Food Safety and Security under Doha WTO Regulations Impact on Americas Southwest - Example

First Last Number 13 September Food Safety and Security under Doha WTO Regulations impact on Americas Southwest1. EXECUTIVE SUMMARY Important information relating to “Food Safety and Security under Doha WTO Regulations impact on Americas Southwest” has been unfolded. It has been observed before the implementations of the Doha round by WTO that certain issues were prevailing regarding trading. This significantly affected the food safety and security concern for different nations. In this regard, the issues related to international trading relating to agribusiness are the trade barriers. These trade barriers are both tariff and non-tariff. The tariff barriers include the export duty and the import duty. On the other hand, the non-tariff trade barriers include the import and export license restriction and subsidy provided by the government to the domestic producers. However, on account of resolving such issues, there have been some strong arguments amid several WTO members in the Doha round of WTO. Finally, the free trading agreement has been accepted among the member nations. Contextually, free trade has led to a significant impact in the South-western region of the US. Most importantly, it has led to the availability of food products in the region with lower price. It has also lead to the development in the trading within the region. However, there are also some of the negative impacts on the same. Most significantly, free trade in the food products has led to the cash outflow from the region. In addition, different agreements and disagreements relating to food safety and security under Doha has been identified. 2. OBJECTIVES The prime objective of the essay is to provide a comprehensive description of the “food safety and security under Doha WTO regulations impact on Americas Southwest”. In this regard, a comprehensive description of all the issue related to the international agribusiness and trade in Southwest America is being considered in the study. The essay also considers all the aspects of food safety and security norms of Doha WTO regulations. The essay also considers commodities, food safety and security disputes that arise in the international market. Further, it entails the trade agreements and the trade disagreements that have taken place in the international market in the recent past years. 3. PERSONNEL Personnel are the people who are engaged with an organization or an association. Several personnel are associated with food safety and security that include the members and the representatives of the World Trade Organization (WTO). The representatives are of several member countries of the world. The consensus among these representatives would lead to the implementation of certain agreements among the member nations that would be beneficiary for all. Besides, the government of the US is also considered as another important personal associated with the Doha WTO regulations. The government of the US is also considered an important personal because food safety and security under Doha WTO regulations have impact on the Americas Southwest. Thus, the role of the government of the US is very decisive. The US government also being the active member of WTO and thus, the US representatives of WTO are also being considered as important personnel for making decisions relating to agribusiness in the Southwest segment of the US. The food safety and security department of the US are also influenced by the regulations of the agreements that are made by the WTO. Thus, the personnel that are related to these departments are the key personnel. The implementation of the agreements made by the WTO with regard to food safety and security also has an impact on the common people of the world. Common people are also affected with the availability of the same and hence, are considered as very important personnel. Further, it is also important to note that people of the Americas Southwest are the ones who are influenced with food safety and security under Doha WTO regulations (Smith 150-205). 4. PRODUCT/SERVICE The business related to the agricultural production is recognized as agribusiness. Agribusiness is identified to comprise business related to agrochemicals, farm machinery, breeding, seed supply, crop production, processing of food or agricultural products and distribution of agricultural products among others. Agribusiness is most important business for each and every nation with respect to agricultural production. A nation with inadequate production of agricultural products is highly depended on other countries. Agribusiness is very decisive, as it is the basic need for each and every people in the earth for his or her survival (Wright 156-169). Food and agriculture products are important elements in the contemporary world but at the same time, these products pose potential threats to human as well as animals. The WTO Doha Round negotiations that were launched 2001, in Doha, Qatar was viewed as an important initiative of the WTO towards seeking cooperation in several important issues. Food safety and security was allocated with significant priority during the Doha Ministerial Conference. The failure of the Uruguay Round to render a resilient multilateral agenda including the use of food safety as well as quality regulations, Doha Ministerial Conference witnessed noteworthy divergence of views. Doha round also addressed the issue related to severe volatility of food prices in the worldwide market. Responding to the food crisis witnessed by many countries and placing export restrictions were among the prime subject in the Doha round. During the Doha round, several issues were addressed and advocated in this regard, the uniformity among the world leaders were observed towards supporting local food production as one of the primary means to eliminate the challenges of food crisis. Besides, it was also concluded in the Doha round that increased dependence on the global market by countries increase the risk of food safety and security. In this regard, the leaders were identified to be highly committed towards formulating innovative food safety and security policies (Valdés and Foster 2-33). 