Trade Rules & Global Food Crisis - idra.it · Matias Margulis – WTO & Global Food Crisis McMaster University Abstract In discussions of the causes of and responses to the global

The Global Food Security Crisis and Multilateral Cooperation: Can International Trade Rules Help?*

Paper presented to the GARNET Annual Conference, November 11-13, 2009Matias E. Margulis (PhD Candidate)

Graduate Research Scholar, Institute on Globalization and the Human Condition& Department of Political Science, McMaster University

Hamilton, Ontario, Canada L8S 4M4Email: [email protected]

Phone: (905) 525-9140 ext. 24741Fax: (905) 527-3071

*Please do not cite or distribute without the author’s permission. This version is a working draft. Please send comments directly to [email protected]. This research was made possible with support from the Canada Research Chair on Globalization and Public and Policy and the Department of Political Science, McMaster University.

mailto:[email protected]

mailto:[email protected]

Matias Margulis – WTO & Global Food Crisis McMaster University

Abstract

In discussions of the causes of and responses to the global food crisis, the impact of international trade rules has received little scholarly attention. This represents a significant omission given the major role that the World Trade Organization (WTO) plays in structuring the patterns of world food production and distribution, serves as the principle governing mechanism of the world food system, and influential role it plays in the UN system-led response to the food crisis. While conventional economic wisdom suggests reducing Northern farm subsidies would benefit Southern farmers, whether this will make a significant positive contribution to food security is highly uncertain. This paper moves beyond the narrow and hypothetical subsidy debate and in turn analyzes several existing and proposed WTO mechanisms which are relevant to addressing the global food crisis. I argue that existing international trade rules – as well as future rules embodied in the current deal on the table as part of the WTO Doha Development Agenda – are unlikely to ensure a pro-food security outcome to the food crisis response.

Keywords:

Global Food Crisis, World Trade Organization (WTO), United Nations (UN), Food Security, International Trade, Agriculture Policy, Marrakesh Decision, Export Restrictions

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Introduction

The global food crisis (GFC) of 2006 to 2008 is a significant event in the history of the world food system.1 The crisis was primarily associated with sudden, sharp and sustained increases in the prices of many basic agricultural goods and foodstuffs. Such a dramatic escalation of food prices had not been witnessed in more than a generation. Few analysts saw the GFC coming. Fewer would have predicted a crisis of such magnitude or of such consequence to human suffering. Let us recall the GFC has effectively wiped out decades of human development gains. There are now over one billion hungry people. As a result the international community has been forced to concede defeat in its efforts to achieve the Millennium Development Goal (MDG) to reduce the number of hungry people worldwide in half by 2015.2

While the general crisis in agriculture has long been acknowledged, a 21st century GFC prompted by surging commodity prices was not an anticipated scenario. This would have been a logical, if not a forgone, conclusion drawn from historical food production and prices trends. The post-war era saw food prices experience a chronic decline. Meanwhile, world food production - even on a per capita basis - significantly increased. These trends produced a unique and important historical event; in no other era of human history had food been so cheap, so abundant and so readily (and unequally) accessed.3 The crisis has also challenged conventional wisdom which assumed food crises would manifest through the vagaries of Mother Nature. While climate change and demographic pressures are undoubtedly major strains on the world food system, these factors did not precipitate the crisis. When taking into account the cacophony of voices seeking to explain the crisis, it is important to note weather has figured least prominently. By contrast, it is interrelated factors such as energy prices, agrofuels, global demand for animal protein and feedstuffs, a waning United States Dollar (USD), commodity speculation, and chronic disinvestment in Southern agriculture that are given most weight in conventional explanations. This extensive, complex set of factors underscores the novel defining characteristic of the present conjuncture: the primacy of global economic forces in triggering a global food crisis.

Despite the enormity of global economic factors to understanding the crisis, the multilateral trade system has received scant attention in the burgeoning literature on the GFC. As such, this represents a significant omission given the major role the World Trade Organization (WTO) agreements play in structuring the patterns of world food production and trade, and serving as the principle governing mechanism of the world food system. This gap in the literature is all the more poignant considering the United Nations (UN) food crisis response has identified a significant mandate for the WTO. Most analysts contend the WTO can help resolve the GFC by reducing Northern farm subsidies that distort international prices to the detriment of Southern farmers. However, the intuitive logic and analytics supporting this assumption is highly to global food security (it may very well produce the opposite). This paper seeks to steer

1 I have chosen to the period 2006 and 2008 in my analysis of the global food crisis as it best captures the steep rise in prices across all food and agricultural goods. This does not suggest that the global food crisis can be temporally isolated just to these years alone nor that the crisis is officially over.

2 For example, according to the Food and Agriculture Organization of the United Nations the number of undernourished people reached the one billion mark. Before the global food crisis, the official figure was somewhere around 850 million persons. So this is almost a 20% increase in a span of just two years. In addition, The global food crisis has led global policy makers and many national governments to concede defeat on achieving first Millennium Development Goal of reducing world hunger by 2015.

3 Though during this recent period access to food remained a daily struggle for more than a sixth of the world's population.

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the discussion of the linkages between the multilateral trade system and the GFC beyond current narrow, economistic subsidy debate. In turn, the analysis presented here examines a series of existing and proposed WTO mechanisms which are arguably the most salient to the GFC. I argue that existing international trade rules – as well as future rules embodied in the current deal on the table as part of the WTO Doha Development Agenda (DDA) – are unlikely to ensure a pro-food security response to the GFC. The paper is organized as follows. The fist section covers research methods. The next section provides an overview of empirical and theoretical studies about the GFC. The third section examines the official discourse surrounding the food crisis and the WTO. This is followed by an analysis of key issues where the WTO and multilateral trade rules bear most relevance to the GFC: existing and possibly future food security-related provisions at the WTO to address rising food prices; export restrictions and prohibitions, and; WTO participation in the UN High Level Task Force on the Global Food Crisis.

Research Methods

The paper draws on extensive research conducted between September 2008 to September 2009 in Geneva, Switzerland (where the WTO and UN High Level Task Force on the Global Food Security Crisis are headquartered) and Rome, Italy where the three UN food agencies – the Food and Agriculture Organization (FAO), World Food Programme (WFP), and International Fund for Agriculture Development (IFAD) – are based.

There are three major sources of qualitative data utilized in the writing of this paper. Primary data comes from 75 semi-structured interviews undertaken with senior WTO and UN officials, ambassadors and national policy-makers, transitional corporations, and representatives of global civil society. The interview protocol was designed to obtain information from all relevant international organizations, a broad range of countries varying in geographic and wealth distribution and food insecurity status. In addition, the selection of participants included a variety of state and non-state actors involved in agriculture and food security policy-making and/or international trading of agriculture and foodstuffs.

Documentary and primary analysis consisted of official reports, policy papers, official negotiating documents, minutes, and archival records (including draft memorandum, internal circulars and correspondence) from the WTO and UN libraries and archives. In addition, other materials such as live or recorded video and audio streaming of speeches and official meetings were obtained via the Internet. Secondary materials such as academic works, media reporting, NGO reports, and other public available materials were also consulted. The paper also draws from personal and field notes gathered from various inter-governmental and international organization meetings, and conferences attended over the course of the research.

