Why governments need to transform trade too
As world leaders approve a bold new agenda on sustainable development, they could show they’re serious about a promise to end hunger by making global food and farm trade fairer for current and future generations. Governments are due to agree a landmark 2030 target for ending hunger and malnutrition at the UN in New York, a highlight of the ambitious new set of Sustainable Development Goals. However, they will now have to move quickly to turn these promises into action—including in the contentious area of global rules on trade.
The leaders’ declaration spells out how ending hunger will need to be part of an integrated agenda aimed at helping the world become more peaceful, just and equitable—and clarifies that trade is a means to achieve these goals, not an end in itself. At the same time, commitments on topics from fossil fuel subsidy reforms through to social protection systems and employment are likely to have far-reaching consequences for food and agricultural markets, and for global rules that govern them.
The new goals recognise the critical importance of improving the sustainability of food production systems, including by strengthening countries’ capacity to adapt to climate change. Although production shocks due to extreme weather events such as droughts and floods are becoming more frequent, global trade rules still allow major exporting countries considerable freedom to ban or tax farm exports, leaving poor consumers in food-importing countries vulnerable to food price spikes on global markets.
Today, almost 800 million people are still chronically undernourished, many of whom live in rural areas. The global trading system could be improved so governments can do what the new goals say is needed to improve farm productivity and raise rural incomes: improving access to markets, enabling people to add more value to farm goods, and creating decent jobs both on and off the farm.
Farmers in poor countries not only struggle with low levels of investment in farming at home: they also have to face stiff competition from subsidised production in wealthier countries. In addition to being inequitable, these support payments also incentivise and maintain unsustainable production and consumption patterns—a problem which the new goals seek to combat.
Barriers such as tariffs continue to prevent otherwise-competitive farmers in poor countries from accessing markets elsewhere, especially for processed products. Negotiations under the World Trade Organisation’s long-running Doha Round have sought to reduce these barriers, but have run into resistance from governments that are reluctant to cut protection on “sensitive” goods such as beef, rice and sugar.
A major problem is that global rules on farm trade have not been updated for over two decades—while a growing web of bilateral and regional accords have sprung up in the meantime. As major economies race to strike deals with their trading partners, many of the world’s poorest and most food-insecure countries are being left on the sidelines.
Governments will need to devote significant financial resources in order to deliver on many of the sustainable development goals. From this perspective, better rules on farm trade are “low-hanging fruits” as they require no financial outlay from cash-strapped governments.
Trade ministers will have an opportunity to make progress on global rules when they meet in Nairobi for the World Trade Organisation’s first ministerial conference in Africa this December. At present, however, the bold ambition of the sustainable development goals contrasts starkly with negotiators’ efforts to steadily lower the ambition of talks on trade.
The G20 group of major economies could send an important signal when their trade ministers meet in Istanbul on October 5, by spelling out how the Nairobi ministerial will contribute towards progress in achieving the Doha mandate for reforming global rules on trade in agriculture. Doing so would be an important step towards ensuring that governments establish a durable basis for achieving the new UN goals on nutrition and agriculture, and delivering on the transformative vision of the sustainable development agenda.
By Jonathan Hepburn & Christophe Bellmann
Jonathan Hepburn is Agriculture Programme Manager and Christophe Bellmann is Senior Resident Research Associate at the International Centre for Trade and Sustainable Development, based in Geneva, Switzerland