. Urges coordinated action on high commodity prices, food insecurity
By Victor Uzoho
As the war in Ukraine continues to raise concerns about the vulnerability of global supply chains, the World Trade Organisation (WTO), has called for deeper and more diverse international markets to ensure supply resilience.
This comes amid the calls to relocate production and sourcing locally to ensure stable supply of critical goods and staples.
But the Director-General, WTO, Ngozi Okonjo-Iweala, while speaking at an informal meeting of the General Council yesterday, said concentrating on sourcing and production at home could create new vulnerabilities and may not be the best risk management strategy.
She argued that trade has been and would remain a critical means of adaptation to the mounting global shocks that the world is currently experiencing, saying: “this is not the time to retreat inward” but “the time to stress the importance of multilateralism, global solidarity and cooperation.”
“Concentrating sourcing and production at home, while understandable, could also create new vulnerabilities and may not be the best risk management strategy. A region’s wheat crop could be destroyed by drought, flooding, or other weather-based phenomena. A harsh winter and an earthquake could knock out electricity and factory production.”
This is not the time to retreat inward, but the time to stress the importance of multilateralism, global solidarity and cooperation.
High prices
Also, Okonjo-Iweala called for coordinated action to address the recent sharp rise in commodity prices that threatens food security in many countries.
She noted that the war in Ukraine has dealt a severe blow to the global economy, and has raised the spectre of food shortages in countries dependent on Ukraine and Russia for imports of key staples like wheat.
“For dozens of poor countries and tens of millions of people, basic food security is in danger. These countries already have seen some of the slowest economic recoveries from the pandemic, and international cooperation on trade is necessary to help mitigate risks of poverty, hunger, even famine and social unrest,” she said.
Meanwhile, the Director-General disclosed that the UN Secretary-General has set up a three-tiered steering committee involving heads of government, heads of international organisations and technical experts to deal with the issue of surging energy and food prices.
She explained that the WTO is expected to play a key role in finding solutions to the food crisis, noting that the chair of the WTO’s agriculture negotiations, Ambassador Gloria Abraham Peralta of Costa Rica, was planning a food security conference that would take place at the end of April.
She continued: “WTO Secretariat staff have also been carrying out analysis on food security issues, which will be shared with members shortly. We at the WTO have a solid basis on which to consider workable solutions to the present crisis.
“In the near-term, international cooperation on trade will be needed to minimize the impact of supply crunches for key commodities where prices are already high by historical standards and to keep markets functioning smoothly.
“While only 12 members have imposed export restrictions on food to date, coordinated government action is needed to avoid a repeat of the cascading export restrictions that exacerbated the rise of food prices in the crisis of 2008-2010,” the Director-General added.
Prompt notification and information sharing regarding food supplies and stockpiles can help the international community better manage the situation and keep markets functioning more smoothly.
Furthermore, she called on countries with buffer stocks that can afford to share to coordinate the release of wheat, barley, other cereals and grains, and oils into the international markets, thereby alleviating the supply squeeze.
“Countries such as the United States, Canada, Australia, Argentina, and France could increase wheat cultivation, while others such as China, Germany, Morocco, Saudi Arabia, Egypt, and Nigeria could increase the global supply of fertiliser.
“Africa, with plentiful land and other resources can also take steps to produce more food itself by using more adaptable varieties of wheat, maize and other crops.
“Trade facilitation measures could also be brought into play to ease the free flow of goods, while efforts should be made to allow the UN’s World Food Programme full access to humanitarian purchases.
“Prompt notification and information sharing regarding food supplies and stockpiles can help the international community better manage the situation and keep markets functioning more smoothly.”