Contending Perspectives on the Global Food Crisis

Efforts to understand GFC have resulted in a new and growing body of research. This research program has been marked by an intense debate over the fundamental causes and appropriate responses to the crisis. The progression of this debate itself, not just its intellectual outputs, is a remarkable social fact. Not only does one find a plethora of epistemologies and diversity of actors involved in knowledge production, there is also a tangible link to real-world political developments. Given the space constraints, the overview provided here is admittedly truncated

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and limits itself to identifying the actors making claim to knowledge. To facilitate this task the GFC research program is categorized crudely into two groups.

The first group consists of research seeking to identify the specific cause the GFC. General characteristics of this group includes the widespread use of formal research methods (e.g., econometrics) and, overwhelmingly composed of agricultural and development economists either associated with land-grant universities and/or international organizations with significant research capacities (i.e., World Bank (WB), International Monetary Fund (IMF), International Food Policy Research Institute (IFPRI), Organization for Economic Cooperation and Development (OECD), etc.). The work of the Food and Agriculture Organization (FAO) of the United Nations, a key global governance institution in the area of agriculture and food, only partially falls under this group (see discussion below).

Although commodity price began increasing during 2005-2006 (FAO, 2006), the GFC is commonly associated with 2007-2008, a period which saw the price of many staple foods double or triple (FAO 2008a), the correlation between commodity prices and agrofuels become increasingly evident (FAO 2007a:2007b), and a dramatic rise in global hunger (FAO, 2008b; IFPRI, 2008a). As the data sets became available a slew of studies followed seeking to isolate the primary triggering variable behind the GFC. This research has not resulted in consensus or identified a smoking gun, however, US and EU agrofuel policies (IMF, 2006; FAO, 2008a:2008c; FAO-OECD, 2008; Lipsky, 2008; Mitchell, 2008; OECD, 2008; Rosegrant, 2008; Trostle, 2008; WB, 2008a), energy prices (ADB, 2008a; Alexandratos, 2008; Trostle, 2008) and deppreciation of the USD (Alexandratos, 2008; FAO, 2009; Mitchell, 2008; Timmer, 2008) are generally considered crucial driving factors. Early on the crisis, growing demand for animal protein from the emerging economies (e.g., China and India) was identified as important causal factors. (IMF 2006: 2008a:2008b; IFPRI 2008a) However, subsequent research has dispelled this claim (see Alexandratos, 2008; Heady & Fan, 2008). Other studies note the importance of trade policies, such as export restrictions (Mitra & Josling, 2009; Dollive, 2008; Mielke, 2008; WB, 2008b) particularly in accounting for the trebling of rice prices (Heady & Fan, 2009; Slayton, 2009: Brahmbhatt & Christiaensen, 2008). Other commonly cited factors such as poor weather and low stocks are not supported by recent analysis. (Heady & Fan, 2008) A new and controversial issue is the role of financial speculation in commodity markets (Clapp & Cohen, 2009; Margulis, 2009) where the evidence is mixed as to the degree to which it affected price increases (WFP, 2009). Yet there is a growing consensus that speculative activity contributed to high price volatility (Conference Board of Canada cited in Heady & Fan, 2008: 378; IATPa, 2008; Clapp, 2009b; UNCTAD, 2008), including a recent US Senate Committee investigation finding excessive speculation in the commodity markets. (Levin & Coburn, 2009)

A second body of research seeks to explain how the GFC is an outcome of longer-term structural changes in world food system global food economy. This body of research includes a rather diverse set of academic disciplines and research institutions (including NGOs), thus also a multiplicity of research methods (including but not limited to econometric analysis). Several international studies, in particular the work of the FAO, has stressed the importance of longer-term changes in global markets and national policies gave rise to the GFC. (ADB, 2008b; FAO 2008c; UNCTAD, 2008) Dwindling public and international investment - manifest in deteriorating basic research capacity, availability of extension services, and access to basic production inputs - has led to significant declines in Southern farm productivity (FAO, 2008a: 2008c; Bage, 2008; IATP, 2008b; Oxfam, 2008, also see WB, 2008a). Other significant long-term include the deregulation of the farm sector - under structural adjustment and multilateral

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trade agreements – and the restructuring of developing countries’ agriculture sectors towards export trade markets are argued to have worsened food insecurity, increased food import dependence, intensified rural poverty, and promoted ecologically destructive production methods (Action Aid, 2008; Akram-Lodhi, 2009; Bello, 2009: 2088; Conceicao & Mendoza, 2009; Holtz-Gimenez, 2009; McMichael, 2009a: 2009b: 2008; Mittal, 2009). The ongoing impact of climate change on agricultural production is also noted. (WFP, 2009) In addition, a weak and fragmented system of international agriculture and food governance permitted the crisis to escalate unchecked. (Clapp & Cohen, 2009; McCalla, 2009)

Despite the diverging assessments and conclusions drawn by each group, their work is not utterly mutually exclusive and several points of consensus are identifiable. First, both groups fundamentally view the GFC as a complex interface of factors (causes and structural conditions). Second, both sets of analysis agree developed countries set off the GFC not developing countries - yet the poor and vulnerable in the later have borne the brunt of the negative consequences. Third, even in the face of recent declines in international food prices, both groups subscribe to the view the GFC is not over but likely to deepen if not continue for the medium-term.

Of significance is how the debate above has informed and contributed to global politics and shaped the response to the food crisis. In spring 2008 US President Bush created an international incident when he remarked rising prices on increased demand for animal protein in China and India. (Lakshi, 2008) Such comments from Washington prompted a strong rebuke from Chinese President Hu Jintao who characterized Washington’s comments “irresponsible” and “baseless accusation” stating developing countries were not to blame but rather Northern agricultural support. (Cited in ChinaDaily, May 14, 2008) Developing countries which imposed food export bans were the target of criticism by the US, IMF, and WTO (Margulis, 2009), prompting the Indian Foreign Minister to respond that “every country must first ensure its own food security” (quoted in the New York Times). 2008 was marked by heightened North-South tensions over, especially as developing countries (in this case citing World Bank, FAO and OECD research) began to single out US and EU agrofuel mandates as the principle culprit behind the GFC. The North-South split on agrofuels took centre stage in June that year FAO High-Level Conference on World Food Security (Blas & Dinmore, 2008) an again at the G8 Summit in Hakaido, Japan, where in the face of mounting evidence demonstrating of the agrofuel-food price spike link and calls for a moratorium and stronger regulation, Northern countries managed to limit international cooperation on agrofuels to launching additional research and information exchange between agrofuel producers. (FAO, 2008b; G8, 2008) According to a senior FAO official, international organizations were summarily divided along North-South lines with the FAO critical of Northern agriculture policies, while on the other hand, an alliance of the IMF, WB, OECD and WTO called for further trade liberalization (Sundaram, 2008). In fact, this latter side of the debate (the first group discussed above) was instrumental in informing the UN-coordinated multilateral response to the GFC. As Clapp (2009b: 52) argues, the multilateral response – consisting of emergency aid, short-term financing for food imports, increases to agriculture investment, and trade policy reforms – appears to “follows directly from the interpretation of the crisis” by the US, WB, and OECD and offers little to address the structural conditions behind the crisis.

