11/04/07
Multilateral agricultural trade policy reform is expected to stimulate
trade and economic growth, but any new trade rules need to be compatible
with the first Millennium Development Goal, which calls for the proportion
of people suffering from hunger or living in extreme poverty to be
reduced by half by the year 2015, warns the UN Food and Agriculture
Organization (FAO) in its annual report on the State of Agricultural
Commodity Markets 2006 (SOCO2006), issued today.
At a news conference launching SOCO2006 in the Palais des Nations
in Geneva, David Hallam, Chief of FAO's Trade Policy Service, said: “Some
developing countries, assisted by supportive economic structures
natural resource endowments and a commercial orientation are already
highly competitive and successful in exporting agricultural products.
These more advanced and competitive exporting countries are well
placed to reap the benefits of liberalization in the global trading
system.”
According to the FAO report, “many lower-income countries,
especially in sub-Saharan Africa, are less well placed to gain in
the short- to medium run from of trade liberalization that includes
improved access to export markets, or from further opening of their
own markets. The extent to which these poorer countries benefit from
trade liberalization will depend upon their economic structures,
their competitiveness and their capacity to respond to new market
incentives.”
FAO report examines how developing countries can benefit
With the Doha Development round of trade talks now revived, FAO’s
new report takes an in-depth look at the principal elements that
may be needed to alleviate the concerns of developing countries regarding
the role of trade in improving the competitiveness of their agriculture
sectors.
Mr. Hallam said: “Not only will some developing countries
not gain from trade liberalization, in some cases they may be adversely
affected and, not surprisingly, they see this as a threat to their
domestic production and food security.” Reducing tariffs means
increased competition from imported foods for locally produced products,
and domestic production systems that contribute significantly to
food supplies, rural incomes and employment may not be ready to withstand
this challenge.
Rules should recognize food security needs
According to the report, most countries agree on the importance
of reaching an agreement that will lead to a less distorted agricultural
trading environment. Such an agreement is particularly important
for developing countries that depend on exports of agricultural commodities
to support their development and poverty reduction strategies. But
at the same time there is also “broad agreement that the rules
of the international trading system should recognize the food security
and development needs and the priorities of all developing countries.”
Sustainable food security depends on improved productivity in local
food production, and many developing countries will need to have
the flexibility and scope to create a supportive policy environment
to facilitate this, the report says.
Flexibility will be necessary for some countries
“It is clear that many countries will need to be allowed some
flexibility in the implementation of new trade rules, and also to
be given assistance, at least for the short term, while they adjust
to the new market realities arising from trade liberalization,” warned
Mr. Hallam, adding: “In the language of the World Trade Organization,
these countries need significant special and differential treatment.”
The FAO report calls for action to ensure that the potential benefits
from trade reforms are shared by all as equitably as possible. “FAO
is committed to assisting countries to improve their productivity
and the competitiveness of their agricultural commodities,” said
Mr. Hallam. FAO has been offering developing countries policy advice
and training programmes to enable them to better defend their interests
in trade talks.
The new issue of The State of Agricultural Commodity Markets is
intended to raise awareness of the interests that developing countries
have in the Doha Development Round by focusing on market access issues
and the measures needed to ensure that trade policy reform contributes
effectively to the reduction of poverty and food insecurity.
According to Mr. Hallam: “At the end of the day the real measure
of success in the WTO multilateral trade talks will be just how much
they contribute to reducing hunger and poverty in the world.”
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