Steve Suppan, Institute for Agriculture and Trade Policy

Kathy Ozer, National Family Farm Coalition

Topic: "Trade, Food Distribution and Economic Policy." The bearing of trade and economic policy upon international food security is a topic of great controversy, particularly as it pertains to low income, net-food importing developing countries (LIFDCs). Sub-elements of this topic include trade policy formulation, trade policy implementation, infrastructure support for negotiation of and participation in multilateral trade agreements, structural adjustment programs (SAPs) in agricultural planning (including the "Green Revolution" and its progeny), and policy conditionality on concessional food programs, such as P.L. 480, the "Food for Development" program, a subject of criticism at the Ames, Iowa consultation .

Background: In the 1980s, international commodities agreements and commodities prices for developing countries exports (with only slight recovery in the 1990s) collapsed to levels below the worst years of the Great Depression (e.g. as documented in Alfred Maizel's Commodities in Crisis ). Many experts consider this collapse to be the principal cause of the "lost decade for development." The charting of this price collapse varied little among the United Nations Conference on Trade and Development, the International Monetary Fund and the World Bank.

International Financial Institution (IFI) SAPs advised governments to restructure their agriculture sectors to provide greater support for exports and diminish support for small producers selling to local markets. After following such advice, the commodities price collapse plus the higher costs of "Green Revolution" inputs left developing country governments with less to invest in domestic food security. SAP conditionalities and trade liberalization policies were designed to "let the market rule," which it did with the result of declining terms of trade for developing countries. Many other causes, such as those outlined in studies by the International Food Policy Research Institute, intervened to produce greater food insecurity in LIFDCs and many other developing countries. However, many of these causes of food insecurity have their roots in the declining economic strength of a significant majority of developing countries.

Developing country trade representatives to the Uruguay Round of the General Agreement on Tarifs and Trade were very aware of the extent to which trade liberalization and SAP loan conditionalities in the 1980s had imperiled and could continue to decrease food security. Therefore, they insisted upon a kind of food security safeguard as a condition for signing the Uruguay Round agreements. The safeguard is called the "Marrakesh Ministerial Decision Concerning the Possible Negative Effects on the Reform Programme on Least-Developed and Net Food Importing Developing Countries."

The World Trade Organization Committee on Agriculture (CoA) is authorized to decide whether and how to implement the forms of food and technical assistance outlined in the Decision. Two factors cited in favor of implementation were the sharp increase in the food import bills of Low Income Food-Deficit Countries (LIFDCs) after the signing of the Uruguay Round agreements, and a fall in food aid that has alarmed LIFDCs, NGOs and the grain trade press itself. On October 28, 1996, the CoA decided not to implement the Marrakesh Decision, despite WTO Director General Renato Ruggiero's call for implementation. Instead the CoA encouraged LIFDCs to borrow from existing IFI facilities and to make use of developed country aid to improve agricultural production and infrastructure. The World Food Summit Plan of Action calls for implementation of the Marrakesh Decision

Next year's CoA review of the Marrakesh Decision may result in some multilateral assistance for LIFDCs, as called for by NGOs at a food security seminar in March 1997 in Aachen, Germany. The Aachen seminar concluded that "[t]he implementation of the Marrakesh Decision should not be tied solely to the proof that price increases and the inadequacy of the availability in the supply of basic foodstuffs are directly linked to the reform process of the WTO Agreement. Instead, all parties involved should take a much broader angle of vision of the problem and view the commitment in the perspective of improving global food security." At present, however, there is little agreement between the U.S. government, agribusiness corporations, and NGOs about how to analyze the relationship between trade policy and food security, much less agreement about how to implement the results of such an analysis.

The U.S. cites food security as the justification for introducing new issues in the next WTO agricultural negotiations, including further protections for patent holders of agricultural biotechnology. U.S. Secretary of Agriculture Dan Glickman, in a speech to the International Grains Council on June 19, 1997, under the section of the speech titled "Biotechnology," stated "[at] its heart, freer agricultural trade is about feeding the world." He then contended that only through trade in genetically modified organisms could the world be fed. The U.S. government seeks to "feed the world" by disseminating a Second Green Revolution of agri-biotechnology through such programs as the U.S. Aid for International Development Agency's African Food Security Initiative for "Ethiopia, Mali, Uganda, Malawi and Mozambique - whose governments have begun policy and structural reforms" -- or the "African Growth and Opportunity Act," which received the support of Cargill chairman, Ernest S. Micek. U.S. NGOs have testified against exclusive reliance on the "trade not aid" approach of U.S. government initiatives in Africa, but thus far with little effect.

Issues: The U.S. position at the World Food Summit and such "trade-not-aid" initiatives as the U.S. Trade Representative's comprehensive trade and development report for sub-Saharan Africa, is that development and food security is the responsibility of national governments and their peoples. However, such a designation of responsibility does not confer the degree of autonomy, authority and infra-structural support necessary to carry out such responsibilities. The lack of transparency in the trade policy agenda-setting process has marginalized LIDFCs and most developing countries. Few developing countries have any opportunity to influence, much less determine, the trade formulation and implementation process that affects national and household food security.

