Negotiations on Agriculture within the Framework of the WTO

1. Arab Nations’ Involvement and the Effect on Development Negotiations on Agriculture within the Framework of the WTO Omar Sharif Seoud ANND

2. The Arab Region and Agricultural Trade • An overwhelming majority of Arab countries are net food importers and accordingly extremely susceptible to price volatility in the agricultural market. • As a result, the world food price/shortage crisis affected the most vulnerable citizens in the Arab world – as it did those in the developing world. • The Agreement on Agriculture in the WTO should be reviewed and revised from its basis. • Agriculture is at the forefront of food sovereignty, security, and the right to food. 2

3. Agriculture Trends 3

4. Trade Distortion and Obstacles to Agricultural Exports in Arab Countries • Exports of Agriculture in the Arab region have suffered because of many reasons, including but not limited to: • Inability of Arab farmers to compete in more developed economies • Lack of agricultural policies and organization of agricultural communities • Indirect trade barriers • Disproportionately large domestic support protection measures, particularly in the EU and US • The Economic and Financial Crisis and drop in demand • Misuse of the Special Agricultural Safeguard (SSG) by developed countries.

5. Food Shortage/Price Crisis • Increase in domestic demand has outweighed increase in foreign supply and pushed up prices. • Note: the original basis of the formation of the WTO was that free trade would ensure that there was more to share for everyone and in particular with respect to the right to adequate food. • Domestic supply has been limited for the same reasons that have limited export effectiveness. • Foreign supply issues include: • rapidly increasing oil prices and diversions of maize to ethanol production (decreasing food agriculture); • “hoarding” – storing crops to sell at higher prices – effectively causing a monopoly effect exacerbating price volatility; • Climate-related events like droughts, floods and environmental degradation have further hampered production and created negative effects on many developing countries ability to deal with the crisis. 5

6. Food Security Crisis • Price Volatility is a major factor in Food security crisis faced by developing countries • The extraordinary rise of global food prices in early 2008 posed a major threat to global food and nutrition security and caused a host of humanitarian, human rights, socio-economic, environmental, developmental, political and security-related consequences. • In particular, it presented challenges for low income food deficit countries and severely affected the world’s most vulnerable and threatened to reverse any gains made toward reducing poverty and hunger as outlined in the Millennium Development Goals (MDGs). • The sudden drop in prices or increase in volume would also devastate domestic farmers and their ability to be a safety net for the domestic demand. 6

7. Main Doha Agenda Sticking point - Special Safeguard Mechanism • Developing countries have demanded a Special Safeguard Mechanism to assist domestic producers and protect against price volatility to enhance food security. • The major sticking point of the Doha Round is the particulars of the modalities of the use of the SSM in both the Volume-Based and Price-Based SSM. • In short the main issues are: • The trigger point when the SSM can be invoked • Remedy available • Limited/limitless use of the SSM.

8. The Agreement on Agriculture and the Right to Food • The Report of the Special Rapporteur on the right to food, Olivier De Schutter of the MISSION TO THE WORLD TRADE ORGANISATION, claims that the current regime and the Doha Round will not prevent another food crisis because: • Increased reliance on international trade in order to ensure food security results in a dependency on international trade which leaves LDCs and developing countries vulnerable to the world price volatility. • Increased reliance on international trade reinforces highly concentrated transnational corporate actor and long supply chains (and subsequent transport) which has serious implications for climate change (pollution), human health and nutrition (perishable foods). • It must be stressed at all levels (international, national and CSO) that food security must be ensured at all times without exception. Tactics of some countries in limiting supply or disguising subsidies to their farmers is resulting in a deteriorating hunger situation amongst the world’s most vulnerable. • Any Doha agreement must address as its utmost priority to ensure the health and wellbeing of the world’s most vulnerable as per the inalienable human right to adequate food

9. Conclusions – Agriculture and the development in the Arab World • First and foremost, all negotiations on Agriculture in the Doha Round must focus on increasing food supply and ensuring food security. • Liberalization is method, not a goal. Even then, it is a method which has thus far failed to fulfill its purpose. • Protecting domestic industries is a priority to ensure the country’s food supply is safe and farmer’s livelihoods are protected. • The Green Box must be scrutinized in its entirety for the real effect on trade of those allegedly de-coupled payments. • The SSM must be allowed to be applied liberally by the developing countries to ensure price stability and allow the development of their agricultural industries and securing the food supply for their domestic demand. • Arab countries should promote and prioritize development of the agricultural sector including: • Orderly and reliable assessment of the impact of the WTO agreements and actions of other nations. • Those countries negotiating accession should ensure that they identify special safeguard measures and special products which they need to protect their industries and development goals. • Must invest in testing laboratories for food standardization and teaching farmers how to produce export quality foods. • Must provide support to famers in the form of technological assistance and advancements.