5. INTERNATIONAL MARKET ANALYSIS 5.1 Industry. International agribusiness has been the oldest and the most popular trade in the world. The onset of international agribusiness has taken place with the civilization of people in the earth. 5.2 Competitors. The reason behind extensive international agribusiness is the inability of some of the countries in producing sufficient amount of agricultural products for its citizens. These countries due to the unfavourable climatic conditions are being unable to produce sufficient amount of agricultural products. 5.3 Customers. Several countries are identified to have inadequate production of agricultural products such as the Middle East, where the major part of the land area are covered with infertile land. It also includes the countries in the Polar Regions. The polar regions of the earth are incapable of producing agricultural products. This is mostly because of the extreme unfavourable cold temperatures of the region. The aforementioned countries primarily import agricultural products from the other countries. 5.4 Suppliers. Some of the countries in the world are extensive producer of the agricultural products for favourable environment of the region that supports agricultural production. Some of these countries are China, India, and many more. Besides, some countries in the world are efficient producers of some of the agricultural products despite of having unfavourable climate. One of such countries is the US. The reason behind this is the advanced technology in the field of agriculture that has made them a good producer of the same in the world (Smith 150-205; Wright 156-169). 6. MARKETING STRATEGY The major issue that is considered in the Doha round of WTO is with regard to the food safety and security. There had been several issues related to the international trade in food products. These issues had led to major disadvantage to several countries due to lack of food supply. In this regard, in resolving the issues related to food safety and security, the Doha round of WTO began in 2001. The issues considered in the Doha round of WTO are related to agriculture and international trade barriers created by tariff barriers and non-tariff barriers. However, in removing trade barriers across several nations, there have been some of the strong arguments for a longer period of time. The countries that were mostly involved in the argument include the US and the member nations of the European Union. Besides, other developed nation that was significantly involved in the argument of Doha round of WTO is Japan. Few of the developing nations that had taken active participation in the Doha round of WTO include India, China, South Africa, Brazil and South Korea (Smith 150-205). The first round of the argument regarding fair trading across the borders began in the year 2001 in Doha and hence, it is identified as Doha Round. In this round, the negotiation began among several countries regarding the safety and security of food products. The purpose of the argument and the negotiation was to create a fairer trade that would lead to the benefit of the developing nations. However, there were some of the argumentative statements and comments by the developed nations of the world. According to the arguments by the development nations, the agreement would lead to the fall of several nations and would provide no opportunity of growth for the nations (Smith 150-205). There had been several of the attempts after the first round of Doha in 2001. These attempts are evident in the meeting of the WTO in Cancun in 2003, Geneva in 2004, Paris and Hong Kong in 2005, Geneva in 2006, Potsdam in 2007 and again in Geneva in 2008. The repetitive attempt made by the developing nations and others to reduce the trade barriers had been successful. The trade barriers regarding the tariff had been removed from several countries. These countries are subjected to remove the tariff barriers gradually over a certain period of time. The reason behind such gradual decrease in the tariff rate is because of the fact that the sudden removal of the tariff rate may significantly affect the economy of a nation. The tariff barriers are for both the possible cases, which are import tariff as well as export tariff. Besides, the successful removal of the tariff barriers would also be an attempt to remove non-tariff barriers. The non-tariff barriers comprise the removal of the import license and export license restriction in trading. It also attempts to remove the subsidies made by the government of different nations to its domestic traders. Moreover, the Doha round of WTO regulation also attempted to remove the import quota from different countries owing to which the producers would be able to undergo unlimited production of agricultural products and accordingly, would