At the December 1996 WTO Trade Ministerial in Singapore, most developing country representatives were excluded from consensus-building "informal" meetings that determined what was discussed and what wasn't. At the close of the Ministerial , Director General Ruggiero responded to developing country and NGO calls for discussion of developing country issues by promising greater developing country participation in the agenda setting for the May 1998 Trade Ministerial in Geneva. Yet once again, in the April 1997 meeting of the self-designated "Invisible Committee" chaired by Deputy U.S. Trade Representative Jeffrey Lang, issues of importance to most developing countries were not on the agenda. Neither were LIFDCs represented. Given the past history of the "Invisible Committee," it is not likely that such issues as the call to eliminate U.S. barriers to LIFDC country exports (cited in the Lincoln, Nebraska consultation) will be discussed at the Geneva ministerial. Given the present unwillingness of the U.S. and other developed countries to discuss and negotiate issues of importance to developing countries, developing countries are resisting discussion of policies that could benefit them.

If the government's trade and food security policies are to gain more credibility with civil society, then organizations other than corporations must be given equal access and facilities to debate and formulate policies that affect them as workers, consumers and in other socio-economic social roles. Procedures for determining adequate forms of representation among NGOs to various international negotiating fora need to be determined. NGO experience in food security programs could help advise trade policy formulation and implementation on how to use trade policy to foster greater food security. Such advice could help avoid such food security crises as that experienced now by Mexico, despite its growing agricultural trade with the U.S.

Proposed actions:

• Implementation of the U.S. Action Plan on Food Security should be carried out by a broader interagency team than the current representatives from the USDA, State Department and U.S.A.I.D. To facilitate greater integration of trade and economic policies in the pursuit of food security, representatives from the U.S.T.R., Commerce, Health and Human Services, the Environmental Protection Agency, and the U.S. delegations to the WTO and United Nations should be added to the food security implementation team that will meet with the NGO Advisory Council to the U.S. Action Plan.
• This interagency team and the Advisory Council should recommend to the WTO CoA that the Marrakesh Decision should begin to be implemented at the May 1998 WTO Trade Ministerial. By March 1998, the interagency team and Advisory Council should draft an initial advisory opinion for the U.S. representative to the CoA about what forms of assistance should be given to LIFDCs per the Marrakesh Decision and how to coordinate this assistance with U.S. obligations under a renegotiated Food Aid Convention. The Congressional Budget Office and the Office of Management and Budget will provide to the interagency team and the Advisory Council good faith estimates both of the costs of recommended forms of implementation and of anticipated savings of implementation compared to the costs of past emergency food aid interventions in LIFDC countries. The interagency team will use these good faith estimates in their presentations to the relevant Congressional committees and subcomittees. Both the interagency team and Advisory Council should have full access to papers on implementing the Marrakesh Decision and on renegotiating the Food Aid Convention. At least two representatives from the Advisory Council should be invited to observe CoA meetings on the Marrakesh Decision and Food Aid Convention negotiations.
• Also by March 1998, the interagency team and Advisory Council should draft an initial plan for the U.S. representatives to the May 1998 Trade Ministerial to improve food security per the World Food Summit Plan of Action.
• The interagency team and Advisory Council should draft a recommendation for the preparatory meetings to the WTO Trade Ministerial that the United States will support the formation of a WTO Working Group on Trade and Food Security. This Working Group will be charged with ensuring that WTO rules and sanctions not contravene the implementation of the World Food Summit Declaration of Principles and Plan of Action, and other international commitments made by WTO members towards achieving food security objectives. The interagency team and Advisory Council will report annually to Congress on the Working Group meetings, and will recommend what the United States can do to improve the Working Group's program both with respect to other WTO Working Groups and Committees, and with respect to intergovernmental and non-governmental organizations working towards fulfilling internationally recognized food security objectives and benchmarks.
• The U.S. government should support politically and financially the recommendation of the Joint NGO Statement at the Singapore Ministerial that "[a]ssistance should be provided to smaller and poorer countries to enable them to set up adequate capacity in Geneva and in the capitals to participate in negotiations in the WTO." (para.81) Such assistance could be drawn from augmented WTO funds to provide technical assistance to develop the "capacity to trade." The target date for beginning to provide such assistance, including electronic infrastructure, should be no later than February 1998, to allow developing countries, particularly LIFDCs, to make minimal preparations for the May 1998 Trade Ministerial.
• Formalize NGO access to providing input and exchanging information in trade policy formulation on a par with the working relations presently enjoyed by business representatives and their lobbyists. For example, NGOs should have broader participation on both the President's Agricultural Policy Advisory Committee for Trade and on the Technical Agricultural Advisory Committee for Trade. On both these committees, the impact of trade policy formulation, negotiation and implementation on food security should be a standing agenda topic. Farmers' organizations, consumers' organizations, and other groups with expertise and constituencies pertinent to improving food security can best use this expertise and constituency support, if they have access to the trade policy process currently afforded only to agribusiness representatives and the American Farm Bureau Federation. This action could be carried out at a minimum of expense to the government, and could offer government representatives information about food security impacts in such working groups as Sanitary and Phyto-sanitary Standards, Intellectual Property Rights and Market Access. The target date for beginning discussions towards formalization would be December 1997.