WTO Rules and Food Crisis in

the Least-developed Countries

Policy Reflection Co-organised by the LDC Group

in the WTO with CSEND Trade Policy Governance
Group & Diplomacy Dialogue

Introduction by Christian Häberli, Ph.D.

World Trade Institute (Bern)
17 July 2008 (Geneva)
Cyclical and Structural Causes of the
present food crisis coincide
Cyclical causes: Structural developments:
 droughts and floods  Demography
 low stocks  Tigers eat meat
 currency fluctuations (China, India etc.)
 export restrictions  Oil barrels at $150
 speculation (?)  (Subsidised) Biofuel
 Water shortages
 Climate change

080717 CSEND Christian Häberli 2

 Double impact on NFIDCs
The end of cheap food (international food aid,
export subsidies and price support in rich
countries are down) :
• Hunger strikes millions without purchasing power
• Urban poor without means to satisfy other
essential needs (health, housing, schools)
☝good news for poor farmers?
• Rural poor without means and incentives to
produce more
☛ no surprise:
WFP warnings of more famines
ICRC warnings of more wars
080717 CSEND Christian Häberli 3
 Everybody is responsible
• IBRD now warning 33 governments may fall and
calling for $500m in food aid – but only 2 years
ago discovered agriculture as a worthwhile area of
investment
• FAO focus on summits?
• G8/OECD promising aid but no end to decade-
long market distortions hurting poor farmers
• Many NFIDCs enjoyed cheap food at the expense
of their farmers or even taxing exports
• Some exporters restrict exports for their own
food security
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 WTO: Politics vs. Economics
Global vs. national welfare and „policy space“:
• Trade liberalisation increases food security –
overall but not at home
• Shifts from Amber to Blue and Green will not
increase food security
• Refusal to bind present zero import duties; G33
needs Special Products for food security
• Refusal to lift export taxes and restrictions (small
revision GATT-Art.XI:2 in Falconer modalities)

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 Outlook
World food production for > 7bn meat eaters needs
more
• production investment and technologies
• trade liberalisation and regulation including
prohibition of taxpayer support to staple food
• regional food security stocks financed by rich
importing countries
• genuine food aid financed by food+oil price gains
☛ The whole WTO Membership must stand up
to all these challenges!

080717 CSEND Christian Häberli 6

Note: This publication has been made available by CSEND with the agrement of the author.

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