be able to sell i domestic, national and international market. Although, the removal of these barriers considering both tariff and non-tariff are attempted to be removed, but the implementations of the same requires certain time. The aforementioned barriers are to be removed and would lead to the development of fair trade practices worldwide (Smith 150-205). There are several benefits that are been observed from the implementation of the WTO agreements in the Doha round. It has been estimated that if the trade barriers of all the countries were reduced to one-third rate, then there would be global benefit of above US$500 billion. This significantly reveals the benefit that would be generated by the implementations of such kind of agreement. It is also believed that the global income would also increase significantly. This is more prominent in case of the developing nations of the world. Some of the countries of the developing nations like Kenya have estimated a significant profit to be exerted by the export of the food products from the country. These food products include coffee, tea, oil seeds, and many more (Smith 150-205). Who are my Customers? The South-western region of the US is not a great producer of agricultural products. This is prominently because of the unfavourable climate of the same. In this region, there has been lower level of rainfall and the soil of the region is not fertile. Thus, it is one of the regions of the US that is incapable of producing crops at a suffice level. How to Deliver my Product/Service to my Customers? There are certain native people in the region that produces farming products, but are not adequate as per the demand in the South-western part of the US. The South-western part of the US is equipped with the advanced technology for the agricultural development. The country also possesses technology to preserve food for longer period of time. Cost Analysis. The country also has intense development in the industrial food products. Despite of such development in the field of food and agriculture, the region still demands for a significant amount of agricultural food products to be imported. Thus, they are largely dependent on the other states of the US and other countries of the world that exports food products. Every year there has been a significant amount of food products imported in the South-western part of the US to meet the demand of the region (Broussard 28-61; Frost 51-63). 7. RISK FACTORS With the onset of international trade in agribusiness, several international agribusiness issues are evident Agribusiness issues are moulded with the political reasons as well as the economic factors. It has been identified that certain countries in order to undertake political advantages to other countries create several issues that have caused significant trade barriers to agribusiness in the world. Besides the political factors, the economic condition of a country has also resulted to the creation of trade barriers. Additionally, some of the countries in order to avail economic advantage have also adopted measures that had created trade barriers with regard to agribusiness (Smith 150-205). Tariff Barriers. One of the trade barriers that have been the key issue with regard to agribusiness is the inclusion of tariffs in agribusiness. Tariffs are the duties that are imposed on the agricultural products by the government of nation or a region. These duties make the food product more costly and hence, restrict agribusiness across the national borders. The tariff duties are imposed on both the export of the food products as well as in case of import of the same (Smith 150-245). Tariff Barriers in Export The tariff rates are imposed in the export of food products mainly to discourage the export of the same. The reason behind this is that with the reduction of the export of the food products, the availability of the same within a nation would be more. These would lead to the lowering of the price of the food products within a nation. However, it also incurs opportunity cost of exporting the same and increasing national income. This type of export tariff barriers is adopted to gain political advantage in the world. The restriction in the export of trade also implies to the economic disadvantage to the other countries importing from the nation that have imposed tariff barriers on agricultural products. Hence, a country with export barriers through the inclusion of tariffs possesses political advantages (Smith 150-205). Tariff Barriers in Import The other form of tariff barrier is the inclusion of tariff duties in the import of food products. The tariff duties in the imported food products make the same costly. Higher tariff duty in the imported food products derives the cost of the same to be more than the domestic food products. Thus, this type of trade barriers significantly discourages the importers of the food products. However, this type of trade barriers greatly supports the domestic producers to earn profit. The domestic producers of food products would have no competitors from outside the nation. Thus, it would lead to economic benefit of the nation that has imposed tariff barriers. Tariff barriers in importing activities also lead to the restriction of profit of the exporting nation. Hence, it is also an economical loss to the exporting nation. This strategy is undertaken to gain political advantage of one country over the other by restricting the economic growth of the other nations (Smith 150-205). Non-Tariff