This presentation was made by Carin Smaller, IISD Virtual Policy Dialogue on Trade and Food System Shocks

1. How Could Trade Policy
Better Address Food
System Shocks?
Thursday 20 May, 2021
Jonathan Hepburn, Kulthoum Omari-
Motsumi, Carin Smaller & Zakaria Zoundi

2. Rules of the game
● Keep your microphones muted at all times,
unless you are making an intervention
● Use the “raise hand” function if you would like
to make an intervention
● Kindly switch on your video when making an
intervention
● For technical help- contact Kiranne
How Could Trade Policy Better Address Food System Shocks? | May 20, 2021

3. Carin Smaller- Director, Agriculture, Trade &
Investment, for the Economic Law and Policy
program in IISD. She advises governments and
parliamentarians on law and policy issues related
to foreign investment and trade in agriculture
How Could Trade Policy Better Address Food System Shocks? | May 20, 2021

4. Jamie Morrison- Director, Food Systems and Food
Safety Division, FAO. He is responsible for
research, capacity development and technical
assistance in trade and economic policy reform on
food security.
How Could Trade Policy Better Address Food System Shocks? | May 20, 2021

5. How Could Trade Policy Better Address Food System Shocks? | May 20, 2021
1. Why this paper,
and why now?
• COVID-19 pandemic…
• … but also climate change,
extreme weather events.
• US-China trade war…
• …shocks are the new norm.

6. How Could Trade Policy Better Address Food System Shocks? | May 20, 2021
2. How are food system
shocks the new norm?
• COVID-19 pandemic
• Southern Africa
drought, 2015-16
• US-China trade war

7. How Could Trade Policy Better Address Food System Shocks? | May 20, 2021
3. How can we rethink trade
policy to respond to food
system shocks?
• Need comprehensive,
forward-looking approach to
trade rules…
• …. not least as climate
change means the future may
not resemble the past.

8. How Could Trade Policy Better Address Food System Shocks? | May 20, 2021
• That provide countries with the
tools they need to respond to
shocks…..
• …. but without harming
producers and consumers
elsewhere
• Major exporting + importing
countries have a particular
responsibility for the stability
of the global food system
Photo credit: IPCC, 2014

9. How Could Trade Policy Better Address Food System Shocks? | May 20, 2021
4. What trade policy toolkit
do we recommend?
1. Ensuring access to food for poor
consumers
2. Safeguarding farmers’ livelihoods
3. Improving how food markets
function
4. Rebuilding trust and confidence
13 ideas to achieve 4 public policy objectives:

10. How Could Trade Policy Better Address Food System Shocks? | May 20, 2021
4.1 Ensuring access to food for poor consumers:
1. Need to fast-track action on export restrictions + WFP food aid
2. New rules on export restrictions could improve stability + predictability….
New rules on export restriction
Fig.1: share of restriction by importer
Source: IISD/IFPRI, “How Food Export Restrictions Could Worsen a Looming Food Crisis”. IISD/IFPRI, July 2020.

11. How Could Trade Policy Better Address Food System Shocks? | May 20, 2021
3. Cutting high ‘tariff peaks’ on key farm goods in major importing countries
could help improve the stability of food markets when shocks do occur.
… and better rules on import restrictions
Ag products: import value + maximum bound duty (logarithmic scale)

12. How Could Trade Policy Better Address Food System Shocks? | May 20, 2021
4.2 Safeguarding farmers’ livelihoods
1. Despite the negotiating deadlock, a new SSM could help address volatility…
2. … but its design should reflect underlying objectives.
3. Countries with lower bound tariffs may have greater need for a safeguard.

13. How Could Trade Policy Better Address Food System Shocks? | May 20, 2021
4.3 Improving how food markets function
Weak farm subsidy rules undermine efforts to improve the
sustainability and efficiency of production + consumption patterns…
0
2,000
4,000
6,000
8,000
10,000
12,000
USD
millions
Product-specific support in selected major economies
US (2016) EU(2016-17) China (2016) India (2017-18)
Brazil (2016-17) Japan (2015-16) Russia (2017)
Source: IISD and IFPRI calculations, based on WTO notifications. Figure shows amber box and ‘de minimis’ support. Presented in “What National Farm Policy Trends Could Mean for Efforts to
Update WTO Rules on Domestic Support”. IISD/IFPRI, March 2020.
Notes: As countries use different product classification systems to report product-specific support, similar products have been grouped together for the purposes of this graph. The figures
include amber box and de minimis support, but not product-specific blue box support.

14. How Could Trade Policy Better Address Food System Shocks? | May 20, 2021
… BUT a food systems approach means going
beyond ag markets
1. Harmonize levels of ag domestic support across
countries over time
* cap + cut support classed as trade distorting
* allow all countries to provide minimal levels
2. Use existing options to support farmers without harming
those elsewhere;
3. Reverse under-investment, esp. in low-income countries
* Malabo
* public goods

15. How Could Trade Policy Better Address Food System Shocks? | May 20, 2021
1. MC12: adopt forward-looking work program boosting
resilience to shocks
2. WTO Appellate Body crisis: help unblock deadlock
3. Engage in other forums: UNFCC, UN CFS, UN Food
Systems Summit, , G20, etc…
4. AMIS: support + expand
What could be done to rebuild trust and confidence?
4.4 Rebuilding trust and confidence

16. How Could Trade Policy Better Address Food System Shocks? | May 20, 2021
Further reading:
IISD, March 2021
How Could Trade Policy Better
Address Food System Shocks?
bit.ly/food-system-shocks

17. THANK YOU!
May 20, 2021
Comments, questions and feedback are welcome:
csmaller@iisd.org