Tuesday, December 10, 2013

WTO deal excludes food aid disciplines

The deal reached over the weekend for world trade does not include proposals to incorporate voluntary food-aid guidelines.

That means that countries, such as the United States, can continue to pay lip service to the guidelines, but continue to flout them across a broad front of issues.

Canada has signed on to the voluntary guidelines for decades and has been abiding by them.

Others who signed on to an extension of the voluntary guidelines effective last Jan. 1 are Japan, the European Union, Switzerland and Denmark.

If and when the guidelines are incorporated within the World Trade Organization agreements, nations will be held to account to implement the guidelines. They could face penalties for failure to comply.

For the United States this would mean many changes that would basically require it to shift the focus of its food aid from benefitting its farmers, shipowners, union members and grain-handling companies to doing what’s best for the people in need of the food aid.

For example, instead of growing rice across the Southern United States with billions of federal government subsidies and shipping so much into poor countries that it undermines incentives to grow food locally, the guidelines call for donor countries to buy whatever they can as close as possible to where there is need, but without distorting markets.

The U.S. has often used food aid to dump surplus products so domestic prices will be held up, but sometimes that food is not appropriate to the needs and diets of the hungry recipients. For example, surplus skim milk powder is not very good for lactose-intolerant adults.

The guidelines call for donors to take into account local diets, appropriate commodities and nutritional needs.

The guidelines also call for the economical use of resources, such as shipping and grain handling. That would price U.S.-registered ships and union workers out of many contracts, but U.S. AID requires the government to use U.S.-registered ships and to employ union members.

Ryan Caldwell of the University of Manitoba says the failure to incorporate the guidelines, thereby putting teeth into the terms, is typical of the failure of the deal that has been reached to address the goals set when the negotiations began 12 years ago.

The aim then was to highlight agriculture reforms to reduce rich-country subsidies and tariff barriers which would make more room for developing nations to produce more food and earn more export revenues.

There were many studies which concluded that these trade reforms would be worth many times as much as all of the world relief and development put together.