Transform Trade submission to the International Development Committee Inquiry ‘The UK Government’s work on achieving SDG2: Zero Hunger’

December 2023

About Transform Trade: Transform Trade works alongside communities experiencing injustice to fight for trade that values people over profit. Our roots are in the alternative trade movement in the north east of England. Transform Trade works in partnership with networks of farmers, workers and social entrepreneurs in South Asia and East Africa to transform trade so that everyone benefits. Transform Trade’s focus areas are Fashion, Tea and Farming. Transform Trade used to be known as Traidcraft Exchange. 

Summary:

1. A core component of the global food system is the trade system. This submission will focus on some of the key ways that trade rules impact the world’s ability to meet SDG2. Trade rules govern the trade in agricultural goods, but they also influence the domestic policy levers countries can use to support food security and reduce hunger within their own borders.
    
2. The UK Department for Business and Trade (in collaboration with other relevant Departments) can positively influence food security and SDG2 by:
1. Publishing a trade strategy that requires the Government to assess the impact of its trade arrangements on a just transition to sustainable agriculture;
2. Ensuring bilateral trade agreements are fully aligned with the Paris Climate Agreement and the SDGs;
3. Removing all requirements to sign up to International Union for the Protection of New Varieties of Plants (UPOV) from its current agreements and refrain from including them in new ones;
4. Ensuring the UK approach to intellectual property protections in trade agreements is shaped by commitments to tech transfer in the Paris Climate Agreement and the SDGs.

3. The UK mission to the WTO, which is part of the FCDO, has an important role to play in furthering SDG2 and food security through influencing trade rules on agriculture by advocating for:
1. Trade rules which enable regional integration, strengthening local and regional agricultural markets and reduce exposure to volatile global food prices;
2. A dedicated Special Safeguard Mechanism for developing countries which is tailored to their needs and not open to abuse by developed countries (see paras 20-21);[i]
3. Reform of the domestic support rules (Aggregate Measures of Support system) so that it tracks actual prices and allows countries greater policy space to support their agriculture sectors (see paras 26-29);
4. A waiver for public stockholding for food security (see paras 24-25);
5. Explore the potential benefits of multilateral initiatives including a WTO climate waiver.
    

A UK trade strategy and aligning trade policy with international commitments:

4. The UK has either ratified or provisionally applied  trade & investment agreements with 69 countries around the world, many of which are countries in the Global South, and many of which either directly or indirectly impact food security in Global South countries.

5. For example, concerns were raised by African banana producers over the impact of the UK accession to CPTPP on smallholder banana farmers and plantation workers in Africa because of likely preference erosion as producers in Mexico and Peru see increased market access through CPTPP. The UK Government is also negotiating a specific tariff agreement with Andean countries that could have further negative consequences. 11.5% of the UK banana market is held by African nations, which provides 80,000 direct and indirect jobs in the region, and sustains around 500,000 people in rural areas, according to Afruibana, the Pan-African association of banana producers and exporters.[ii]
    
6. Despite the multitude of ways that UK trade policy could impact food security and levels of hunger and malnutrition in many parts of the Global South, very few impact assessments have been published on the UK’s existing and upcoming trade and investment agreements.

7. As a signatory of SDG2, the UK Government should publish independent thorough environmental, social and economic impact assessments and assess remediation measures for any potential damaging impacts. These should be produced for all existing and future trade and investment agreements, including their impacts on agri-food trade and food security. These impacts assessments must evaluate potential negative and positive outcomes on SDG2 and food security, particularly in more vulnerable countries and regions. They should also

8. As mentioned above, a trade strategy is essential to delivering on these points and must explain how UK trade policy will be aligned with SDG2 and related agreements such as the Paris Climate Agreement.
    

Seed laws and trade policy:

9. Trade rules are increasingly placing pressure on governments around the world to comply with the International Union for the Protection of New Varieties of Plants (UPOV) and its International Convention for the Protection of New Varieties of Plants. UPOV91 restricts farmers’ rights to save, use, exchange and sell their own seeds.
    
