The WTO Public Forum 2023: Let’s listen to the voice of Africa for a greener future

Mari Carlson & SEATINI-Uganda | September 19, 2023

Africa Trade Network (ATN) and Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI-Uganda – who we are delighted to have our partner in MATS!) organised a session on Green Trade and Africa-Policy Perspectives during the WTO Public Forum held between 12^th and 15^th of September in Geneva. In this session, we heard many insightful perspectives on the role of trade in advancing green transition, but also a strong message that a Global Green Deal is needed rather than autonomous greening initiatives by individual countries. Without multilateral cooperation more disparities will emerge, shadowing the efforts to develop more sustainable economies. 

Solving the equation of economic growth and climate change was identified as the imperative for Africa. Mr. Bagooro (Third World Network-Africa) listed investment, finance, and trade policies as bottlenecks to solve the equation. He also explained the disparity between Africa’s exports and imports: exports are mainly raw materials (mentioning agricultural and extractive industries which link directly with the environment) while imports consist of high-added value products. It is no surprise that Africa is paying attention to developing its extractive industry and making sure the benefits are shared within the continent.  

Ms. Nalunga (SEATINI-Uganda) further elaborated the African vision “The Africa We Want 2063” and the keys to greener transition, which not only consist of energy transition but of a more comprehensive decoupling from commodity, agrarian based economy. She raised the importance of the African continental free trade area, AfCFTA, to strengthen national and regional value chains for strengthened economic activities in Africa. She also noted that instead of advocating for trade liberalization more attention should be paid to enhance Africa’s productive capacities. Ms. Nalunga also raised an important perspective regarding trade agreements with the EU (European Union) which she explained to be dividing – not uniting the African continent. The Economic Partnership Agreements between the EU and Africa contain provisions that have negative implications on Africa’s quest for structural transformation.

Ambassador Ms. Mlumbi-Peter (South African Mission to the WTO) called for fair trade rules that are mutually beneficial for all. She underlined the persisting imbalances in the WTO Agreements which are in favour of Developed Countries. These include; domestic agricultural subsidies (Agreement on Agriculture-AoA), issues with technology transfer (TRIPS), and the local content requirements (TRIMs). These are some of the issues that the WTO Africa Group continues to champion, and which are on the agenda of the WTO 13^th Ministerial Conference. She underlined that greening agricultural trade is a key in greening trade (exactly what we in the MATS project are exploring!) practically referring to subsidies in the cotton sector. She also raised the question of resilience not only in the semi-conductor sector but in agriculture, mentioning the Russian war in Ukraine and the COVID-19 pandemic, and how the concentration of grain production in the Black Sea area has become weaponized. 

Based on the discussion, more global cooperation, building stronger local value chains, and investments that support and enable greener economic activities in developing countries are needed. Africa has vast potential to offer solutions to the climate change crisis and the energy transition. Exploring its opportunities and raising its voice in multilateral and bilateral processes is critical. Ms. Nalunga concluded that solutions must come from the bottom-up and there is a need to connect the local level to multilateral level through inclusive and consultative mechanisms.  

Indeed, there is a need to listen to the messages that the African continent is sharing, and to support them to unlock the potential they have. That is the way towards a greener future in a mutually beneficial way. 

SEATINI-Uganda is one of the leading NGOs promoting pro-development trade, fiscal and related policies for sustained equitable development and improved livelihoods in Uganda and the East African Community region. SEATINI aims at strengthening stakeholders’ capacity to influence trade, fiscal and related policies and processes through research, advocacy, training, information sharing, networking, alliance building and litigation.  

Mari Carlson is the co-coordinator for the MATS project. She is also a doctoral researcher in the doctoral programme in Sustainable Use of Renewable Natural Resources at the University of Helsinki. Her research combines trade policy, environmental sustainability, and agriculture.

