World Trade Organization Tackles Food Price Inflation, COVID-19, Agricultural Subsidies

The World Trade Organization met this week for its 12th Ministerial Conference. Issues on the table included everything from intellectual copyright for COVID-19 vaccines to negotiations over agricultural subsidies.

As the week ended, an agreement on subsidies for fisheries seemed close at hand.

Ngozi Okonjo-Iweala, WTO Director-General Director – General "We all know that a healthy, productive, sustainable blue economy is one where our oceans are replenished, where our fish stocks are also healthy, and where fishermen and fisherwomen who depend on such resources continue to earn a decent living…I just want to say that we have come quite a long way. And even that to me, I can see today, I cannot have imagined we would move along so fast a year ago. So there is considerable advance and we hope we can land this.”

After more than 20 years of negotiations on the issue, more than a few diplomats were optimistic about reaching an agreement.

Director General Ngozi Okonjo-Iweala was also hopeful about the possibility of further discussion on agricultural subsidies. Any kind of agreement has remained elusive since the failed attempt to make a deal during the Doha negotiations more than a decade ago.

Ngozi Okonjo-Iweala, WTO Director-General Director – General “A trust deficit has existed dating back to the breakdown of the Doha round, and even before, took its toll.”

The WTO chief insisted that trade has lifted 1 billion people out of poverty, but poorer countries – and poor people in richer ones – are often left behind.

In other trade deals across the globe, several countries have joined together to help mitigate food price inflation. The United State Meat Export Federation is reporting that South Korea has joined Mexico, the Philippines, Taiwan, Vietnam and Brazil in lowering or eliminating a few food-trade tariffs. Some of the cuts build on previous agreements already in play.

Erin Borror, Vice President of Economic Analysis, USMEF: Mexico eliminating tariffs on beef, pork and poultry, that’s a bigger step than we’ve seen from them in the past.

Korea’s announcement is a duty free quota on pork that is expected to be 50,000 metric tons. The move will help many nations, several of which have yet to negotiate Free Trade Agreements or FTAs with the republic.

Erin Borror, Vice President of Economic Analysis, USMEF: Brazil and Mexico are expected to be the potential big beneficiaries of that duty free pork quota that’s been announced. That’s because they pay the 25 percent tariff on frozen, 22.5 percent on chilled, which is relevant just for Mexico, and even for Canada that has an FTA with Korea, their 8.6 percent tariff this year.

U.S. producers already benefit from the 2012 Korean U.S. trade agreement or KORUS. The tariff for U.S. pork imports to South Korea are now zero while beef imports to the Southeast Asian country are charged a 10.5 percent duty. Provisions in KORUS will cut that tariff to zero in 2026.

For Market to Market, I’m David Miller.