10. The UK currently has 21 bilateral investment and free trade agreements (predominantly with countries in the Global South) which contain requirements for countries to comply with UPOV91 rules, even if a country is not a signatory of UPOV.
     
11. Signatory countries that do not comply with the terms of the Free Trade Agreement (FTA) provisions on the UPOV Convention are subject to the arbitration and sanctions systems that are built into the trade agreements, such as fines or retaliatory tariffs – whether they are UPOV signatories or not. This practice pushes countries to change their domestic laws to comply with UPOV91. It could be even more problematic for signatory countries because if a country decides to leave UPOV 91, it cannot do so without breaching the terms of the FTA, or getting agreement from FTA partner countries to change the text of the FTA.
     
12. In many countries in the Global South, commercial seeds account for below 10% of crops sown, while indigenous seeds account for between 80%-90%.[iii] For instance, one study showed that in Haiti, Kenya, Malawi and the Democratic Republic of Congo commercial seed used on average across a range of different crop types.[iv]

13. Therefore restricting informal seed networks where indigenous seeds are exchanged has negative implications for food security, food supply and efforts to tackle hunger in low-income rural communities in the Global South (particularly in Africa). They are:
     
1. Higher input costs as farmers are more dependent on commercial seeds that they are required to buy often at a high price, rather than exchanging or buying seeds from local farmers. This can lead to loss of income, and in some cases debt, having a direct impact on local food supply if a farmer can only afford one type of seed, and indirect impacts if indebtedness or lower income means rural families are less able to afford food.
    
2. Fewer crop varieties increases the likelihood of crop failure due to pests, diseases and climate shocks.[v] This can also lead to higher pesticide use, which not only damage ecosystems but also increases input costs to farmers.  Finally, fewer crop varieties and the use of agrochemicals also lead to a loss in agrobiodiversity, which is important for maintaining ecosystem services such as soil health. Poor soil health and a degraded environment can undermine productivity, which in turn undermines food security.

Intellectual property rights:

14. Both in the Paris Climate Agreement and the UN Sustainable Development Goals (SDGs) recognise  that the transfer of intellectual property, in the form of know-how and technology, will be critical to addressing the climate crisis and to achieving sustainable agricultural production. This is inconsistent with current IP protections.[vi]
     
15. The WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the IP chapters of FTAs provide binding protections for intellectual property, for potentially all fields of technology, and for their extension and expansion. For example TRIPS enforces a minimum 20 year protection for patents and 10 years for industrial designs.[vii]
     
16. Small scale farmers generally do not benefit from IPR systems in trade agreements and trade law, but rather it is larger agri-corporations that profit. The UK should be promoting innovative IPR systems, and incorporating flexibility into its trade and investment agreements which foster a fairer flow of technology in line with their Paris and SDG commitments.[viii]

Regional integration for food security:

17. Intra-African agricultural trade is below 20%, compared to over 60% in Europe and Asia.[ix] At the same time, many African trading blocs and countries have Economic Partnership Agreements with the UK which place 0% tariffs on exports from African countries to the UK, including in agricultural goods. This drives export-oriented agriculture, while doing very little for food security in African countries. EPAs impose artificial regional divisions, and cause border friction between LDC and non-LDC countries, hampering regional development.
     
18. At the same time, Africa is a net importer of food.[x] This makes populations more vulnerable to global market shocks, such as recent mega inflation that came as a result of Russia blocking the export of grain, and higher fertiliser and fuel prices.[xi] This undermines the ability of African countries to achieve SDG2.
     
19. The UK should be supportive of further regional integration within Africa for agricultural trade, in particular by rethinking the UK’s trade relationships so that agreements actively support regional integration. Furthermore, UK EPAs with African nations should be renegotiated to allow countries maximum policy space to ensure their domestic agricultural sectors are not undermined.
     