Food for thought: the failed neoliberal approach to food

Oxfam & SEATINI | June 16, 2023

The unequal global food system is unsustainable for people and planet, and there is an urgent need to rethink how the world feeds its people. We will not solve the long-standing global food crisis, made worse by the war in Ukraine, with the same policy approaches that created it. The combination of extreme inequality and poverty, human rights violations, conflict, climate change and sharp food and energy price inflation, accelerated by the war in Ukraine and the COVID-19 pandemic, has already resulted in hundreds of millions of people not having enough to eat.

While millions of people are struggling to find their next meal, the world’s main food traders have made record profits, and the billionaires involved in the food and agribusiness sector have seen their collective wealth increase by $382bn (45%) from 2020 to 2021, with 62 new food billionaires created in the sector since the beginning of 2020.

The neoliberal promise: market and trade liberalization

For long, policy makers have promoted the idea that a greater reliance on markets, financial actors and trade liberalization will fix our broken food system. However, the reality is that we need to regulate markets, rein in speculation, break up monopolies and create fairer and more flexible trade rules for low- and middle-income countries, if we want to have a fair and sustainable food system.

Trade rules, especially those put in place by the WTO, are supposed to safeguard the ability of all farmers to enjoy equal access to global markets and contribute to food security. However, agriculture interests in rich countries tend to benefit more from trade rules, while people in other countries lose out and face a higher risk of food insecurity. Trade policy tools, including greater space for governments to adjust their levels of food imports and exports, invest in domestic food production and create strategic food security reserves – along with tighter regulation of food commodity markets, and reduced market concentration – are essential structural reforms in the interests of sustainable and resilient food security.

The solution to the global food crisis is not the liberalization of trade at all costs; the full liberalization of food markets only reinforces the structural flaws of the system. It is essential to review trade policy tools and establish better financial regulation to reduce food price shocks, and avoid repeating the failures of the 2007–2008 and 2011 food price crises. The evidence of recent food crises shows that ‘relying on the market’ and promoting more market dependence exacerbates inequality as each new crisis hits.

International trade rules – often negotiated to benefit and protect farmers in rich countries – must be reshaped, with greater flexibility for low-income food-deficit countries (LIFDCs) to control their food imports and exports. Additional reforms to trade rules are needed.

Government intervention: necessary for food security

Transparency mechanisms must be strengthened to improve visibility in food markets. For example, the Agricultural Market Information System (AMIS) – set up by the G20 in 2011 – must be expanded to cover all countries, in order to create a more comprehensive analysis of food stock levels and to ensure the needs and priorities of LIFDCs are taken into account. Important food-producing countries that do not disclose stocks levels, or are legally prevented from doing so, must be called on to provide greater transparency. Private stocks, some of which are held by large agro-industrial groups, must also be included in the assessments, as agreed in the G7 Statement on Global Food Security of June 2022.

Regional strategic food reserves, as seen in projects like the nascent ECOWAS Regional Reserve in West Africa and the ASEAN+3 emergency rice reserve (APTERR), should be encouraged, developed and supported, given the role that stocks can play in buffering the impacts of food crises. None of these developments should be challenged at the WTO as ’trade distorting’, as they have been in the past, but supported as vital food security-enhancing policies.

The principle of flexibility within trade relationships is fundamental. Policy makers must be allowed to modify, adjust and restore tariff, quantitative and non-tariff barriers both in advance of and in the midst of crises, notably to support smallholders and improve national or regional food system resilience. This should be the case within both multilateral trade agreements, such as the Economic Partnership Agreements (EPAs) and The African Growth and Opportunity Act (AGOA), and in bilateral relationships.

Furthermore, provision should be made to allow for temporary dispensations to facilitate trade without requiring any damaging longer-term policy changes. This is especially important in regard to tariff liberalization and the dismantling of other trade policy tools. In particular, OECD country governments should reject opportunistic efforts to use the current crisis to pursue broader long-term trade liberalization agendas and increase their food exports beyond the immediate needs of a food insecurity crisis.

