The trade and economic fallout of the pandemic in Latin America and the Caribbean will occupy center stage at the next WTO conference
San Jose, 15 November 2021 (IICA) – A context of uncertainty and the failure to make significant advancements on issues that are important to the agenda of the World Trade Organization (WTO) have set the climate prior to this year’s 12th Ministerial Conference (MC12) of the governing body of global trade, according to a publication by the Inter-American Institute for Cooperation on Agriculture (IICA) and the International Food Policy Research Institute (IFPRI).
The joint publication, , argues that geopolitical changes and the COVID-19 pandemic have drastically impacted the institutional priorities of countries and of the WTO itself. Moreover, the global economy has deteriorated substantially over the last two years, suffering structural impact and affecting areas such as trade and food security, particularly in Latin America and the Caribbean.
Also participating in the preparation of the study were the Institute for International Agricultural Negotiations (INAI), the Group of Producing Countries of the Southern Cone (GPS), the Buenos Aires Grain Exchange, the FAO and various researchers from the region.
The publication was launched at an event that included the participation of Gloria Abraham, Costa Rican Ambassador to the WTO and chair of the organization’s agricultural negotiations. The WTO was also represented by Anabel González, Deputy Director-General, and Edwini Kessie, Director of the Agricultural and Commodities Division and Chief of the Delivery Unit.
Other participants in the launch were David Laborde, Senior Research Fellow in IFRPI’s Markets, Trade and Institutions Division; and Manuel Otero, Director General of IICA.
The document proposes key ideas on issues to be addressed in MC12 – the highest decision-making body of the multilateral trade system. The Conference will take place on 30 November to 3 December in Geneva, Switzerland.
According to Gloria Abraham, the repercussions on trade as a result of different situations across the globe is evident. She remarked that, “There has been a notable increase in food prices and the congestion in some ports around the world is becoming the subject of attention. This has increased the transportation costs of products and evidently will impact the pockets of consumers”.
“Given this unprecedented tension”, cautioned Anabel Gónzalez, “the road to recovery will continue to be a bumpy and uncertain”. Many risks and dangers loom large, the most immediate one being unequal access to vaccines. Added to that, there is a scarcity of microchips, congestion on the ports, rising transportation costs, intensifying climate change phenomena and mushrooming poverty and inequality. All of this is limiting the capacity of trade to support the recovery”.
IFPRI’s David Laborde feels that agricultural trade has been very resilient during the pandemic and has continued functioning thanks to the drive of the sector and policy-makers.
He remarked that, “(Decision-makers) tried to facilitate the process, as they understood that these areas are critical for food security. Some countries are already on the correct path; there were restrictions, but these were quickly removed and limited in their scope”.
On the other hand, Edwini Kessie, Director of the Agricultural and Commodities Division of the WTO stated that, “Member countries of the organization want to see results in three main areas: agriculture and fisheries, as well as trade and health. The Ministerial Conference offers us a great opportunity to create a vital and dynamic trade system.
Among other aspects, the IICA and IFPRI publication emphasizes that since the last Ministerial Conference in 2007, the multilateral trade system and its main organization, the WTO, have been attacked and discredited. Thus, moving towards a coordinated solution to the world’s major problems through multilateral cooperation seems unlikely.
Another issue analyzed in the document was the response of various countries to the impact of the situation on international trade and agriculture. Many nations have reviewed their trade policies to tailor them to different scenarios with respect to food security and agricultural trade flows.
Increased prices for raw materials and the fear of food shortages has prompted some governments to impose restrictive measures that limit or tax agricultural exports.
Other measures adopted included direct market intervention through public stockholding, special safeguard mechanisms and state trading enterprises.
The adoption of these measures has triggered new debates about their effectiveness in reducing food insecurity and prompting the development of fair and transparent food markets.
The publication assesses different alternatives to resolve potential obstacles in international markets and agricultural trade. The aim is to provide valuable and useful input to arrive at successful agreements, while also fostering a fair and efficient global food system and more transparent international trade.
This publication, which was born of a joint effort between IICA, IFRPI and researchers from the region, is being released at a very special moment, following on the heels of the 2021 UN Food Systems Summit”, remarked Manuel Otero, Director General of IICA. “It will underscore the importance of international trade in the functioning of agrifood systems”.
Moreover, he said that, “Agrifood trade—particularly from the perspective of Latin American and Caribbean countries—plays a strategic role in global food security, above all, when we consider the pandemic”.
The analysts state in the document that regulations such as sustainability standards, access restrictions and domestic support measures must be transparent and aligned with the principles of the WTO to avoid discretional application and discriminatory practices.
They also argue that information transparency is key to accessing and developing new markets, particularly under the glare of increasing environmental scrutiny. Moreover, effective market access is fundamental, not only for the development of agro-exporting countries (that prioritize this issue in their developmental agendas), but also for importing countries, as a means of guaranteeing food security and connecting major suppliers to buyers in regions experiencing food shortages.
Finally, the authors surmise that the growth strategy of countries in Latin America and the Caribbean may be affected by what happens at the WTO. Therefore, contributing actively to its modernization and prioritizing its success as part of the region’s trade and external policies is of crucial importance.
Institutional and Communication Division