WTO provisions in the context of responding to soaring food prices, by Ramesh Sharma and Panos Konandreas. FAO Commodity and Trade Policy Research Working Paper No. 25
This paper discusses certain WTO rules and provisions that have a bearing on response measures to the soaring world food prices. In doing so, it also reflects upon new rules that are being negotiated under the Doha Round.
The paper discusses the following topics: i) role of import tariffs in cushioning the impact of high world prices of imported foodstuffs on the domestic market; ii) provisions on export prohibitions, restrictions and export taxation; iii) food aid; iv) export credits, export credit guarantees and insurance programmes; v) the Marrakesh Decision and the scope of food financing facilities to deal with difficulties in financing food imports; vi) provisions on State Trade Enterprises (STEs); vii) stockholding and domestic food distribution provisions; viii) diversion of food commodities for biofuel production; and (ix) trade facilitation to alleviate excessive costs and delays in the delivery of food imports which aggravate further crisis situations.
The paper notes that, in general, the relevant WTO rules – in the Agreement on Agriculture and elsewhere – do not constrain countries suffering from the high food prices from taking remedial measures. However, there are several issues on the extent to which such measures are effective for the country itself and also on the adverse effects they may have on third countries. Some of these problems are not adequately addressed in the new rules being negotiated under the Doha Round and it is now the time to reflect on these issues so that the new rules are more effective in responding to future food crises.