The big players: agro-industry traders and financial speculators

The imbalances in the global food system are also very concerning in terms of market power. Market concentration is so severe that just 1% of the world’s farms control 65% of the agricultural land, and four big traders carry out 70% of global trade in agricultural commodities by value.  Measures to reduce market concentration must be used in scenarios where, for example, only four companies control 70–90% of the global grain trade, or a handful of companies in eastern Europe monopolize the global trade in fertilizers.

Currently, we are witnessing a massive onslaught on seeds especially by the private sector mainly comprised of Multinational Corporations (MNCs) whose focus is profit-making from seed breeding and distribution as a business. The nature of the onslaught that has been brought on by these MNCs is especially being witnessed through the introduction of seeds that cannot be re-propagated, the introduction of patented seeds and advancing policy frameworks that forbid farmers from saving, exchanging, and recycling seed.

The proponents of Genetically Modified (GM) seed insist that they will enable farmers to be able to produce sustainably for both food security and trade but this will further entrench dependency of Least Developed Countries (LDCs) on the Multi-National Corporations for seed and other agro-inputs.

Another major issue is the role that financial speculators have played in international food trade since the early 2000s. As early as 2011, Oxfam documented how deregulation of agricultural commodities derivatives, and the subsequent entry of non-agricultural actors (pension funds in particular) into the market, reinforced the inflation that led to the major food crises of 2007–2008 and 2011.  There is a risk that this situation is being repeated today. Although some reforms have been undertaken since 2011, the lack of regulation remains worrying.

Therefore, in terms of financial market regulation, legislation such as MiFID II and the Dodd Frank Act should be revised and strengthened, and the UN Committee on Food Security‘s Recommendations on Price Volatility and Food Security fully implemented, to tighten position limits and increase transparency on food commodities in financial markets. Commodity index funds that bundle food and fuel investments with other

MATS case study #6 will aim to get a better understanding of the actions that companies (willingly and unwillingly) are doing that are keeping cocoa prices down and therefore potentially harming the right to a living income for cocoa farmers and food sovereignty in general. This better understanding should help (a) business to shift to sustainable business models, (b) legislators to change the trade rules to create a level playing field and (c) governments and cooperatives from exporting countries to increase their negotiating power in global food supply chains.

Based upon Oxfam’s report: Fixing Our Food: Debunking 10 myths about the global food system and what drives hunger

A framework for assessing linkages between agricultural trade, investments, and sustainability

Andrea M. Bassi & Marco Guzzetti  | June 14, 2023

KnowlEdge Srl, as a partner to MATS, developed an analytical framework to enable a comprehensive and interconnected assessment of the impact of policies on behavior, using evidence-based methods supported by science. In MATS, the aim is to connect the local level to a global level while taking into account the complexities of the food system. The framework we developed consists of indicators, methods, models, enabling conditions, and transition pathways. Eventually, it will guide the assessment of sustainability of agricultural trade policies and trade-related measures.

Figure 1 illustrates the process and flow of the analytical framework.  The three main components (indicators, models, and methods for presenting results) are backed by a review of existing analytical frameworks for sustainability of agricultural trade. The selection of indicators enables the measurement and evaluation of the social, economic, environmental, and governance impacts of agricultural trade. These indicators are specifically chosen to conduct a comprehensive analysis of the relationship between trade policy and multidimensional sustainability outcomes. They serve as the foundation for a systemic approach and are thoroughly examined in the earlier phases of the MATS project.  The developed analytical framework provides the necessary structure for case study assessments (MATS has 15 case studies), as well as the analysis of institutional, regulatory, and legal frameworks. Furthermore, it forms the foundation for a multi-actor forecasting, foresight, and back-casting approach to explore transition pathways toward sustainable trade.

The framework has been developed to facilitate diverse assessments pertaining to sustainability of agricultural trade, encompassing trade, investment, agricultural production, production outcomes, and governance indicators. In this regard, the framework has benefited from and is closely aligned with the EU Taxonomy, which serves as a “green classification system” translating the climate and environmental objectives of the European Union into criteria for investment in specific economic activities. Within this context, the framework establishes a set of indicators to characterize and define the sustainability of agricultural trade. By doing so, it aids in the identification of investments that align with the Platform on Sustainable Finance and promotes transparency by adopting a comprehensive and multi-dimensional approach to sustainability.

