WTO chief seeks cooperation to address hike in commodity prices

BY: ONOME AMUGE

The lingering war in Ukraine has exposed the vulnerability of global supply chains and raised the spectre of food shortages in many countries, especially those dependent on Ukraine and Russia for imports of key staples.

To urgently address the effects of the crisis, which is threatening food security and rapidly inflicting a severe blow to the global economy, there has to be a coordinated action by international organisations to find a lasting solution to the recent sharp rise in commodity prices.

In the near-term, international cooperation on trade will be needed to minimise the impact of supply crunches for key commodities where prices are already high by historical standards and to keep markets functioning smoothly.

Ngozi Okonjo-Iweala, director-general of the World Trade Organisation (WTO), made this assertion while speaking at a recent informal meeting of the general council.

According to Okonjo-Iweala, dozens of poor countries and tens of millions of people are currently in danger of basic food security. She averred further that these countries have already witnessed some of the slowest economic recoveries from the COVID-19 pandemic, noting that international cooperation on trade is necessary to help mitigate risks of poverty, hunger, famine and social unrest.

The WTO chief, who noted that only 12 members have imposed export restrictions on food to date, emphasised that coordinated government action is needed to avoid a repeat of the cascading export restrictions that exacerbated the rise of food prices in the crisis of 2008-2010.

She urged countries with buffer stocks that can afford to share to coordinate the release of wheat, barley, other cereals and grains, and oils into international markets, thereby alleviating the supply squeeze.

“Countries such as the United States, Canada, Australia, Argentina, and France could increase wheat cultivation while others such as China, Germany, Morocco, Saudi Arabia, Egypt, and Nigeria could increase the global supply of fertiliser,” she said.

Okonjo-Iweala stated further that Africa, with plentiful land and other resources, can take steps to produce more food by utilising more adaptable varieties of wheat, maize and other crops.

The renowned economist suggested that trade facilitation measures could also be brought into play to ease the free flow of goods, while efforts should be made to allow the United Nations World Food Programme full access to humanitarian purchases.

“Prompt notification and information sharing regarding food supplies and stockpiles can help the international community better manage the situation and keep markets functioning more smoothly,” she added.

Responding to calls in some quarters to relocate production and sourcing locally to ensure stable supplies of critical goods and staples, she argued that concentrating on sourcing and production locally could create new vulnerabilities and may not be the best risk management strategy. She, instead, recommended deeper and more diverse international markets to ensure supply resilience.

Okonjo-Iweala maintained that multilateral trade has been and would remain a critical means of adaptation to the mounting global shocks that the world is currently experiencing, noting that this is not the time for countries to retreat inward, but the time to stress the importance of multilateralism, global solidarity and cooperation.

On how the WTO is working towards finding solutions to the food crisis, she explained that the WTO secretariat staff have carried out analysis on food security issues, while also considering a solid basis to foster workable solutions to the present crisis.

She added that Gloria Abraham Peralta, the chair of the WTO’s agriculture negotiations, was planning a food security conference that would take place at the end of April.

The WTO director-general also disclosed that the UN secretary general has set up a three-tiered steering committee involving heads of government, heads of international organisations and technical experts to deal with the issue of surging energy and food prices.