The WTO and the Global Food Crisis

Among the overarching explanations given for the GFC, the multilateral trade system was not

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identified as a fundamental precipitating factor (export restrictions being an exception and discussed further below). In sharp contrast, concluding the WTO Doha round of trade negotiations emerged as a much touted and broadly supported solution to the crisis by the international community.

The principle pitchman was WTO Director-General Pascal Lamy, who pleaded this case often to WTO members and at international meetings. Below is a characteristic intervention,

“The reasons why we must conclude the [WTO Doha] Round this year are visible to all of us and they are becoming more critical by the day....[we] have also witnessed an unprecedented escalation in food prices world wide which has had negative effects particularly on developing countries that depend on imports for their food security or are net food buyers....[a] WTO deal could help soften the impact of high prices by tackling the systemic distortions in the international market for food.” (Lamy, 2008)

WB President Robert Zoellick offered a corresponding view, arguing concluding the Doha round would create “an opportunity for developing countries” by “phasing out huge distortions from subsidies and tariffs.” (Zoellick, 2008) Heads of the relevant international organizations also called for a successful conclusion of the DDA to resolve GFC. (Gurría, 2008; Ki-Moon, 2008; Strauss-Kahn, 2008; von Braun et al, 2008) This position was also affirmed by the leaders of the industrialized countries. In their Statement on Global Food Security, the G8 declared,

“Food security also requires a robust world market and trade system for food and agriculture. Rising food prices are adding inflationary pressures and generating macroeconomic imbalances especially for some low-income countries. In this regard, we will work toward the urgent and successful conclusion of an ambitious, comprehensive and balanced Doha Round.” (G8, 2008)

And unlike the North-South split on agrofuels, leaders of the developing world have been in agreement with their Northern counterparts on trade, calling for a swift conclusion of Doha countries in the name of world food security (da Silva, 2008; Jintao quoted in ChinaDaily). As a result, this international policy consensus is also captured in the UN Comprehensive Framework for Action, the cornerstone of the multilateral crisis response, which includes completing the Doha round as part and parcel to resolving the GFC. (UN, 2008)

This incongruity between international trade as an origin and a prescription has not gone unnoticed. Over 200 NGOs, under the banner “Our World is Not for Sale” (2009), wrote an open letter to the heads of the Bretton Woods institutions and to agriculture ministers rejecting the WTO as a solution to food crisis. International civil society has questioned the intellectual merits of the WTO’s ability to resolve the food crisis (IATP, 2008c; Raja, 2008) Moreover, there is deep skepticism in what appears to be attempts by international institutions to appropriate the crisis as an opportunity to promote trade liberalization (Clapp, 2009b; Holt-Gimenez, 2009; Sundaram, 2008) or as a tactic to pressure food insecure nations into accepting a WTO deal (Kwa, 2008). The proponents of the WTO, in particular the WB and the mainstream international economic press (Economist, 2008; Irvine, 2008; Wolf, 2008) have vilified farm subsidies, asserting further reductions in Northern (and Southern) agricultural protection can undo the distortions in the global food economy - now argued to be the root of the current crisis - to benefit developing country farmers. (WB, 2008b:2008c)

While reducing Northern agricultural subsidies is an article of faith in trade policy circles

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(Margulis, 2008), the manner in which it has been invoked in support the GFC entails a questionable logic. There is undoubted intuitive appeal in the anti-subsidy argument. But even the assumption that reducing Northern farm subsidies unequivocally benefits developing countries is not well supported. Even the (usually adversarial) group of prominent development economists agree that eliminating Northern farm subsidies will largely benefit Northern taxpayers and the major food exporters (Bhagwati & Panagariya, 2008; Birdsall let al, 2005). Even the WB’s models do not support its official position on the WTO and show that in the case of full trade liberalization, food importing countries will face further price spikes and only poor cotton producers are likely to be better off. (WB, 2008c)

The efforts to confine the GFC-WTO relationship to a narrow subsidy debate have obscured far greater considerations. First, by strictly focusing on farm subsidies, WTO proponents have framed the international trade-food crisis linkage in terms of general economic welfare instead of what, is arguably, the most relevant linkage, international trade’s impacts on food security. The relationship between international trade and food security is highly controversial and poorly understood. (WFP, 2009). There is little evidence to show international trade liberalization directly improves food security. (WFP, 2009; Thomas, 2006; Sarris & Morrison, 2007; Watkins et al, 2003) In combination with the specter of higher future food prices if Doha is completed, arguments which couch the WTO as a panacea to the food crisis become highly suspect. Second, a narrow focus on subsidies artificially delimits the discussion on the WTO’s role in the GFC to the current trade negotiations in agriculture. However, the agriculture negotiations are only one element of WTO. Apart from acting as a negotiating forum, the WTO has broader implementation, regulatory and arbitration functions which could be strategically utilized by developing countries (see Sharma & Konandreas, 2008), the international community, and other actors to respond to the GFC. Just as an example, the WTO’s Agreement on Subsidies on Countervailing Measures (SCM), Agreement on Agriculture (AA), and Agreement on Trade in Services (GATS) alone contain provisions relevant to the agrofuel question. Third, the subsidy argument cedes the discussion to the terrain of economists. This is unsatisfactory from a global governance perspective. The WTO is widely acknowledged as the central global economic governance institution on issues of agriculture policy. (Kelly & Grant, 2005; Coleman et al, 2004; Hocking & McGuire, 2004; Trebilcock & Howse, 2005; Wolfe, 1997; Krueger, 1998) The severity of the current crisis and the basic fact that efforts to improve world food security are contingent on developments in the global agricultural policy regime, this highlights the need for a much broader and inclusive dialogue on the part of the international community on the future appropriate balance between international trade and food security goals.

The remainder of the paper seeks to address the WTO-GFC linkages in a comprehensive fashion. By steering away from the hyperbole of WTO as a “quick fix” and the economistic subsidy debate which tell us very little about how specific policies and measures countries have been negotiating bear on the GFC. As Mielke (2008) notes, the importance of the WTO’s unique rule-making purview ultimately ensures it has a lot to say about how states are allowed to respond during a food crisis. So the question still looms large - what types of WTO trade rules and mechanisms are relevant to national and/or multilateral responses to the global food crisis?

Poor housekeeping at the WTO

Given all the considerable political weight given to the WTO as a solution to the food crisis, there is little to show the GFC has been a high priority issue to the institution and it’s the

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majority of its members. In fact, given all the ballyhoo over the Doha round at the FAO and G8 summits, the scant attention paid to GFC at the WTO might appear to outsiders to verges on the scandalous.

