Markets and Trade
©FAO/Vyacheslav Oseledko

UN Food Systems Summit + 2 Stocktaking Moment Special Event

“Trade for agrifood systems transformation”

 Wednesday, 26 July 2023 | 10:30-11:30 (CEST) 

Red Room





The context
Trade is an integral part of our agrifood systems. Policies affecting trade and markets are important for all dimensions of food security and nutrition. By moving food from surplus to deficit countries and regions, trade contributes to food security and the diversity of food available to consumers. Furthermore, goods and services – ranging from fertilizers, seeds and farm machinery, through to financial services, transport, and retail – are traded at scale around the world. Given its key importance, trade is recognized as one of the essential means of implementation for the 2030 Agenda and the Sustainable Development Goals (SDGs), including specific targets under SDG 2 on Zero Hunger. However, while food and agricultural trade has expanded rapidly in the last decades, catalysed by the establishment of the WTO and the proliferation of regional trade agreements (RTAs), progress towards SDG 2 has stagnated and more recently has been reversed. COVID-19, economic slowdowns and downturns, climate shocks, and conflicts, such as the war in Ukraine, have demonstrated the significance of open trade and markets for global food security. As identified by the UN Global Crisis Response Group on Food, Energy and Finance (GCRG), it is crucial to keep food and agricultural trade and markets open, well-functioning and unimpeded, including by minimising logistical constraints and disruptions to supply chain. It is also important to address trade finance and debt constraints faced by developing countries.

The issues

The expansion of trade has improved access to food, as well as its availability, stability and nutritional diversity. Trade also enhances resource use efficiency, improves competitiveness, promotes investments and facilitates technology transfer, and thus it can play a positive role in food systems transformation and overall economic growth. However, trade can also increase the availability of highly processed foods that are unhealthy and associated with increased obesity and malnutrition. It may also lead to unsustainable farming practices, with implications for water, land and biodiversity, and thus food security. Furthermore, concerns over possible adverse impacts of cheaper imports on local production have been raised. Trade is increasingly taking place against a backdrop of very diverse national policies on agriculture, environmental protection, poverty reduction and health, among others. In the absence of coherent and coordinated national policies and regulations, trade may exacerbate unsustainable production and consumption patterns, with implications for the three dimensions of sustainability. Moreover, while open markets and growing trade have played a positive role in global economic growth, inequalities in wealth and income have widened both within and among countries. Persistent trade restrictions and distortions affect the functioning and resilience of food markets, alongside inadequate investments in public goods such as research, infrastructure and extension and advisory services. It is also essential to consider trade logistics, which are crucial to ensure the smooth and efficient movement of products, facilitate market access, reduce transaction costs and support food safety and quality control.

Key messages

The main message of the event will be the need for a coherent approach that brings together, inter-alia, trade, agriculture, nutrition, and health, in a holistic manner. Other messages include the following: the need to address trade distortions and restrictive measures, including export restrictions; the need to achieve positive outcomes at MC13 in February 2024 and beyond to strengthen the rules-based multilateral trading system; the importance of supporting intra-regional trade to achieve food security and regional economic development; the importance of diversifying food import sources to minimize risks; and the need to invest in logistics for agricultural trade. The session should also show how trade can contribute to achieving sustainability and highlight the positive role it can play in the transformation pathways of the food systems.

Expected outcome
Identify priority actions, primarily with regard to the overall linkages between food systems and trade to ensure that its contributions to food security and nutrition are maximized, while its potential negative impacts are minimized. The session will also highlight how trade should form a key pillar of the needed food systems transformation, and identify actions that must be undertaken in terms of policies, regulations and investments. Furthermore, the session should stress the importance of tackling logistical issues to mitigate risks and allow trade to play its positive role in the food systems transformation. It is expected that the outcome of the event will feed into the Plenary Session on “Mobilizing means of implementation for food systems transformation”.

Vision for the session
Trade touches various components of food systems and involves many actors. While trade can be an important catalyst for world food security and sustainable development, it is not sufficient. A systems perspective is needed to deliver improved and sustainable productivity, better health and enhanced well-being of people. It is essential to synchronize efforts from various sectors – including agriculture, trade, health, education, etc. – to achieve the synergistic impact needed from growing trade.


Mr Máximo Torero Cullen, Chief Economist, FAO