Bridges Weekly Trade News Digest • Volume 12 • Number 15 • 30th April 2008

Japan, Switzerland Propose Stronger WTO Curbs On Use Of Food Export Restrictions

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With developing countries around the world placing curbs on agricultural exports in an attempt to deal with skyrocketing food prices, Japan and Switzerland this week called for tightening WTO rules on the use of export restrictions on foodstuffs. In an informal paper dated 30 April, Japan and Switzerland proposed constraining countries’ ability to restrict food exports, and requiring them to consider how such policies affect countries that depend on food imports. Specifically, they called for a Doha Round agreement to require “any new export prohibition or restriction [to] be limited to the extent strictly necessary” for the country imposing it, in light of production, stocks, and domestic consumption. The proposed rules would oblige countries seeking to restrict exports to give “due consideration” to importers’ food security, and look at how trade would have flowed in the absence of restrictions. They would also have to how food aid for net food-importing developing countries would be affected. Countries would be required to notify the WTO Committee on Agriculture before instituting export restrictions, explaining the nature, duration, and reasons for the measures. Furthermore, governments would be required to consult with importers about “any matter related to the proposed” export restriction, with the implementation of the planned measure stayed pending the consultations. And if the differences cannot be resolved within a certain period of time, the proposed export restriction would be referred to binding arbitration by a “standing committee of experts.” The new proposal would go well beyond the rules on export restrictions present in the current version of the draft negotiating text under consideration in the agriculture negotiating committee. Based on a proposal from the G-20 group of developing countries, that text would require the WTO to be notified within 90 days after - not before - the imposition of export restrictions. It called for export restrictions to normally last no longer than one year, with importers’ consent required for measures that last longer than 18 months - a limit that Japan and Switzerland would like discussed further. In initial reactions, G-20 members have expressed a preference for their own proposal, viewing the advance notification requirement as problematic. Japan and Switzerland are both major food importers, though known for their jealously protected farm sectors. As rice producing countries have moved to curtail exports, importers such as the Philippines and Bangladesh have been unable to buy the amount of the grain they wanted on international markets (see BRIDGES Weekly, 23 April 2008, http://www.ictsd.org/weekly/08-04-23/story1.htm). Export restrictions are a double-edged sword: though they may bolster domestic supplies to help keep costs within control, they also undermine farmers’ incentives to step up future production. Joachim von Braun, the head of the International Food Policy Research Institute, has called export bans “starving thy neighbour” policies. ICTSD reporting.