11 Jun 2024    Other
Häberli, Christian

Novel Approaches in Sustainable Food Trade

Blog by Christian Häberli (PhD, Law, WTI, MATS)

What’s this?

On 24 May 2024, a Joint Webinar on the evaluation and possibilities for more sustainable agri-food trade took place at the Environment House in Geneva. The three organisers (two EU Horizon2020-funded projets Making Agricultural Trade Sustainable (MATS) and Trade for Sustainable Development (Trade4SD) and the International Institute for Sustainable Development (IISD)) shared and discussed several new topical databases and modeling approaches. They also noted that SDG 2 (“End Hunger”) was failing, and that the two last Ministerial Conferences on Trade (WTO MC 13) and on Climate (UNFCC COP 28) had concluded without tangible progress. In a Joint Statement, the participating experts agreed that the new techniques and insights into agricultural trade policy analysis allow a more realistic impact assessment of trade and investment policies on sustainable development, and that our projects can better inform and interact with policy-makers, operators and stakeholders.

My Questions

My contribution tried to answer the following questions: Are we really committed to working for a more sustainable and equitable food system? Do we recognize the vital role of agri-food trade in global food security and economic growth? Do we agree that SDG2 (“End Hunger”) shows dismal progress? And that Global Food Security is regressing, and famine increasing? Is this so mainly because of the new, existential threat added by Climate Stress especially for the Food Value Chain? Can our Case Studies, data modelling and research results say something about the adequacy of the climate and the trade treaty rules, commitments, and policies? Or do we have to recognize that governments and international organisations fail to address the problems by revisiting the present rules and engaging in multilateral negotiations?

My Sad Analysis of the Multilateral Stalemate

  • The ground impact of international governance failures, especially with regard to food security, appears in our MATS Case Studies now being published on our website. Virtually all 15 found non-sustainable food trade in their products and countries, and SDG getting out of reach for small producers and poor consumers.
  • In the short and medium term, no multilateral or unilateral improvements look possible or even wanted. In fact, both trade and climate rules are inadequate. Nevertheless, governments still fiddle on the roof while New York, Geneva and Paris are burning.
  • The SDG Mid-Tem Review in the UNGA, in September 2023, found general failure to achieve any SDG by 2030. Moreover:
    • COP28 for the Climate Agreement was a further step back from the standard-setting task called Koronivia Joint Work on Agriculture (KJWA), initiated in 2017 in Fiji. Climate ministers still refuse to set binding climate footprint reduction standards and procedures.
    • MC13 was yet another result-free WTO event. Trade ministers claiming “mutual supportiveness” with non-trade rules balk at a negotiation to define WTO-compatible, climate-friendly energy or food subsidies.
  • In short, governments refuse to engage in multilateral negotiations, especially about global food security. It seems they will ‘talk the talks’ for many more years, and in many international fora. (Just for once, agriculture is in good company with many other progress blockers – not least with fossil fuel subsidy addicts.)
  • Agricultural policy reforms and market access improvements for more climate and trade friendly food security have become a remote target. Investors also need standards – not guarantees like Bilateral Investment Treaties condoning land grabbing and contracts with “stabilisation clauses” against higher environmental regulations or minimum wage increases.
  • In 2023, the number of people on the brink of famine almost doubled to over 700’000. The symbol of the winner is the big tractor rolling in the streets of Brussels, Paris, Berlin, and Amsterdam – and not only in Europe. Farmer protection, ‘green’ subsidies and trade restrictions such as ‘mirror clauses’ for imports of ‘like’ products topple the cake – and thus upset the multilateral apple cart. Ministers refuse to switch into negotiation mode for production subsidies, price support, stockpile management, safeguards, and dumping rules – let alone in-built climate footprint and mutual recognition of equivalent production and processing methods.
  • Year-long ‘conversations’ failed to take on board the views of NGOs, scholars, stakeholders, traders, and investors in more food secure ventures. Policymakers ignore sustainability impact assessments of the various tools at hand in the light of new challenges to global food security and global warming.
  • Making a list of what all others should do has not brought progress. The double intergovernmental impasse in this rapidly warming world clearly requires novel approaches. Inaction discourages operators and investors; it is simply not a defendable option.

In my view, collective governance failures are the main reason for the impasse of the multilateral rules framework today. Both for trade and climate rules, especially those contradicting each other. I see the main challenge as navigating the abyss between the differentiation obligation of the Climate Agreement and the non-discrimination mantra of the multilateral trading scheme enshrined under WTO Law.

Any Way Forward out of the Impasse?

Today, multilateralism is deadlocked and formal agri-food trade and climate negotiations are indefinitely suspended. This seems to preclude binding multilateral standards or plurilateral agreements. It also impairs unilateral measures protecting green producers at home and thus discriminating foreign competitors. Who wants to lose market shares when foreign e-vehicles, solar panels and cows and soybeans from deforested areas are cheaper?

True, we can see many governments starting to act at the national level – for whatever reason and never mind their climate commitments or multilateral and regional trade obligations. Some such reforms are more than greenwashing. But unilateralism and industrial policies fail to reassure small and big producers, investors and traders. Instead, they bring about carbon leakage and market share losses for greener food.

Is there a novel and beneficial approach for ‘climate pioneers’? Allowing domestic greening with carbon taxation including imports à la CBAM? When not everybody goes greener at the same time and for the same products? Without new climate-friendly multilateral rules and SDG changes?

Personally, I posit that unilateral reforms, reciprocally agreed and WTO-guaranteed, can bring about “Greener and Freer Trade” for climate pioneers. Put in technical speak, a safe way out of this complex stalemate is to endow the often heard ‘climate club’ proposals with reciprocal, scheduled trade preferences and investment guarantees, secured and based on mutually agreed equivalent, sustainable climate footprint reduction schemes, and new rules of origin – including even agriculture. Regrettably, reciprocity is a big step back from the Voie Royale of multilateral rulemaking. Only ‘climate pioneers’ will benefit from this proposal. But when the multilateral road is closed – and its rules are not enforceable – this second best option is perhaps the only way forward. Better than fiddling on the roof, anyway. Or playing the blame game, again and again.

Geneva, 6 June 2024

Novel Approaches in Sustainable Food Trade