Liberalizing trade in agriculture and food security - mission impossible?

• Author: Kaufmann, Christine

ABSTRACT

The Agreement Establishing the World Trade Organization (WTO) foresees that trade should be conducted with a view to raising standards of living. It is undisputed that raising living standards contributes to the implementation of the right to food. Indeed, state parties to the WTO have obligations regarding the right to food not only under the international trade system, but also under the human rights regime. All WTO state parties are bound by customary human rights law, and most have ratified the International Covenant on Economic, Social, and Cultural Rights, of which Article 11 contains the most important codification of the right to food. This Article analyzes the structural similarities between the legal regimes for trade and human rights. It concludes that the tools necessary to reconcile some of the potential conflicts between the two regimes are already built into the agreements. Building on this conclusion, this Article analyzes proposals on how to better implement food security in the current negotiations on agriculture.

TABLE OF CONTENTS I. INTRODUCTION II. THE LEGAL FRAMEWORK FOR TRADE IN AGRICULTURE A. Market Access B. Domestic Support C. Export Competition D. The Marrakesh Decision on Least-Developed and Net Food-Importing Countries III. THE LEGAL FRAMEWORK FOR THE RIGHT TO FOOD A. Legal Instruments B. State Obligations under the ICESCR 1. The Obligation to Respect 2. The Obligation to Protect 3. The Obligation to Fulfill C. Progressive Realization of the Right to Food IV. RECONCILING TRADE IN AGRICULTURE AND THE RIGHT TO FOOD A. Conflicts Between the Right to Food Security and Liberalized Trade in Agriculture B. Methods for Reconciliation--The 'Linkage' Debate C. Need for "Affirmative Action" to Ensure Non-Discrimination V. SHAPING THE FUTURE RULES OF TRADE IN AGRICULTURE A. Market Access B. Domestic Support C. Export Competition VI. CONCLUSION I. INTRODUCTION

Developments in food aid, the production of genetically modified foods and seeds, the use of foodstuffs to produce biofuels, and awareness of the cultural significance of certain foodstuffs are just a few of the elements that have led to heated discussions about the relationship between international trade and the right to food--especially food security. Taking into account the multifaceted nature of the above-mentioned elements, this Article attempts to shed light on the legal relationship between trade and food security, that is, between international trade law and the human right to food security.

The preamble of the Agreement Establishing the World Trade Organization (WTO) does not envision trade as an end in itself. Instead, it foresees that trade "should be conducted with a view to raising standards of living." (1) This objective, in language and in spirit, is close to the "adequate standard of living" (2) envisaged in Article 11(1) of the International Covenant on Economic, Social, and Cultural Rights (ICESCR). In fact, both the codification of human rights and what later became the General Agreement on Tariffs and Trade (GATT) have their common starting point in the Atlantic Charter, which contained a vision of a post-war world order resting on the four pillars of trade, finance, peace, and human rights. (3) Despite this commonality between ICESCR and the GATT, the liberalization of trade in agriculture and the right to food have nevertheless developed in very different ways.

Conflicts and tensions may arise at the implementation level. This is reflected in the widespread concern that the openness of agricultural trade may jeopardize food security in developing countries, for example by flooding local markets with imported products or even with goods

provided under the guised heading of food aid. (4) The concern is that exposure to international markets may increase the instability of food supplies and prices, disrupt markets, and undermine incentives for local production. (5) Yet from an economic point of view, empirical evidence on an aggregate country level "does not point to a negative relationship between agricultural trade and food security; on the contrary, a higher degree of openness to trade is associated with lower levels of undernourishment." (6)

The preceding statement is flawed in several respects. First, while this observation may hold true in general, it is also true "that some households lose in the process of trade liberalization," even in the long run. (7) Trade reform could also exacerbate poverty and therefore reduce food security temporarily. (8) Second, the concept of food security includes more than the alleviation of malnourishment; it refers to other factors such as culture or the survival of subsistence farmers. (9) Regardless of the complementarity of goals between liberalization of trade in agriculture and the right to food security at the abstract level, tensions may arise: even if there are overall gains at the national level, the impact on individuals can be negative. The liberalization of trade in agriculture is conceptually concerned with aggregate improvements in global welfare; the human right to food, on the other hand, grants a minimum standard to the individual that must not be violated, even at the price of an aggregate rise in the standard of living. (l0)