Barriers. The governing bodies of a nation or a region create several trade barriers. Besides, the tariff barriers there are also some of the non-tariff barriers that significantly impacts on the trading of food products among the countries in the world. Non-tariff barriers include import licensing requirements, standard disparities and export subsidies among others (Smith 150-205). Export License One of the non-tariff barriers to international trade in food products is the restriction in providing license for exporting food products to other countries of the world. Similar to the tariff duty in the exporting, the export licensing is also implemented to gain economic and political advantages as compared to other countries of the world. Export license restriction is implemented in order to avail the food products within the country. However, there is a darker side with regard to the restriction of export through limiting export license. The restriction in the export of food products lead to the lack of food in importing countries. The lack of food within the importing countries would lead to higher inflation, which would further adversely affect the economic condition of a country. This significantly influences and paralyzes the economy of the other nation. The fiscal deficit and the current account deficit of the importing nation also rise (Smith 150-205). Import License Besides, the export license, there are also import license of food products. The restriction in the import license of food products is also one of the major issues that has restricted cross border trades. This is mainly adopted in order to restrict import from other countries of the world. The import restriction in licensing assists domestic producers to earn more profit. The domestic producers would have no foreign competitors and hence, would have significant benefit. Thus, it leads to a significant competitive advantage to the domestic producers and the traders. Moreover, import license restricts importing to regain national profit, as the national profit for the development of the same country. Importing of food products or any other commodities lead to the reduction of the domestic currency and hence, there is a significant trade deficit in a nation. It also leads to the fall in the valuation of the domestic currency and thus, leads to significant fall in the economy of the nation. However, the other country that is supposed to import the food product may be in loss for inadequate supply of food products. The exporting country incurs a significant loss due the regulation of import licensing by other countries. Further, the importing country that regulates license to the same also derives a significant economic loss if the nation is lacking adequate quantity of food. The lack of adequate amount of food would lead to higher inflation within a nation. It may also lead to a famine within a nation. Thus, results into a drastic fall in the economy of the nation (Smith 150-205). Subsidies Subsidies are also one of the methods that lead to trade barriers across different nations. The subsidies provided by the government of a country to its domestic producers and traders lead to a significant impact on importing. The subsidy provided by the government lead to the reduction of price of the food products. Hence, it leads to a significant competitive advantage to the domestic traders. The domestic traders are able to keep a price lower than the imported products and thus, are able to gain the market share in the domestic market. In this regard, subsidies are also considered as an unfair to the importing nations (Smith 150-205). The Doha Declaration entailed negotiations on issues directly and indirectly related to food regulation in a number of several venues. Some negotiations concluded with positive note where representatives of the countries agreed to initiatives pertaining to implementation of the Sanitary/Phyto-Sanitary (SPS) and Technical Barriers to Trade (TBT) Agreements related to further integration of developing countries into the global food system. The agricultural negotiations included discussion on “non-trade concerns” which included issues pertaining to food safety, labelling, and animal welfare. The trade and environment negotiation group addressed the issue regarding the implementation of WTO rules are to apply to WTO members, who are also members to environmental agreements, such as the parties to Cartegena Protocol, which authorizes use of the precautionary principle in risk management. The several precautionary principles were discussed in the Doha round regarding the role of the government in restricting trade to protect the environment as well as the public health. The Doha Ministerial Declaration was organised for negotiations to clarify and develop WTO disciplines on fisheries subsidies, considering the significance of this sector to emerging countries. It suggested precluding a wide range of subsidies while identifying the requirement for flexibility in the exercise of subsidy disciplines to small-scale and labour-intensive fishing in emerging countries. A similar observation applies to the negotiations aimed at reducing barriers to trade in environmental goods and services (Valdés and Foster 2-33). Doha round although offers an improvement on GATS commitments, yet significant gaps between the proposed policy can be identified. At the same time, disagreements on trade facilitation and agriculture were also witnessed during the Doha round. Different viewpoints were postulated