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Brazil has launched the idea of a major worldwide commitment for countries to let agricultural products flow in global markets, despite international sanctions against Russia and problems caused by lockdown measures in China, in discussions at the World Trade Organization (WTO).
The situation has become much more complicated, blocking the free flow of food, and could result in a new crisis. Many companies fear their ships will suffer from explosions in the Black Sea, insurance is more expensive, the lack of containers has increased with the situation in China as well and inflation is still rising in different parts of the world.
The idea Brazil is discussing with several other countries is that, just as humanitarian corridors exist, emergency corridors should be established to ensure the continuous flow of food and essential raw materials and inputs for cross-border food and agriculture production, including fertilizers.
With these corridors, it would then be possible to move certain commodities from Ukraine and Russia, for example. And countries like Brazil, which need fertilizers, will have the input to produce surpluses and help feed the world, as one source notes.
Ukraine and Russia account for less than 3% of world merchandise trade, but are important in certain sectors, such as food. About 30% of the world’s wheat and 73% of sunflower oil comes from the two countries, along with a lot of barley, corn and other grains.
Several regions of the world are heavily dependent on the Black Sea region. In Africa, 35 countries import food from Russia and Ukraine. The United Nations Conference on Trade and Development (UNCTAD) has warned that the new price spike is collateral damage from the war in Ukraine, which could undermine political stability and food security anywhere in the world.
The idea of emergency food corridors was mentioned today by Alexandre Parola, the Brazilian ambassador and permanent representative to the WTO, during the General Council of the organization.
For the Brazilian representative, food security will be the most important issue during the conference of trade ministers of the 164 member countries, scheduled for June in Geneva.
In Brazil’s view, this will be an opportunity to address the issue of agricultural reform in the near future, recognizing that the availability of and access to food necessarily requires international trade of agricultural products. The discussion also involves poorer countries, particularly affected by the rising bill for food imports.
For Brazil, in the face of the current emergency, it will also be necessary for countries in the WTO to reach an agreement to avoid the banning or restriction of food exports normally purchased for humanitarian reasons. One problem is the resistance of India, which is more focused on ensuring more flexibility on how to release its food stocks to the international market.
After the June ministerial conference, Brazil advocates that the WTO Committee on Agriculture discuss texts to structurally strengthen food security and sustainable development. In Brasília’s view, the effects of the recent crises and the current context have made it more urgent to negotiate disciplines that can help improve food security, in accordance with the obligation of Article 20 of the WTO Agriculture Agreement to agree on “substantial progressive reductions in support and protection.”
Source: Valor International