The crisis has not been systematically or substantively engaged in the major deliberative organs of the WTO. The Committee on Agriculture is the WTO’s primary body charged with implementing the agricultural agreement and monitoring members farm policies and developments in international food markets. Despite this mandate, WTO members have not included the crisis (not even the issue of export restrictions or agrofuel subsidies!) on the Committee’s agenda. The WTO’s highest deliberative body has only made passing reference to the matter. In the May 2008 of the WTO General Council, the Director-General referred to the crisis in his effort to gain support for concluding Doha by the end of year. While his statement drew several official and perfunctory statement of support, no real debate occurred. The only occurrence of a meaningful discussion of on the GFC was in a very brief presentation made by several African countries to the WTO’s Sub-Committee on Least Developed Countries. This presentation itself consisted of a brief overview of conclusions on the role of trade in the food crisis discussed at a separate NGO-organized conference; it was not a discussion initiated by the Sub-Committee itself. Not even at this relatively minor WTO body dedicated to addressing the interests of the poorest WTO member was the GFC extensive attention.

Debate about the GFC and international trade by contrast has featured prominently in the public relations work of the WTO. The WTO Director General has spoken about the crisis more frequently when outside of Geneva. On the WTO official website, the WTO has posted two video debates on the crisis, both featuring the UN Special Rapporteur on the Right to Food in dialogue first with a former WTO negotiator and then with the Director-General. (DeSchutter & Haberli, 2008; DeSchutter & Lamy, 2009) The food crisis has been the subject of various panel discussions at the WTO’s Public Forum (an annual conference open to NGOs and academics). (Haberli, 2008; Heri & Haberli, 2008; WTO, 2009) While the WTO’s public façade is oriented towards demonstrating transparent engagement with civil society (Hopewell, 2009), these events do not constitutes official work by the organization.

As a “member-driven” organization, substantive work on issues are usually initiated by members and supported by the WTO secretariat. Whereas several developing country members have flagged concerns about the impacts of GFC on their trade prospects, these concerns have been responded to very elementary analysis on the part of the Secretariat (see WTO, 2008a). While it may be the case that WTO members have not strongly demanded work on trade and the GFC, it has become increasingly common for the WTO Director General and the Secretariat to initiate work independently on issues of crucial importance. (Deere, 2009) In the case of the global financial crisis, the WTO Director General was instrumental in arranging a meeting of major financial institutions that ensured the continued flow of trade financing to developing countries and applauded for establishing a global monitoring system of “protectionist” policies. In sum, despite a multitude of statements linking the GFC response to the success of the Doha round and considering the magnitude of the GFC’s impacts on the overwhelming majority of WTO members– relatively few are considerable players in global finance but most are food importing developing countries that experienced a 40% increase in their food bill in 2008 (FAO, 2008b) - the WTO has failed to demonstrate significant interest in the food crisis.

Food Security Mechanisms at the WTO

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Food security specific provisions are abound the WTO agreements, including Article XI of the General Agreement on Tariffs and Trade (GATT, 1947) and throughout the domestic support, market access, and export competition provisions in the AA. Many of these provisions are relevant to the GFC and offer developing countries some policy options to try to shield themselves from the worst of the impacts of higher food prices. (Sharma & Konandreas, 2008) Of all these provisions, it is the WTO’s Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net-Food Importing Developing Countries (a.k.a., Marrakech Decision) that is of most importance. First, the Marrakech Decision is a specific WTO measure for high food prices. Second, the GFC has renewed the interest in the Marrakesh Decision. The UN Secretary General’s High Level Task Force on the Global Food Security Crisis envisages the Decision as a key medium-term measure in the GFC response (UN, 2008). This is position which draws considerable political support from developing countries, the FAO, and civil society.

The Marrakech Decision is one of the results of the previous the GATT Uruguay Round (UR) (1986-1994) of multilateral trade negotiations. The UR is notable in that agriculture was fully integrated into multilateral system for the first time. Striking a balance between the interests of food exporters and importers was a major negotiating issue during the round, and it remains a key element in Doha round. Very early into the UR negotiations, developing countries coalesced under the Net-Importers Group (NIG) pressuring the major food exporters to provide them with stable and affordable food supplies and additional development assistance. Developing countries’ position was influenced by several factors, including: conventional economic wisdom which was unanimous in its prediction that reducing Northern agricultural subsidies drive up world food prices in the range of 4.4% (GATT, 1993); failure to meet the food production targets set after the 1972 world food crisis, and; a debt crisis which saw caused significant difficulties in financing food imports. While the NIG faced considerable resistance from developed, they were successful in securing that food security would be treated inside, not outside, the multilateral trading system by the time of the 1988 GATT ministerial meeting when trade ministers set out the parameters for the agriculture negotiations. (GATT, 1988) By 1991, a compromise solution between exporters and NIG was tabled in the 1991 Dunkel text4 as Annex D: Declaration on Measures Concerning the Possible Negative Effects of the Reform Programme on Net-Food-Importing Countries. The Declaration's wording remained entirely intact when it was adopted formally in 1994 as the Marrakech Decision in the Final Act Establishing the WTO and as the basis for Article 16 in the AA. While the Marrakesh Decision did not commit developed countries to provide specific levels of financing or food aid as the NIG had initially demanded, it unequivocally recognized the trade liberalization could have negative impacts on food security in developing countries and obligated developed countries to:

“review the level of international food aid to meet the legitimate needs of developing countries during the reform programme; adopt guidelines to ensure that an increasing proportion of basic foodstuffs is provided to least-developed and net food-importing developing countries in fully grant form and/or on appropriate concessional terms, and; give full consideration in the context of their aid programmes to requests for the provision of technical and financial assistance to least-developed and net food-importing developing countries to improve their agricultural

4 The 1991 Draft Final Act Embodying The Results of the Uruguay Round of Multilateral Trade Negotiations, is commonly referred to as the “Dunkel text” named after then GATT Director General Arthur Dunkel who was responsible for overseeing the agriculture negotiations.

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productivity and infrastructure.” (WTO, 1994)

Many developing countries see the Decision as providing them with a safety-net and guarantee of compensation as the price developed countries had to pay to get their support to conclude the UR. (WTO, 2001a)

There is a broad consensus among WTO members that the Decision has not been fully implemented (FAO, 2001). Least-developed and net-food importing countries, who are entitled for special treatment under the Decision, have repeatedly called for the full implementation of the Decision.5 NFIDCs have made the case that implementing the Decision is vital for them to address their growing food import bills, which they link directly an outcome of agricultural trade liberalization (WTO, 2001a). These countries have managed to keep discussions and technical work concerning the implementation of the Decision within the WTO system, including in the regular work of the: Committee on Agriculture6; General Council (WTO, 1998; WTO, 2000); Ministerial conferences (WTO, 1996a), and; throughout the Doha round (WTO, 2001b; WTO, 2001c). Yet after more than a decade of discussions, the Decision has not been operational zed. Today, the decision is largely seen as a failure and commonly referred to as a “paper tiger” or as “window dressing” to the WTO Agreements by WTO trade negotiators.7 The failure to implement the Decision to date provides an important window into the functioning of the WTO and how this bears on its role in the GFC response.

