Giovanni Anania - ictsd.org. Anania - Climate...[ G. Anania, Climate change, food 11 security, agricultural export restrictions and the WTO, Bonn, June 2014 ] export restrictions and

[ G. Anania, Climate change, food security, agricultural export restrictions and the WTO, Bonn, 11 June 2014 ]

Giovanni Anania University of Calabria, Italy

Climate change, food security and

agricultural export restrictions:

towards a more coherent WTO

regulatory framework?

ICTSD Trade and Climate Change Day

Session III: Climate Change, Agricultural Trade and Food Security:

Towards a more Coherent Policy Framework?

Bonn, 11 June 2014


export restrictions and food security

countries do intervene to restrict exports

when international prices rapidly increase, for any

country with a significant share of food insecure

population intervening to contain the increase of

domestic prices, or to limit the effects on the poor,

is a necessity

restricting exports is one of the options

by restricting its exports a country makes prices in

other countries increase further (beggar-thy-

neighbor effect) and stimulates a domino effect

involving both importers and other exporters

(‘prisoner’s dilemma’ trap)

food security in exporting countries is pursued at

the expense of food security of the poor elsewhere 2 / 19


the recent international price ‘spikes’: wheat

3 / 19


the recent international price ‘spikes’: rice

4 / 19


export restrictions and international price ‘spikes’

in 2007/08 and 2010/11countries reacted to the

price ‘spikes’ in different ways

many exporters introduced export restrictions

export restrictions proved effective in reducing

upward variability of domestic prices

…and, symmetrically, they also made prices for

cereals increase significantly more in other

countries, exacerbating the impact of the crisis on

their food insecure

however, in the case of rice in 2007 export

restrictions were themselves a major cause of the

price ‘spike’

5 / 19


export restrictions and international price ‘spikes’

many studies assessed empirically the market and

food security effects of the export restrictions

introduced in 2007/08 and 2010/11, using a variety

of simulation models, and all concluded these

effects were substantial

[Anderson, 2012; Anderson, Ivanic and Martin, 2013; Boüet

and Laborde, 2010; Headey, 2011; Labord, Estrades and

Boüet, 2013; Martin and Anderson, 2012; Rutten et al.,

2013; Tanaka and Hosoe, 2011; Thomson and Tallard, 2010]

6 / 19


climate change, export restrictions and food security

changes in the mean and variability of temperature,

precipitation and availability of daylight will directly

and indirectly affect agricultural production, with

effects which will be highly differentiated by regions

and products

we will observe

increased volatility in production and, as a

result, in prices, and

a much more frequent realization of ‘extreme’

market events

in the case of ‘extreme’ events, exporters restricting

their exports to reduce the impact on the food

security of the poor at home will exacerbate the

negative effect on the poor in importing countries 7 / 19


export restrictions and the WTO

export restrictions are an area of ‘evident under-

regulation’, or ‘regulatory deficiency’ in WTO

export taxes are left unrestricted

other export restricting policy instruments are

forbidden, but for exceptional cases, including

when ‘temporarily applied to prevent or relieve

critical shortages of foodstuff or other products

essential to the exporting contracting party’

WTO rules on export restrictions are weak and do

not constrain country policy decisions

a clear asymmetry exists with respect to WTO

regulation of import restrictions

stricter disciplines imposed on new members 8 / 19


export restrictions and WTO negotiations so far

introducing stricter WTO disciplines for export

restrictions on foodstuff in order to limit their

negative impact on food security has been a widely

debated issue since the UR agreement in 1994,

…but with no tangible result whatsoever

export restrictions were not mentioned in the

negotiations ‘mandate’ in the Doha declaration

the latest draft of the ‘modalities’ on agriculture (Dec

2008) leaves export taxes unregulated and only

marginally modifies notification & consultation

procedures for other export restrictions

attempts to make the 2011 Ministerial prohibit export

restrictions at least on food purchased for

humanitarian purposes by the WFP failed 9 / 19


why more stringent WTO rules on export restrictions?

