The E15 Intiative Strengthening the Multilateral Trading System

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Presentation by Stefan Tangermann (Professor Emeritus, University of Gottingen, Germany) IFPRI Policy Seminar: "A Post-Bali Food Security Agenda," May 6, 2104 in Washington, DC.

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The E15 Intiative Strengthening the Multilateral Trading System

  1. 1. 2 IPC New challenges: Markets • food markets: from demand constrained to supply constrained • rapid expansion of bioenergy • dramatic price volatility • growing market share of developing countries • climate change impacts on food production Share of non-LDC developing countries in world trade 0 100 200 300 400 500 600 700 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 US$/ton Wheat price in international trade, in 2005 prices
  2. 2. 3 IPC New challenges: Policies • changes in agricultural policy regimes • growing interest in policies addressing climate change and environment • experiences with implementing AoA • spread of RTAs -20 -15 -10 -5 0 5 10 15 20 %points change PSE Change 1995-97 to 2010-12
  3. 3. 4 IPC Implications for priorities • Growing scarcity requires well functioning markets, progress in Doha Round urgently needed • Attention needed to burden on food consumers (in addition to constraining producer support in WTO) • Improving food security in poor countries ... demonstrates to developing countries what trade regime can do for them (DDA) • Report suggests action, for shorter and longer term
  4. 4. 5 IPC Policy Action Proposed (1) Export restrictions • more transparency, consultations • procedure to identify legitimate reasons to restrict exports “to prevent or relieve critical shortages of foodstuffs” • food aid for countries in emergency exempted from export restrictions • constraints on export taxes
  5. 5. 6 IPC Policy Action Proposed (2) Biofuels • Rules for reporting support to production and consumption of biofuels • Constraints on biofuel support levels Green Box • emphasise policies not distorting production/trade • focus on public goods • eligibility only after notification, with detail
  6. 6. 7 IPC Policy Action Proposed (3) International co-operation and assistance • improve market transparency • small, targeted emergency reserves • social safety nets • improve productivity in agriculture, infrastructure • assistance to agriculture must not decline again 0% 5% 10% 15% 20% 25% 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Share of agriculture, forestry, fisheries in total ODA
  7. 7. 8 IPC Policy Action Proposed (4) A new instrument of financial solidarity between – support for farmers in well-off countries, and – measures to improve food security in poor countries • developed and emerging countries contribute relative to their farm support: yardstick could be overall trade-distorting support (OTDS) [for info: 1% of OTDS ≈ US$ 2 billion ≈ ¼ of ODA to agriculture] • funds are used to improve food security in countries meeting agreed quantifiable criteria
  8. 8. 9 IPC Conclusions • World agriculture and food system faces new challenges • Improving food security is crucial • Importance of Doha negotiations on agriculture has become even more obvious • There are several policy actions that can respond to the new challenges ... and demonstrate to developing countries what the trade regime can do for them

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