Food prices and financing facilities

One of the main elements of the Decision included exploring the potential of new international food-financing mechanism to address the balance-of-payments problems of food importers during periods of high food prices. Least-developed and net-food importing developing countries had long felt that the existing international finance facilities available for balance-of-payments problems related to food imports were highly, unsatisfactory. First, such facilities tend to be temporary, subject borrowers to additional conditionality requirements, and, particularly the IMF’s Compensatory Financing Facility (CFF), is limited to the purchase of bulk cereals (not oilseeds and grains which constitute the bulk of developing countries’ national diets). For these reasons and other technical issues, few countries have made use of existing facilities. (Bird, 2009) Throughout the UR implementation process, WTO members in consultations with the IMF, WB, FAO and UNCTAD have explored alternative means of improving financing for food imports. From the onset of these talks the financial institutions have been of the strong view that there is need to create any new financing facilities (WTO, 1995a). Furthermore, they have characterized developing countries’ demands for “looser” conditions as incongruence to the

5 The WTO list of net food-importing developing countries as established by the Committee [last revised 2005]. This includes least-developed countries as recognized by the Economic and Social Council of the United Nations which are WTO members ; Angola, Bangladesh, Benin, Burkina Faso, Burundi, Cambodia, Central African Republic, Chad, Congo, Democratic Republic of the Djibouti, Gambia, Guinea, Guinea Bissau, Haiti, Lesotho, Madagascar, Malawi, Maldives, Mali, Mauritania, Mozambique, Myanmar, Nepal, Niger, Rwanda, Senegal, Sierra Leone, Solomon Islands, Tanzania, Togo, Uganda, Zambia (32) and net food importers established by WTO. Barbados, Botswana, Côte d'Ivoire, Cuba, Dominica, Dominican Republic, Egypt, Gabon, Honduras, Jamaica, Jordan, Kenya, Mauritius, Mongolia, Morocco, Namibia, Pakistan, Peru, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Senegal, Sri Lanka, Trinidad and Tobago, Tunisia and Venezuela. (26)

6 Each fall the WTO’s regular Committee on Agriculture undertakes a follow-up exercise on the Marrakech Decision which examines total aid contribution by developed country WTO members to LDCs and NFIDCs.

7 Interviews with developed and developing country senior trade officials.

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objectives of structural adjustment programs. Rising food prices in 1996-1997 proved to be a decisive moment in the Decision’s

implementation. That year, food prices rose by some 49% (FAO, 1999). Developing countries argued higher food prices were directly linked to the UR reforms – this link being the core requirement to enact the provisions in the Decision – and called for a swift and comprehensive implementation of the Decision (WTO, 1995a; WTO, 1996b). Developed countries disagreed and rejected that the Decision should be implemented. Under the guidance from the WB and IMF (Murphy, 1999; Madeley, 2000) the major exporting countries countered it was impossible to disaggregate the impact of the WTO agreements from broader structural factors. (WTO, 1995b) This simple yet powerful argument served to single-handedly invalidate developing countries’ claim to assistance under the Decision. Multiple senior officials closely involved with the drafting the Decision noted that developing countries essentially had their “legs kicked out from under them” by developed countries and the financial institutions. By putting the burden of proof to establish higher food prices were directly caused by the UR - something extremely difficult to do with the even the most sophisticated best economic models – it has “made it virtually impossible to ever implement the Decision” as it had been intended.8 Despite this setback, in 2001 WTO agreed to establish an inter-agency panel to further study the issue. The panel mirrored the earlier Director-General consultations, the WB and IMF remaining lukewarm and the FAO and UNCTAD supportive of establishing a new financing mechanism. As a result while the panel agreed a new mechanism was feasible, it do not endorse a specific mechanism. By 2002 the panel had completed its mandate and discussions on the financing mechanism were put on the back-burner. Perhaps this was a case of too little, too late as by this time food prices were low again and interest in the Decision considerably waned. (Ramesh & Konandreas, 2008)

International food aid levels

The Decision also called for a review of international food aid levels. The intent of this provision was to ensure that donour countries would provide sufficient levels of food aid in the case of higher food prices. It is a well known fact the food aid is negatively correlated with rising food prices (Stokke & Clay, 1999). In addition, a major element of the UR agricultural reform process is to reduce structural production surpluses in the North which simultaneously depresses world food prices for competing food exporters, but keeps food prices low to the benefit of consumers in food importing countries. While international food aid is also covered under the provisions of the AA, this is only indirectly linked to the Decision implementation. Rather, the WTO food aid disciplines seek to ensure that donors provide recipients legitimate food aid and not simply dumping surplus food production in developing country markets, which has the effect of undermining local production.

Reviewing and revising the minimum annual target is a long-standing issue in the development community. The current Food Aid Convention (FAC) - a treaty part of the International Grains Council (IGC) based in London - sets the level of international food aid which stands at10 million metric tons. This figure is a minimum yearly target. Furthermore, the target level is voluntary. Food aid donors are encouraged to meet their pledges with the US by far being the biggest donor, followed by the EU, Japan, Australia and Canada. While the 10 million tons target was an outcome of the 1974 UN World Food Summit. However, this target was not met until 1986. There is broad consensus that the annual target is much to low to meet

8 Interviews with senior IO officials.

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the world food aid demand. To date, there issue of increasing food aid levels has never been discussed at the WTO, neither in the regular work of the Committee on Agriculture or in the Doha round agricultural negations. It is more likely the case that WTO’s increasing foray into international food aid governance diminishes the likelihood of a food aid level review. The current FAC was opened for renegotiation in 2004. Developing countries and global civil society hoped this would provide the opportunity to reopen the debate about a revised international food aid target. Yet FAC negotiations have been put into a state of freeze pending the Doha round is concluded. Developed countries have made it clear that they will not reopen the FAC until the high political stakes at play in the agriculture negotiation are settled, indicating that trade trumps developments and humanitarian concerns.

The Decision and developing country negotiating strategy (2001-Present)

Dissatisfied with the implementation of the Decision, developing countries continued to press to keep the issue on the WTO’s agenda during the Doha Round. This included adding the Marrakesh Decision to the list of outstanding implementation issues that would be addressed in the Doha negations (WTO, 2001c), establishing the inter-agency panel discussed above, and mandate to work on technical and financial assistance to least-developed and net food-importing developing countries (WTO, 2001d). Ministerial support for implementing the Marrakesh Decision was re-affirmed at the 2005 WTO Honk Kong ministers meeting. (WTO, 2005)

