This article explores agricultural export restriction disciplines under international economic law, mainly international trade and investment laws, in the particular context of the recent translational race for farmland. A number of reasons justify this undertaking. Firstly, the use of export restrictions of various sorts by a number of countries in response to the food price spikes in 2007-2008 exacerbated the food crisis. Part of the explanation for this pervasive use of export restrictions is that the World Trade Organization ("WTO") law discipline on export restrictions is too weak to restrain exporting countries from introducing and maintaining these measures. As such, agricultural export restrictions have gained some attention in various regional and global fora that have been calling for tighter disciplines, although to date there is little progress to this effect. Secondly, agricultural export restriction measures have also been one of the push factors for increasing acquisition of farmland abroad in recent years. Indeed, many of these land deals target either food security of home states (export back home), or generating stable profit through, among others, secure access to international markets. Hence, possible export restriction measures by host states, even when dictated by local necessities, would be a counter move to these goals, and likely lead to tensions between the competing interests of foreign investors and host states (local communities). This is particularly so in the context of sub-Saharan African host countries, which are often themselves facing frequent food insecurity (hunger) challenges.
Admittedly, export restrictions may not be a panacea to ensure food availability in local markets, let alone access at household level. (1) Thus, it may be argued that so long as there are alternative sources of food supply, mainly the international market, the emphasis on export restrictions is a misplaced concern. (2)
But, given that it is the lack of confidence on the international market that has in the first place propelled importing (investor) countries to acquire land abroad, there would hardly be an overriding logic that assures the reliability of this same market for host states. Indeed, at times, export restriction maybe one of the only few policy options available to host states.
Despite the increasing attention agricultural export restrictions have gained in recent years, and the complex issues the potential application of these measures to foreign agricultural investments may involve, the existing literature tends to focus more on WTO law and less on how WTO law interact with the disciplines existing under other strands of international economic law, notably international investment law. (3) This work is an attempt to address this gap in the existing body of literature. The article makes a claim that despite the relatively loose WTO discipline on export restrictions and hence the increasing call for tighter disciplines in recent years, transnational national agricultural investments, which are further subject to international investment law, are already subject to tighter export restriction disciplines in a manner that inhibits hosts states policy space to respond even to local hunger.
The article is organized as follows. Following this introductory section, part II will provide for the general context in which these farmland acquisitions are happening; noting that food security (food demand) in home states is a significant--if not necessarily the principal--driver of these investments, and highlighting the relevance of export restrictions measures to foreign agricultural investments in sub-Saharan Africa host states often facing hunger challenges such as Ethiopia. Part III will explore this ability of host (exporting) states under the WTO laws, particularly the General Agreement on Tariffs and Trade ("GATT 1994") and the WTO Agreement on Agriculture) and jurisprudence. This paper will demonstrate that in the light of indeterminate and subjective nature of the key terms defining the conditions that might justify recourse to export restriction measures, weak procedural requirements that can easily be eschewed, and the absence of limit to the use of export taxes (that otherwise have similar effect to quantitative restrictions), the WTO leaves member states with adequate room to introduce agricultural export restriction measures. Part IV will analyse how WTO law interacts with international investment law in disciplining export restrictions. The article concludes, in part V, that in the context of transnational agricultural investments, WTO law flexibilities on export restrictions on ground of food security would be diminished when read in the light of relevant disciplines under international investment law and practice, inhibiting host states ability to respond to even local hunger.
TRANSNATIONAL AGRICULTURAL INVESTMENTS: THE CONTEXT
A spike in food prices of 2007 (which escalated even further in 2008) made food unaffordable in many countries, and sparked a wave of 'food riots' in over forty countries. (4) In response, some importing countries engaged in 'panic purchasing' of grains while others attempted to negotiate long-term grain supply agreements with exporting countries. (5) On the other hand, a number of grain exporting countries began introducing export restriction measures partly to limit food prices inflation at home (6)--producing a growing realisation that the global market was no longer reliable source of food. This propelled relatively rich countries with shortage of arable land and water to outsource food production through purchase or lease of farmland abroad. (7) In addition, the rise in the price of oil during the same period and policy responses to climate change imperatives resulted in considerable demand for alternative and renewable sources of energy, such as biofuel, which further contributed to the increasing demand of arable land. (8) Also, as a result of the global financial crisis, investments in land (agriculture) were 'rediscovered' as 'safer' ventures. (9) Thus, the convergence of global food, energy (fuel) and financial crises--so called "the triple-F crisis" (10)--of recent years triggered the increasing acquisitions of farmland mainly in the global South and most notably in sub-Saharan Africa (11) by both foreign private investors and sovereign wealth funds, (12) a phenomenon often infamously referred to as 'land grabs.' (13)
At the receiving end too, host states are not passive partners. Indeed, they have long been courting for large scale investment in agriculture through a series of measures ranging from the waves of land law reforms to incentives of various sorts, although it now appears that only the recent global 'crises' induced such investments than those incentives. (14) The often-claimed potential benefits of these investments to host states include enhanced food security, employment opportunity, and access to new farm technologies, export earnings, and development goals in general. (15) Yet, whether these investments deliver on those counts, (16) or even, whether host governments are 'neutral' agents promoting the interest of their people in this process is quite contentious. Indeed, it appears that the discontents against these land deals in different parts of the world speak to these doubts. In 2008, for instance, the South Korean business group Daewoo Logistics attempted to lease for ninety-nine years 1.3 million hectares of land (roughly a quarter of the country's arable land) from the Malagasy government to produce rice to be exported back to Korea, despite Madagascar's dependence on U.N. food aid. (17) A popular riot against the deal culminated in the overthrow of Madagascar's President Marc Ravalomanana--the new government axed the deal in March 2009. (18) Similar discontents have been reported in many other countries, including those in sub-Saharan Africa region. (19)
While land acquisitions abroad have historical roots in imperial expansions and colonial plantations, (20) in contrast to their historical antecedents, the recent transnational land acquisitions are occurring at scale and pace not seen before, and center on production of staple foods and biofuels or simply speculation. While food and biofuel are regarded as significant drivers of the recent transnational land acquisitions, (21) their respective share is far from clear. Indeed, food and biofuel production are competing drivers. Whereas the early 'land grabs' reports presented food as a major driver, some recent works point to biofuels as the major driver. For example, the World Bank's Policy Research Working Paper, titled What Drives the Global "Land Rush"?, documents "[dependence on food imports emerges as a strong driver of demand for land acquisition." (22) On the other hand, according to the Land Matrix database, only about fourteen percent of the land acquisitions in sub-Saharan Africa are for food production, while non-food production, multipurpose (several crops in different categories), and flex crops (crops with multiple uses across food, feed, fuel and industrial purposes) constitute forty-three, thirty, and thirteen percent respectively. (23) As long as the share in the 'multipurpose' and 'flex crops' is not provided, it is difficult to tell the absolute share of food and biofuel from the database. The share of the driving factors also differs from country to country. (24) What makes the food-fuel distinction further blurred is also the fact that some crops officially proposed for biofuel production (non-food category) can easily be shifted to food (animal feed) depending on the dynamics of demand and profit--maize and soybean are apt examples here. The converse may not, however, be the case, since a shift from food to biofuel requires more investment in processing facilities. At any rate, the more arable land is used for biofuel...
Transnational agricultural investments and host states' export restriction flexibilities under international economic law.
|Author:||Fura, Gashahun L.|
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