011 G20 meeting
it has been considered in preparation of the 2011
Ministerial, but eventually no consensus materialized
options for an agreement (with different levels of ambition)
11 / 19
[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
b) improving the enforceability of existing WTO
disciplines by clarifying some of the terms used,
adopting a transparent, unambiguous language,
and by making the notification and
implementation procedure more stringent and
effective
current disciplines would be left unchanged
conditions under which export restrictions can be
used (Article XII:2a of GATT 1994) clarified
implementation procedure (Article 12 of the AoA)
strengthened
a significant step forward
options for an agreement (with different levels of ambition)
12 / 19
[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
c) imposing stricter disciplines for export
restrictions as well as export taxes
all export restricting policies would be prohibited
exceptional circumstances would be defined under
which the prohibition would not apply, in terms of
countries, staple food products and trigger
mechanism
countries: from all DC and LDC, to LDC only
trigger mechanism should include both a trigger
activated by a significant increase in the domestic
price, and one activated by a significant increase in
exports (consistent with SSP in the AoA or SSM, if
agreed)
options for an agreement (with different levels of ambition)
13 / 19
[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
d) full ‘symmetry’ in regulating import and export
restrictions
‘taxification’ of all existing export restrictions other
than export taxes
reduction of export taxes, both, the existing ones and
those resulting from the ‘taxification’
binding of all export taxes
a Special Safeguard Clause for products for which
export restrictions different from a tax existed
…
options for an agreement (with different levels of ambition)
14 / 19
[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
what are the prospects for an agreement?
a WTO agreement on export restrictions could, at
least in principle, occur under three alternative
scenarios: a ‘single undertaking’ (as part of the
agreement concluding the Doha Round), an ‘early
harvest’ (as part of an agreement on a limited
number of issues, reached on the side of Doha
Round negotiations) or a ‘stand alone’ scenario
(an agreement on export restrictions only)
15 / 19
[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
a ‘single undertaking’ agreement
Doha round negotiations have been on hold since July
2008 and were officially declared at an ‘impasse’ in 2011
will the ‘work programme’ to be defined by the end of
the year bring the Round to a conclusion?
if the Doha Round will be concluded and importing
countries will have to lower further their border
protection, then exporters will have to give up some of
their (currently unrestricted) right to limit their exports
if an agreement is reached to end the Doha Round
this would likely include stricter disciplines for
export restrictions, likely with a relatively high
level of ambition, such as options (c) or (d)
what are the prospects for an agreement?
16 / 19
[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
an ‘early harvest’ agreement
for export restrictions to be part of an ‘early harvest’
agreement they have to be among the top negotiation
priorities for at least some of the countries, and
currently they are not
in addition, regardless of export restrictions, the
probability of countries being able to identify another
limited set of issues such that the new disciplines make
all of them better off with respect to no agreement is
probably not high
if another ‘early harvest’ agreement is reached this
will likely either not include stricter disciplines for
export restrictions, or will include disciplines with
a relatively low level of ambition, such as (a) or (b)
what are the prospects for an agreement?
17 / 19
[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
a ‘stand alone’ agreement
it did not happen at the 2011 Ministerial, for several
reasons
…but this does not mean it could not happen in the
future
will exporters agree to give up some of their ability to
limit exports without obtaining anything in exchange?
if a ‘stand alone’ agreement is reached the
ambition of the new disciplines would very
likely be extremely low, such as in (a) or (b)
what are the prospects for an agreement?
18 / 19
[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
are there alternatives to a WTO agreement, i.e. an
agreement within a different institutional
framework (such as FAO, the G20, or ICAs)?
No.
the agreement needs to be found in the WTO!
being the food security of many of the poor at
stake, and because the expected changes in the
climate will make price spikes more frequent,
there is clearly an urgent need for a multilateral
agreement introducing WTO disciplines for export
restrictions
what are the prospects for an agreement?
19 / 19
[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]
Thank you!