Notwithstanding the high-level political support indicated in these declarations for the interests of food insecure WTO members. However, in practice, developed countries were successful in shifting the Decision implementation work out of the negotiations and into the regular work of the Committee on Agriculture. This was a significant blow to developing countries, which had hoped to use the failure to implement Marrakech as either a bargaining chip in the agriculture negotiations or as means to shame developed countries as well as means to draw attention the specific economic constraints faced by net-food importing (NFIDCs) and least-developed countries (LDCs). Whereas in the early years of the Doha negotiations, these countries kept the political pressure on the developed countries by making strongly worded interventions in WTO meetings and in the media about the need to realize the spirit of the Decision, the last few years are notable for omission of references to the Decision at the WTO. This sudden change in developing country strategy is puzzling given that no success in implementing the Decision had been achieved. True, NFIDCs and LDCs, if pressed, state they still hold the same official view though their (in)actions suggest otherwise. According to one developing country negotiator, NFIDCs and LDCs have become “disillusioned” and “given up on the Decision after 10 years of efforts, nothing has been achieved.”9 Several other developing country negotiators told a similar tale. But from a trade negotiator’s perspective it makes little sense. At the WTO’s countries fight for issues of interest to the bitter end. They seldom give up mid-stream. Moreover, it is highly rare for countries to drop issues which have explicit ministerial mandate like in the case of the Decision. The timing makes it even a more puzzling case. Developing countries appear to have jettisoned their demands on the Decision beginning in 2006. This is exactly when rising food prices were becoming evident to everyone. Doha’s new food security mechanisms?

9 Interview with developing country delegate.

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The pre-2006 decline in food prices and corollary interest in the Decision is not a satisfactory explanation to explain why developing countries “gave up.” A more comprehensive explanation is the perceived benefits NFIDCs and LDCs are poised to enjoy if Doha is completed. This includes access to new trade mechanisms, which many countries argue are crucial to protect food security.

Under the current deal on the table (see WTO, 2008) LDCs are exempted from taking any further commits to liberalize their farm sectors. LDCs have also negotiated for duty free and quota free (DFQF) access for their exports to developed and emerging developing country markets. Recognizing that LDCs still face significant capacity related constraints and non-trade barriers, the exemptions and DFQF access is considered a major negotiation success for LDCs. Many NFIDC countries (many of which fall into the new category of small vulnerable economies (SVEs) have also secured considerable special and differential treatment, including making lower reduction to import tariffs and greater policy space on domestic support spending, for example with respect to food security measures in the Green Box. In addition, SVEs and LDCs will both have access to the Special Safeguard Mechanism (SSM). The SSM – perhaps the most controversial issue in the Doha agricultural negotiations – is designed to protect producers from import surges. Protection from import surges, largely from “dumped” Northern agricultural and food goods that have caused significant damage to local markets and producers (see FAO studies on import surges), is of the utmost importance to developing countries’ food security. In addition, SVEs will also have access to designate a list of agricultural goods as Special Products, which entitle them make lower (than average) tariff reductions on those commodities which have a role in protecting food security, rural development, and rural livelihoods.

Securing a considerable amount of additional flexibility and special and differential treatment in these negotiations on food security-related issues, it follows the value of the Marrakech Decision is significantly diminished for NFIDCs and LFCs. In the face of these major negotiating victories, there would have been little incentive for these countries to rock the boat and face an unnecessary political cost by insisting for the Decision in the face of the significant S&D they were receiving from developed countries.10 Looking back, the Decision provided developing countries a bargaining chip to be leveraged for other concessions. This does not mean that NFIDCs and LDCs were not intent upon achieving full implementation. Rather, developing countries revised position to concede the Decision brings into focus the perils of pursuing food security objectives at what are at the core, commercially-oriented negotiations. Claims that the Doha negotiations will necessarily produce pro-food security need to be treated cautiously. Given the way WTO negotiations operates, where everything is part and parcel of larger trade-offs among competing objectives, food security is always in ganger if becoming a casualty.

Export Bans: States vs. Markets

The GFC brought significant attention to the use of export restrictions and prohibitions. Export restrictions and prohibitions have been cited as a major cause of the rise in food prices and for increasing price volatility. (Mielke, 2008; Dollive, 2008; Mitra & Josling, 2008, Heady &

10 The point was not lost LDCs and NFIDCs that much of the S&D they have achieved in the current round is both a result of their negotiating strategy and efforts, and support from developed countries which have used the strategy of differentiation between groups of developing countries to isolate and pressure large-emerging developing countries such as China, Brazil and India.

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Fan, 2008) According to FAO, the use of export taxes, restrictions and prohibitions increased at the peak of the GFC during summer 2008. (FAO, 2009) Although the data is incomplete and very patchy, some 30 countries introduced such measures between 2007 and 2009. This group of countries is highly diverse, ranging from major agricultural exporters and self-professed free traders such as Brazil and Argentina, major grain producers such as Russia, China and India, middle-sized counties like Indonesia, Pakistan and Bangladesh , as well as small food importing countries like Mauritius. While the food production and availability situation of all these countries are unique, most countries have publicly stated that export restrictions are necessary to keep domestic food prices stable and an ensure an adequate food supply. Several developing countries also argued that such measures were vital to national security, a claim supported by the examples of Haiti and Barbados which saw escalating food prices led to mass rioting and toppling elected governments.11

These policies have generally drawn sharp criticism from the WTO Secretariat the international financial institutions, industrialized countries, and the private sector. According to the International Food Policy and Research Institute (IFPRI, 2008), the essential dilemma presented by export trade policies is as follows,

“How effective are these responses likely to be? Price controls and changes in import and export policies may begin to address the problems of poor consumers who find that they can no longer afford an adequate diet for a healthy life. But some of these policies are likely to backfire by making the international market smaller and more volatile. Price controls reduce the price that farmers receive for their agricultural products and thus reduce farmers’ incentives to produce more food.”

And,

“These national agricultural trade policies undermine the benefits of global integration, as the rich countries’ longstanding trade distortions with regard to developing countries are joined by developing countries’ interventions against each other.”

Regardless of individual countries’ reasons for resorting to export restrictions, international institutions made great efforts to paint export restrictions as a classic collective action problem: efforts to keep food prices stable at home just serve to push global prices higher. Not surprisingly, the international policy consensus on export restrictions and similar policies is overwhelming with their outright elimination the states objective. (WB, 2008b; UN, 2008)

Export restrictions and prohibitions falls under the rules of the WTO agriculture agreement. The AA allows states to use these policies on agricultural commodities on a temporary basis. By comparison, export bans on industrial goods have long been eliminated in the GATT/WTO. Restrictions and prohibitions are permissible so long as they are “[T]emporarily applied to prevent or relieve critical shortages of foodstuffs or other products essential to the exporting contracting party.” (WTO, 1994) The process to initiate export restrictions is straightforward. Under the current WTO rules, WTO members which are significant food exporters must notify the WTO Committee in Agriculture and consult importers. Reforms to the WTO’s rules on export restrictions and prohibitions have been under discussion

11 Interview with developing country officials (5). This view was also stated by UN Secretary General Ban Ki Moon in several speeches in 2008.