Andrea M. Bassi is the CEO of KnowlEdge. He has 20 years of experience working with more than 40 governments and international organizations on the development of customized models for the assessment of outcomes of policy and investment across social, economic and environmental indicators. Andrea holds a Ph.D. and M.Phil. in System Dynamics from the University of Bergen, Norway, a M.Sc. in Economics from LIUC, Italy and a post-graduate diploma on Modeling the Environment from the University of Catalunia, Spain. See his comprehensive list of publications, projects, activities, and much more here.

Marco Guzzetti is a Research Fellow supporting the integration of spatial analysis in the systems models developed by KE, and performs Cost Benefit Analysis for sustainable agriculture and land use projects. Marco worked at the United Nations ESCAP in Bangkok, the European Parliament in Brussels and the Lombardy Foundation for the Environment prior to joining KE. He holds an MSc in Environmental Management from University of Stirling, UK and a BSc in Biology from University of Milan, Italy.

Biofuels: A false alternative with dire consequences

Oxfam | June 14, 2023

Biofuels are by presented as a promising alternative to petrol or diesel in the transport industry. In a new report funded by the MATS grant, Oxfam once again shows the negative impact of those fuels: deforestation, the disappearance of food crops, increases in food prices and, not in the least, increased greenhouse gas emissions. Anyone who owns a car and refuels in Belgium is indirectly complicit in human rights violations in Peru and Brazil. That is according to a new report released by Oxfam Belgium. It builds on a study from 2021 and shows that the bioethanol contained in petrol in Belgium is not only pernicious for the climate but also violates human rights in the two countries studied

Sugar Cane: An Opaque Chain

Oxfam’s research focuses on the production of bioethanol from sugar cane in Peru and Brazil, which Belgium imported 10 times more of in two years. The sugar cane is converted into bioethanol after a long series of intermediate stages and arrives in Belgium via the Netherlands. During these intermediate stages, the sugar cane passes companies that can be located in Saudi Arabia, Russia, Norway or China. This opaque route makes it almost impossible to map all stages of the production process. It did not stop us from meeting local communities near the Amazon forest who directly feel the effects of this industry. For instance, the research shows that they were forcibly displaced to make way for mega sugar cane plantations. In Brazil, this involves 8.6 million hectares (twice the area of Belgium). Moreover, the working conditions on those plantations are terrible and the massive use of chemicals threatens the health of both the workers and nearby villagers. People who tried to expose these abuses were physically threatened and feared for their lives

Hunger grows, policy makers turn a blind eye

Is our urge to drive cars at all costs justifiable? Because while, according to the UN, 828 million people went hungry in 2021 (46 million more than in 2020), precious farmland is being used to make biofuel. Land on which food crops could be grown. How can the co-existence of these to tendencies be justified?

Despite amended European directives that no longer require the use of biofuels, Belgium insists on this false “solution”. As a result, biofuel is in every kind of petrol in Belgium. By the way, biofuels are unfairly labelled as “zero emissions”, because establishing sugar cane plantations also takes up natural land such as forests and pastures, which otherwise absorb CO2.

Besides having a negative impact on the climate, biofuels also cause an increase in food prices. For example, the FAO (the Food and Agriculture Organisation, a specialised and impartial agency of the United Nations working against hunger) estimates that increased demand for agricultural commodities for biofuel production has caused prices to rise by 105%. In this way, biofuels threaten the food security of those most affected by food insecurity.

Belgium can lead by example

The regulations that the European Union has included in its directives to protect human rights are not strong enough to prevent violations of the rights of local people. Belgium can and should ban all biofuels produced on agricultural land, including those based on sugar cane. The use of 2nd and 3rd generation biofuels can be allowed after a thorough analysis of their impact on the environment and human rights. But if we want to tackle the climate crisis, we must also adapt our mobility and means of transport. Starting with improving and increasing public transport supply and promoting soft mobility.