Heads of global bodies – including WTO – say trade facilitation a key part of food crisis solution

Mon 18 Jul 2022
Posted by: Phillip Adnett
Trade News

Multiple intergovernmental organisations have called on national governments to combat the global food crisis by facilitating trade and supporting international supply chains.

A joint statement by the heads of the Food and Agriculture Organization (FAO), International Monetary Fund (IMF), World Bank Group (WBG), World Food Programme (WFP) and World Trade Organization (WTO) said short and long-term actions were needed.

Four-point plan

A statement outlined four action points:

  • providing immediate support to the vulnerable
  • facilitating trade and international supply of food
  • boosting production
  • investing in climate-resilient agriculture

Reducing barriers

According to the statement: “The 2008 crisis taught us that imposing global trade restrictions leads directly to increases in food prices.”

The leaders also called for more flexible inspection and licensing procedures to lower prices and reduce disruptions to supply chains.

Rising insecurity

The number of ‘acute food insecure’ people increased to 345m in 82 countries, according to WFP.

The situation has been worsened by about 25 countries that have reacted to higher food prices by adopting export restrictions affecting more than 8% of global food trade.

The doubling of fertiliser prices in the last twelve months has also affected production, the statement claims. The bodies have called on global stocks to be released to bring prices down.

Strong words

International finance chiefs meeting at the G20 summit in Indonesia have “strongly condemned” the war in Ukraine and expressed concern over an “alarming increase of food and energy insecurity” as a result of it, reports CNBC.

All members at the meeting — which included Russia and Ukraine — pledged to use all policy tools available to tackle the food crisis.

Challenging issue

US Treasury Secretary Janet Yellen said differences had prevented the finance ministers and central bankers from issuing a formal communique but that the group had “strong consensus” on the need to address a worsening food security crisis, reports Yahoo News.

“This is a challenging time because Russia is part of the G20 and doesn’t agree with the rest of us on how to characterise the war,” Yellen said, but stressed the disagreement should not prevent progress on pressing global issues.

“Many members stand ready to take prompt collective actions on food security, including by working with other initiatives,” a statement from the Bank of Indonesia said.

Russia’s finance minister attended the meeting virtually while his deputy attended in person.

Ukraine’s finance minister addressed the session virtually and called for “more severe targeted sanctions”.

Unblock exports

International Chamber of Commerce (ICC) secretary general John W.H. Denton welcomed a G20 decision to establish a forum to tackle growing global food insecurity crisis.

However, he said it would “only have real value if key G20 governments take action to unblock agricultural exports from Ukraine and reverse their recent export bans on staple commodities”. 

“Absent of a pragmatic solution to allow the G20 to take decisions despite the continued participation of the Russian Federation, the world risks sailing rudderless through an unprecedented global cost of living crisis,” he added.