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since the Doha round began. As of yet, WTO members have not come an agreement on how treat export restrictions and prohibitions in this round. WTO members are split on the issue largely along North-South lines, with developed countries in favour of more stringent rules, while developing countries indicating a preference for only minor changes to the status quo.12

The GFC has rekindled the debate over these policies in Doha negotiations. Several WTO members complained they were not consulted by exporters over the introduction of restrictions nor did exporters report them the Committee on Agriculture as required. Food importing developed countries began to argue the existing WTO rules measures were inadequate and in April 2008, Switzerland and Japan tabled a negotiating document outlining additional disciplines on export restrictions and prohibitions. Quite remarkably, the Chairman of the agriculture negotiations decided unilaterally to incorporate the Japanese/Swiss proposal into the latest version of the agriculture draft modalities (i.e., the textual basis for negations), without either raising the matter in a formal negotiating session or consulting the broader membership. Developing countries have expressed deep dissatisfaction with this change to the draft modalities.

Like farm subsidies, export restrictions and prohibitions have been vilified in the popular discourse about the GFC, corralling the international community in a call for their elimination. Eliminating export restrictions and prohibitions can only be achieved at the WTO and wholly depends on the results of the Doha agricultural negotiations.

While the backlash against export restrictions and prohibitions was not unexpected, the arguments for their elimination are not as sound as their critics suggest. First, while a straightforward economic logic suggests that export restrictions are an “obvious” problem (Sharma & Konandreas, 2008; Lamy quoted Lynn, 2009), the evidence is not as straightforward. Export restrictions clearly had a significant impact on rice prices (Brahmbhatt & Christiaensen, 2008; Heady & Fan, 2008). Rice markets which are thinly traded and limited to a few major exporters. Slayton (2009), in a scathing study of the Indian and Vietnamese rice markets, notes that domestic political and profit-related concerns explains why these countries restricted their exports, and in combination with the resulting speculative action by private traders, set the 12 My intention is not to go deep into the history and technicalities of the negotiations but to provide some context

for the debate. With respect to export taxes, the focus on the WTO has been Argentina's use of export taxes on soy to promote value-added production domestically (primarily processing). Argentina, and other countries, have long made the argument that export taxes are a useful policy to promote value-added industry and a necessary policy response to developed countries' use of tariff escalation (i.e., imposing higher import duties on processed than unprocessed goods). In contrast, Argentina's export taxes have been heavily criticized by competing developed country exporters, primarily the US, EU. Canada, and Australia, for distorting markets and being generally “bad” policy. Argentine has managed to date to keep export taxes off the negotiating agenda, largely because of the support it has from its coalition allies in the powerful G20 bloc of developing countries. In the case of export restrictions and prohibitions, WTO members do have a mandate to improve the transparency and predictability of such measures to ensure food supplies are available for importing countries. The history behind these policies had been past efforts by some states to sue these policies to manipulate world prices by limiting supply, similar to OPEC in the case crude oil. However, such policies have rarely been used in recent decades because compared to 20 years ago, there are a greater number of countries which are major food producers and exports. This makes it extremely difficult for anyone exporter to exert a significant influence on the world market. As a result the use of export restrictions and prohibitions have wanted significantly in recent history. The only countries that have aggressively pursuing the elimination of export restrictions and prohibitions at the WTO have been Japan and Switzerland, largely for historical and political reasons. Many developing countries, including large and small exports alike, argue it is important for them to have access to export restriction and prohibitions for nationals security reasons. In addition, poor developing countries stress that in times of world food shortages, these policies are useful because they lack the foreign exchange and access to financing to purchase food in world markets.

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world rice market aflame in 2008. There is no evidence export restrictions and prohibitions did not have comparable impacts in wheat, soy and maize markets. Second, the timing of export restrictions – which began in late 2007 and early 2008 – shows these policies were enacted in response to the food crisis which was evident by 2006. In discussing responses to the GFC, it would be perhaps more analytically useful to consider export restrictions as secondary or amplificatory effects to distinguish them from primary causes (i.e, agrofuels). Third, no effort has been made to differentiate the impacts between export restriction used by major exporters and smaller producers. While the use of export bans by major exporters may undoubtedly have large effects on regional and world markets, actions by small countries like Mauritius to hold on to rice supplies are highly unlikely to do so. As it stands now, small developing countries already have very few policy options under WTO rules and structural adjustment programs to protect themselves. A blanket elimination of export restrictions and prohibitions, while tackling the problems posed by the actions of large exporters, will unfairly prejudice small and vulnerable countries. Fourth, glaringly omitted from discussion around export restrictions is the behaviour of private actors, in particular, grain and commodity traders. When states enact export restrictions they are also seeking to influence the actions of private traders. There is a complicated relationship between traders and governments since their interests are often in conflict when food prices are rising; states want to keep prices low for consumers while traders prefer prices to keep rising. This often leads to suboptimal outcomes as traders will either look for ways to get around restrictions, such as informally selling to other markets (where prices are higher) or hoard supplies in expectation of higher returns in the future. These considerations suggest strong calls for the elimination of export restrictions may not be the most effective response to the GFC. Several notable alternative proposals have been made to improve the AA and encourage greater compliance with Article 12 and to remove the need for export restrictions by establishing supply and demand control instruments (Mitra & Jostling, 2009; Sharma & Konandreas, 2008).

The WTO as an International Actor? Membership in the UN High Level Task Force on the Global Food Security Crisis.

A novel institutional response to the GFC has been the establishment of the UN High Level Task Force on the Global Food Security Crisis (HLTF) to coordinate policies and programs across the UN system and Bretton Woods organizations. The WTO is a member of the HLTF and contributed to the inter-agency process which drafted the Comprehensive Framework for Action (CFA). The CFA envisages a significant role for the WTO in several issue- areas, including tax and trade policies, and improving the operation of international food markets. (UN, 2008) In addition to policy issues, the WTO Director General (DG) can also make high level political interventions at the UN Chief Executive Board (CEB) meetings of all the heads the major UN agencies chaired by the UN Secretary-General. The CEB conducts periodic assessments of the HLTF (the UN SG also chairs the HLTF).

The WTO’s seat at the table raises a set of both very practical and theoretical quandaries. By all accounts the WTO is considered a “heavyweight” institution in global governance. The WTO’s exalted status is associated with its rule-making powers and strong dispute settled system. States have delegated considerable policy-making authority to the WTO. However, the WTO’s role as an international actor is not well understood. Again, the WTO sees itself primarily as a member driven organization which negotiates trade agreements, implements them

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and addresses disputes between members as they arise. Decision-making at the WTO operates by consensus though in practice powerful states (nowadays the US, EU, Brazil, India and China) hammer out the big issues among themselves. The WTO is very much unlike the IMF and WB where voting is distributed by contributions (so US dominated) nor does it force policies upon countries – WTO members either agree to the rules or they can leave (though in reality this is a much more complicated story). The WTO is also, as it constantly reminds us, not an aid agency. (WTO 2008b)13 In contrast to UN organizations, the WTO notably has “teeth” (the UN Security Council a notable exception) and can enforce members commitments, has limited research capacity, and, more importantly, the head of the WTO is very limited to make pronouncements on policy. In fact, the historical role of WTO Director-Generals has been to keep the ship sailing smoothly, ensure regular business is performed and to only occasionally dabble in high politics in specific circumstances (usually just to get a trade round started or finished). Moreover, the WTO’s interaction with the UN system is very limited to informational exchange and joint-research programs. Despite being just mere blocks away from several UN agencies, engagement has been limited.