To lay the groundwork for a discussion of both regimes (trade liberalization on the one hand, and the human right to food on the other), this Article will start with a brief discussion of the legal architecture for world trade in agriculture. Next, it will analyze the normative content of the right to food and the corresponding state obligations. A discussion of potential avenues for reconciling the legal frameworks of trade in agriculture and the right to food will follow. Finally, the Article will explore current issues and critically review some of the proposals put forward during the Doha Round that intend to shape agricultural trade in a way that would be more supportive of the right to food.

2. THE LEGAL FRAMEWORK FOR TRADE IN AGRICULTURE

   Agriculture has proven particularly problematic for international trade regulation. Although the disciplines introduced by the General Agreement on Tariffs and Trade (GATT) (11) in 1947 applied to agricultural and industrial products without distinction, the approach of the GATT toward agriculture was "one of waivers from, exceptions to, or disregard of the applicable rules." (12) This approach was abandoned following the Uruguay Round and its Agreement on Agriculture (AoA). (13) The AoA attempts to establish "a fair and market-oriented agricultural trading system" (14) through "substantial progressive reduction in agricultural support and protection." (15) The AoA consists of three main pillars: market access, cuts in domestic producer subsidies, and reduction in export subsidies. (16) The implementation period was an agreed-upon six years (ten years for developing countries), (17) with the exception of Article 13, the so-called "peace clause. (18)is This provision limited the possibility of disputes and would remain in effect for nine years. (19) These rules were accompanied by the Marrakesh Ministerial Decision on Measures Concerning the Possible Negative Effects of the Reform Process on Least-Developed and Net-Food-Importing Developing Countries (Marrakesh Decision). (20) The Marrakesh Decision itself recognizes that implementation of the reform package in agriculture may have negative effects on the ability of these countries to finance normal levels of commercial imports of basic foodstuffs, and that appropriate measures need to be established. (21)

   1. Market Access

      As in other WTO agreements, the AoA committed its members to improve market access through tariffication and through binding these tariffs against future increases. (22) This resulted in a key systemic change, with many of the existing non-tariff trade barriers being subject to conversion into tariffs (tariffication), (23) thus limiting virtually all import protection to tariffs and tariff quotas. (24) These are "more transparent and easier to negotiate than non-tariff measures." (25)

      The level of import protection for agriculture remains very high, however, especially in industrialized countries. (26) One of the reasons for the limited impact of the market access provisions is that the reduction commitments were expressed as an average reduction rather than as a reduction in the average tariff. (27) This formula allowed Members to reduce high tariffs on sensitive products by a smaller percentage, while cutting already low tariffs on less sensitive products by a higher percentage. (28)

   2. Domestic Support

      The second pillar of the AoA is the commitment to reduce trade-distorting domestic support measures. (29) Conceptually, there are two categories of domestic support: support with little or no distortive effect on trade, and trade-distorting support. (30) Distortive support measures are subject to different reduction commitments. (31) These commitments are expressed as a single figure, called the "Total Aggregate Measurement of Support" (Total AMS, Article 1 of the AoA), which includes all existing support measures. (32)

      Article 6 of the AoA "exempts a number of domestic support measures from the reduction commitments." (33) "The fundamental criterion that support must meet in order to be exempt is to be economically neutral, in accordance with Annex 2, paragraph 1." (34) "In addition, the specific requirements listed in Part 2 of Annex 2 must be fulfilled." (35) The first exemption allows members to provide product-specific support up to a de minimis threshold, which is set at five percent for developed countries and ten percent for developing countries. (36) Second, Article 6.2 of the AoA lists exempted domestic support measures to encourage agricultural and rural development in developing countries. This list includes generally available agricultural investment subsidies, agricultural input subsidies...