Public stockholding and the AoA Special Safeguard Mechanism:

20. Under the WTO AoA, developed countries succeeded in securing a Special Safeguard Mechanism (SSM) allowing them to temporarily raise import duties on agricultural imports if they undercut domestic farmers or risk dumping. The SSM is only available to 39 countries – no LDC is part of the list and South Africa, Namibia, Swaziland and Botswana are the only sub-Saharan African countries that benefit from it. The EU lists 685 products (31.1% of all agriculture tariff lines) under the SSM, and has made significant use of the provision, for example for poultry and sugar products.[xii]

21. Developing countries have long argued for an improved SSM to allow them to tackle import surges or sharp falls in prices. This issue has been pursued, primarily by the G-33 group of developing countries, in recent WTO negotiations, but with little success.

22. Related to this, many developing countries have programmes to acquire food for the purposes of providing a buffer against volatility in global prices, which helps support low-income farmers and allows governments to combat hunger and malnutrition. However, depending on how the programmes operate, they can fall foul of WTO rules and are open to dispute settlement at the WTO.[xiii]
     
23. In a 2013 agreement, WTO members agreed to “exercise due restraint” in the initiation of complaints to challenge the compliance of a developing-country member with obligations under the AoA.
     
24. The agreement also committed members to agree to a permanent solution on public stockholding by 2017. However, this deadline was missed and there has been little progress since then.[xiv] Discussions at the WTO 13th Ministerial Conference in February 2024 are likely to address this, but it is unclear whether a solution will be found.

25. The UK Delegation to the WTO is advocating for a reduction in the use of the public stockholding programmes. his runs counter to developing country priorities. The UK should instead support the development of both a permanent waiver for public stockholding for food security and significant improvements in the SSM so that it is fully available for developing countries to use.[xv]
     

Domestic support for food systems:

26. The AoA created rules around the support (subsidies plus other programmes such as investment in research and development) which governments can offer to their agricultural producers. Generally speaking, this has been to the benefit of richer countries, which have been able to adjust support for their agriculture sectors within the rules, negotiate additional support entitlements and historically commanded more financial resources to support their farming sectors.
     
27. Supports categorised by the WTO as ‘trade distorting’ have generally decreased since the AoA came into force.[xvi] However actual support levels for agriculture remain high and in some large developing countries have also grown significantly over the past 25 years. This is because supports have been converted to 'green box' which are deemed not to be trade distorting. This undermines efforts to allocate global resources more sustainably, equitably, and efficiently.[xvii]

28. Developed countries managed to negotiate a very high maximum tariff on key commodities. This means in practice they protect their own agricultural industry due to a reduced threat from cheaper imports. For example, Japan (rice) and Canada (poultry) have maintained relatively high commodity support.[xviii]

29. This has created a system where richer nations can use their competitive advantage to export agricultural goods to the Global South, while those countries often struggle to support their own sectors through financing, technical support and facilitation. This undermines SDG2 in many countries in the Global South where their own farming and agri-food systems have not had the levels of support needed to shore up food security.

30. For instance, imports of frozen chicken from the EU, Brazil and the US into Ghana exploded in the early 2000s, after the Ghanaian government reduced import tariffs for poultry to 20% in the late 1990s. Frozen chicken imports, priced at up to 30% lower than local poultry meat, decimated the domestic poultry sector. In 1992, the local industry supplied 95% of Ghana’s poultry requirements, by 2002, the local industry supplied just 11%.[xix]  While the availability and affordability may have benefitted Ghanaian consumers in the short-term, this development undermined an important sector in Ghana’s economy.

31. Ahead of the WTO 13th Ministerial Conference, the UK Government should engage meaningfully with the WTO ‘developing’ country members, and find a constructive way forward on domestic support under the AoA. This will be important to ensure that key sectors aren’t continually undercut in future, and rules are more balanced and fair for countries in the Global South.