Trade Policy Issues in Asia - Ramesh Sharma

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  • Trade Policy Issues in Asia - Ramesh Sharma

    1. 1. Perspectives on the challenges for food security in Asia Trade Policy Ramesh Sharma FAO Regional Office, Bangkok IFPRI-CDRI Workshop on Agricultural Transformation in Asia: Policy Options for Food and Nutrition Security 25-27 September 2013 Siem Reap, Cambodia
    2. 2. Outline 1. Landscape of trade policy/interventions in Asia 2. Different views on trade interventions
    3. 3. Part 1 Landscape of trade policy interventions - import policy - export restrictions - export subsidization - domestic subsidies
    4. 4. Trade policy landscape - (1) - illustration of interventions on imports  AoA Annex 5 Special Treatment (Rice - PHL, KOR, TWN/CHN – JPN no more)  Prohibitive tariff (JPN rice, THA sugar in-quota)  Lots of TRQs (JPN rice, THA sugar, maize, CHN several)  Pure quota, non-automatic license (IDN liv/hort/rice)  Reference prices – PHL pork, poultry  STE monopoly/licensing – (MYS rice, many countries)  Allegation of exceeding WTO bound tariffs (SLK dairy, many other cases)
    5. 5. Trade policy landscape (2) – illustration of export restrictions  Export taxation (ad valorem, specific, mixed – many cases)  Variable and differential taxation – (palm oil IDN & MYS)  Minimum Export Price (MEP) (VNM rice, basmati IND, PAK earlier)  Export quota (IND frequent - cotton, rice, wheat, others)  Cartelling? (natural rubber THA, MYS, IDN)  Complete ban – (IND rice, wheat 2008-11, BGD rice)
    6. 6. Trade policy landscape (3) – illustration of export subsidization (mostly WTO-compatible for DCs, AoA Art. 9.1d & e)  IND rice & wheat export during 2001-03  Possibly also IND wheat X 2012/13 (not clear rice)  Closely watched for a similar case for Thai rice exports (also watched - all G2G deals)  Export incentives – many products, many countries (IND many products, cash incentives NPL & BGD, also PAK, many other developing countries)  Cross-subsidization issue raised many times at WTO CoA
    7. 7. Trade policy landscape (4) – domestic subsidies (illustration of questions asked at the WTO CoA)  Public stockholding for food security – rice, wheat (IND, IDN, PHL)  Article 6.2 subsidies, e.g. fertilizers (IND, IDN) definition of low-income resource-poor farmers (LIRP)  Decoupled income support (CHN) (Thai rice PPP)?  Trade-distorting subsidy (AMS) (rice - THA, CHN, & IDN for notifying only once in 2000, IND for not notifying after 2003)
    8. 8. Part 2: On the connection between trade intervention and food security -- Different views
    9. 9. One view e.g. the messages in the World Bank distortions study  
    10. 10. One view – distortions are bad for growth and poverty reduction ... avoid  Protection of importables: • misallocates economic resources (Econ 101) • taxes exports (Lerner Symmetry)  So, the way ahead (for growth, food security etc) is full export-orientation of trade policy, not protection  Instead, use domestic interventions for domestic problems  Thus, exemptions like sensitive products, special products, SSM, negative list etc not desirable  So, in a way, “Make trade policy history”
    11. 11. Alternative view – trade/pricing policies have a positive role to play (for growth and other goals)  Market failures etc mean interventions are desirable (even trade theory supports)  Cant trust “thin” world food markets (e.g. rice)  Rice price policy in Asia played a positive role in structural transformation (e.g. Timmer)  So, interventions are ok if linked to stage of structural transformation  In WTO/AoA also - “reform with policy space” is the mantra  etc etc
    12. 12. Articulating appropriate trade/ pricing policy - the “Middle Way”  Avoid large distortions (e.g. protection>10%)  Be clear/explicit on policy goal aimed at: o (e.g. food self-sufficiency, fully aware that this is NOT household food security)  Find solutions with fewer interventions (e.g. with 2 instruments, not 7  more rules-based, less ad hoc  Some national problems have global solution only – so negotiate hard at the WTO (e.g. export restrictions, domestic subsidies etc)

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