to avoid them exacerbating the negative effects on

the food security of many of the poor in the event

of a rapid increase of international prices

to restore importers confidence in the market as a

reliable source of food at all times

to avoid importing and exporting countries’ policy

reactions falling in a ‘prisoner’s dilemma’ trap

to eliminate discrepancy of ‘WTO+’ rules on export

restrictions imposed on newly acceded countries

to reduce the asymmetry between regulations of

import and export restrictions

10 / 19


a) exempting from the imposition of export

restrictions and extraordinary export taxes food

purchased by international organizations to be

distributed on a non-commercial basis for

humanitarian purposes

would avoid an additional cost on the purchase of

food aid when this is needed the most

benefits would be significant, costs for the exporters

marginal

wide convergence emerged at 2009 FAO WFS and at

the 2011 G20 meeting

it has been considered in preparation of the 2011

Ministerial, but eventually no consensus materialized

options for an agreement (with different levels of ambition)

11 / 19


b) improving the enforceability of existing WTO

disciplines by clarifying some of the terms used,

adopting a transparent, unambiguous language,

and by making the notification and

implementation procedure more stringent and

effective

current disciplines would be left unchanged

conditions under which export restrictions can be

used (Article XII:2a of GATT 1994) clarified

implementation procedure (Article 12 of the AoA)

strengthened

a significant step forward


12 / 19


c) imposing stricter disciplines for export

restrictions as well as export taxes

all export restricting policies would be prohibited

exceptional circumstances would be defined under

which the prohibition would not apply, in terms of

countries, staple food products and trigger

mechanism

countries: from all DC and LDC, to LDC only

trigger mechanism should include both a trigger

activated by a significant increase in the domestic

price, and one activated by a significant increase in

exports (consistent with SSP in the AoA or SSM, if

agreed)


13 / 19


d) full ‘symmetry’ in regulating import and export

restrictions

‘taxification’ of all existing export restrictions other

than export taxes

reduction of export taxes, both, the existing ones and

those resulting from the ‘taxification’

binding of all export taxes

a Special Safeguard Clause for products for which

export restrictions different from a tax existed

…


14 / 19


what are the prospects for an agreement?

a WTO agreement on export restrictions could, at

least in principle, occur under three alternative

scenarios: a ‘single undertaking’ (as part of the

agreement concluding the Doha Round), an ‘early

harvest’ (as part of an agreement on a limited

number of issues, reached on the side of Doha

Round negotiations) or a ‘stand alone’ scenario

(an agreement on export restrictions only)

15 / 19


a ‘single undertaking’ agreement

Doha round negotiations have been on hold since July

2008 and were officially declared at an ‘impasse’ in 2011

will the ‘work programme’ to be defined by the end of

the year bring the Round to a conclusion?

if the Doha Round will be concluded and importing

countries will have to lower further their border

protection, then exporters will have to give up some of

their (currently unrestricted) right to limit their exports

if an agreement is reached to end the Doha Round

this would likely include stricter disciplines for

export restrictions, likely with a relatively high

level of ambition, such as options (c) or (d)


16 / 19


an ‘early harvest’ agreement

for export restrictions to be part of an ‘early harvest’

agreement they have to be among the top negotiation

priorities for at least some of the countries, and

currently they are not

in addition, regardless of export restrictions, the

probability of countries being able to identify another

limited set of issues such that the new disciplines make

all of them better off with respect to no agreement is

probably not high

if another ‘early harvest’ agreement is reached this

will likely either not include stricter disciplines for

export restrictions, or will include disciplines with

a relatively low level of ambition, such as (a) or (b)


17 / 19


a ‘stand alone’ agreement

it did not happen at the 2011 Ministerial, for several

reasons

…but this does not mean it could not happen in the

future

will exporters agree to give up some of their ability to

limit exports without obtaining anything in exchange?

if a ‘stand alone’ agreement is reached the

ambition of the new disciplines would very

likely be extremely low, such as in (a) or (b)


18 / 19


are there alternatives to a WTO agreement, i.e. an

agreement within a different institutional

framework (such as FAO, the G20, or ICAs)?

No.

the agreement needs to be found in the WTO!

being the food security of many of the poor at

stake, and because the expected changes in the

climate will make price spikes more frequent,

there is clearly an urgent need for a multilateral

agreement introducing WTO disciplines for export

restrictions


19 / 19


Thank you!

Documents

Giovanni Anania - ictsd.org. Anania - Climate...[ G. Anania, Climate change, food 11 security, agricultural export restrictions and the WTO, Bonn, June 2014 ] export restrictions and