WTO head calls for common vision on agricultural trade policy

World Trade Organisation (WTO) DG Pascal Lamy has urged members to agree on a common vision for agricultural trade policy.

However, he did maintain that the progress made, to date, has been important, despite the absence of a shared vision on agricultural trade policy.

“Agricultural trade policy has ‘stumbled’ along quite nicely in the past two decades,” he said in a copy of a speech, delivered at an International Food and Agricultural Trade Policy Council meeting in Salzburg, Austria.

“We have only ‘stumbled’ along. We have not taken strong, collective and decisive action. The reason being that until today, the world does not have a shared vision of what global integration should look like and what it can deliver in agriculture,” Lamy added.

International trade in agriculture was said to be less than 10% of world trade. Whereas 50% of the world's production of industrial goods entered international trade, Lamy said it was important to know that only 25% of the world's food production was traded globally. In addition, of that 25%, the majority was processed food, and not rice, wheat, and soya.

“To suggest that less trade, and greater self-sufficiency, are the solutions to food security, would be to argue that trade was itself to blame for the crisis. A proposition that would be difficult to sustain in light of the figures I just gave you,” Lamy argued.

Lamy noted that between 2000 and 2007, the agricultural exports of developing countries to the developed world grew by 11% a year - faster than the 9% growth in trade flows in the opposite direction.

“This means that we are finally beginning to redress historical imbalances, and to level the international trade playing field. The developing world's international competitiveness in agriculture is becoming an undeniable reality,” he stated.

Lamy emphasised that food and agricultural trade policy did not operate in a vacuum, and if domestic policies did not themselves incentivize agriculture, and internalise negative social and environmental externalities, then there would always be a problem.

The policy mix at the national level, therefore, must be the starting point for any discussion of food and agricultural policy, he said.

Land management, natural resource management, water availability, property rights, enforcement, storage, transportation and distribution infrastructure, credit systems, and science and technology, formed part of this agriculture and food security puzzle.

“Trade policy — no doubt — has its place in this landscape. But it cannot and does not, by itself, answer each and every challenge in agriculture.”

At the end of the day, he said, trade was no more than a simple transmission belt between supply and demand. “It has to work smoothly, with little friction, but it is simply one element of a much more complex machinery.”

Lamy also stated that the world would have to act together, and responsibly, in addressing what has become one of the world's most serious environmental challenges: climate change.

“The droughts and other turbulences that climate change may lead to leave me convinced that international trade will be an even greater must in the future. While agriculture accounts for some 14% of total anthropogenic greenhouse gas emissions, in some countries it represents about half of all emissions, such as in New Zealand, Australia or Argentina,” he said.