This raises two interrelated related questions. First, what role can they WTO play in the HLTF? On the surface, it appears the WTO Director-General/Secretariat at best keep the HLTF up to date on the negotiations and answer queries about specific trade measures. WTO members have not provided the WTO DG any mandate to argue for one position or another on issues such as export restrictions and prohibitions and implementation at the HLTF. So while the DG and Secretariat might may make their preferences on policy issues known to the HLTF, they cannot claim to speak on the behalf of members. Second, does the WTO incorporate the recommendations of the HLTF? The short answer is no. The HLTF’s recommendations do not carry any any obligations on WTO members to achieve the trade-related objectives in the Comprehensive Framework for Action or from any subsequent communiqués. In addition, there are contradictions between the UN plan and the scope of WTO negotiations. A major example is the emphasis in the framework’s plan for expanding small-holder farm production in developing countries and incorporating them into international trade. Simply put, WTO rules favour high-value, export trade-led agriculture production models, which are often at odds with small-scale and family farming focused on domestic production of basic foodstuffs. This raises significant concerns about the coherence and viability of global efforts aiming to strengthen small holder farming through deeper links to international trade. Lastly, the UN plan’s to develop an international agrofuel consensus, entirely omits the WTO (by comparison, the IMF, WB, OECD, UNCTAD, UNEP and UNDP are tasked with this function). (UN, 2008) This is somewhat surprising given that the major elements of agrofuel policies, namely production subsidies and import tariffs are unequivocally agricultural trade policy issues that fall under the WTO. There may be several reasons why the WTO was not included in this work program, including: political pressure from the US, EU and Brazil (the major agrofuels producers and WTO key players) on the WTO DG to keep its distance from agrofuels and a general reluctance by WTO members to have agrofuels complicate what is already a protracted agricultural negotiation. However, it a likely just a matter of time until the WTO is included in the design of an international agrofuel policy, because if it is to have any strong enforcement, it would necessitate the agreement to fall under WTO rules (Margulis, 2008). However, this point may be mute for the time being. With

13 Yet the WTO is involved in what is many aid-like projects. This includes the WTO's integrated framework (ensuring policy coherence with the IFIs), the International Trade Centre (co-funded with UNCTAD), and the Aid for Trade agenda (a core “development” issue in the Doha Round). Much of the aid activity the WTO overseas is related to improve the trade capacity of developing countries and providing them with technical

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food prices receding from their 2008 highs and continued refusal by the US and EU to alter their agrofuel programs, work on developing an agrofuel consensus has entirely fallen of the international policy agenda.14

Conclusions

The GFC brought into focus significant shortcomings with international trade and agricultural policy. As a result, there has been a significant effort by the international community to reshape the multilateral trade system in line with supporting world food security. The analysis presented here suggests such an outcome is unlikely forthcoming.

The failure to implement the Marrakesh Decision illustrates a major shortcoming of the WTO’s ability to deliver the goods on food security. In hindsight, had Marrakech been adequately implemented, it stands there would have been greater recourse for developing countries to address the food price shocks (Sharma & Konandreas, 2008). Instead, the legacy of the Decision has only heightened the mistrust between food exporting and countries. Even though the HLTF has taken up the cause of the Marrakech Decision, echoed by the FAO, UN Human Rights bodies, NGOs, and many poor developing countries, it is difficult to see how the Decision’s could be substativelly reinvigorated in the Doha negotiations and the WTO's day-to-day. The traditional demanduers for Marrakech have abondened it. The Decision was also drafted nearly two decades ago in a much different global political and economic context. In fact, the existing text is more a hindrance than anything else because of the way it defines the linkages between food security and international trade. Perhaps a more effective approach would be for developing countries to call for a Marrakech Decision “plus”; one in the spirit of the original but updated to post-GFC world where the end of cheap food is now a reality. Of all the Decision’s elements, the present provides an opportune moment to initiate an international review of food aid and kick start the FAC negotiations.

Developing countries would be wise not to take too much solace in the new food security mechanisms on the Doha negotiating table. The SSM and Special Products definitely provide developing countries to shield themselves from the worst effects of agricultural dumping. However, the GFC has visibly demonstrated the food insecurity in the future is more likely to be linked to situations of scarcity (with increasing diversion of foodstuffs into fuel and greater ecological stresses due to climate change) not that of over production. As it now stands, the overwhelming logic informing the WTO negotiations is that food prices will continue to decline, something which is no longer assumed to be the case (FAO-OECD, 2008; Sharma & Konandreas, 2008). In fact, the GFC strikes at the most basic paradigm upon which international trade in agriculture and every national farm program has been founded on. Despite the GFC has been visible and tracked since 2006, WTO member continue to ignore reality and continue business as usual. The agricultural negotiations have yet to explore alternative measures to address the food security dilemmas of a post-crisis world food economy.

There is a significant imbalance in the WTO’s approach to address the “causes” of the GFC. Northern agricultural subsidies for agrofuel production have gone unchecked while the use of export restrictions and prohibitions by developing countries have come under disproportionate attack. It is striking that the countries which are pushing the hardest for tougher disciplines on restrictions and prohibitions have been two developed countries, Japan and Switzerland, where food consumption represents a small fraction of household income.

14 Interviews with senior IO officials.

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Developing countries have not pressed for similar demands. For those familiar with WTO negotiations, there is more than trace in cynicism in Japan and Switzerland efforts which are largely targeted at disciplining the major exporting developing countries, a group which has been putting severe pressure on these two countries to open their domestic markets. In the context of the WTO negotiations, the GFC has prompted and intensification over export trade but in a way that suggests developed countries are taking advantage of the situation to reshape trade rules to their advantage at the expense of developing countries' policy space.

It is premature at this point to evaluate the WTO’s role in the HLTF. The HLTF itself is very experimental new form of global policy coordinated system. And the future of the HLTF is very much contingent on several parallel development, the reform the FAO Committee on World Food Security and the outcome of the November 2009 World Summit on Food Security. However, several observes suggested the WTO has not fully bought into the HLTF’s program. While the WTO is happy to participate, the view remains that WTO members drive the rule-making, not international bureaucrats. Moreover, WTO officials remain wary of becoming two involved in internal UN politicking which has marred the work of the HLTF.

In conclusion, the optimism displayed by global policy-makers that the WTO will be a valuable element of the GFC needs to be tempered. The central claims that the WTO can play a major role in the GFC response are premised on a simplistic, abstract economic interpretation of the international trading system. This interpretation was found to be poorly supported upon closer scrutiny. A careful examination of specific areas where international trade rules may contribute to strengthening world food security found the WTO simply not up to the task identified for it. The Doha round was never intended to and will not resolve the food crisis. Looking forward, this suggests the need to for the international community to cease with well meaning (but baseless) statements of intent and shift towards engaging in a project which re-imagines the ways the multilateral trade system could better serve the interests of the food insecure.

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