regarding the price benchmark related to the valuation of the volume of food stocks countries. The major disagreement was related to developing agricultural and industrial markets across different countries and with respect to reduce farm subsidies in wealthy nations. There were also certain disagreements on matter pertaining to special protection for the farmers in China and India as well as on the issue relevant to banana imports from African and Caribbean to the European Union. Besides, the insoluble disagreement between the United States and India on the special safeguard mechanism (SSM) that deals with the safeguarding the interest of poor farmers by permitting countries to levy a special tariff pertaining to agricultural goods during the instances of price fall and import surge was associated with the Doha round (Valdés and William 505-530). SWOT ANALYSIS Strength. The Doha round of WTO that had witnessed free trade to the member countries of the world is believed to influence certain countries and regions. One of such region in the world is the South-western part of the US. The region is depended of the import of agricultural products with the aim of meeting the needs of the region. Hence, the free trade agreement among the several countries of the world initiated by the Doha round of the WTO has some of the significant impact. It is also important to note that the South-western part of the US is among such regions of the world that are believed to possess a positive impact by the implementations of the food safety and security measures by the Doha round of WTO. One of such positive impact that is being observed is the availability of food products among the region. The South-western region of the US would have no scarcity of food in the region and thus, there would be no possibility of famine in the region. The implementation of the same brings a significant impact on the regional security with regard to food safety (Vankat 88-101). Besides, the availability of food and food security in the region, there is another aspect that is being noted as the positive impact by the implementations of the Doha WTO regulations. Thus, with the availability of food products within the region, the price of the same would also decrease. Thus, it results into the decrease of inflation level within the region, which significantly benefits the economy of the region as a whole. The implementation of the free trade among the countries regarding food products increases the purchasing power of the people. This is prominently because of the lowered price of the food products in the market (Smith 150-245). Weakness. Although, there has been some of the strong positive notions regarding the impact of food safety and security under Doha WTO regulations, but the negative impact of the same cannot be denied. The South-western region of the US has witnessed certain challenges relating to the possibility of the risk in competitiveness of the traders with the efficient foreign traders, as the free trade agreement has raised competition worldwide to a high extent. The foreign traders with more production capacity are been able to set a price for the food products, which is less than the domestic price. Thus, the domestic traders of the South-western region of the US faced certain challenges to compete with foreign traders. This leads to the market grasping by the foreign traders and hence, incurs a devastating risk to the domestic traders (Jones 24-32; Smith 150-245). Opportunity. The free trade among the countries with the implemented laws of the Doha WTO regulation implies to the growth of the region. The region has witnessed a high growth after the implementation of the free trade. The economy of the region is growing at a good level, which has also resulted in improved trading activities. Food trading in the region has significantly boosted. This has led to the income opportunity of several of the people of the region that are engaged in the food products trading (Wright 156-169). Further, free trading in the south-western region of the US has also developed competitiveness among the traders. The traders in the region on account of the external competitions from several countries became more efficient to compete effectively. This has also led to the growth of such domestic traders in the region. The traders in order to compete with the external competitors applied technology based trading system. The US have advanced and modern technology in the field of food production and storage among others. The traders of the South-western region of the US applied these technologies for improved production and trading of agricultural products. This has significantly supported the traders of the region to compete with external traders. Thus, in the process, there has been significant development of technology in the field of food products. Further, the development of technology with regard to the food products has also led to the competitiveness of the traders in the region. This increased the efficiency of the traders and hence, resulted in towards the regional growth (Hoffmann 42-63). Furthermore, with the implementations of free trading across the world, it has led to fair trading throughout the world and in the South-western region of the US. The traders are given equal opportunities for growth and hence, created fair trading in the region. The traders are motivated to perform in the equal platform of competing with each other. Moreover, with fair trading among the traders in the region, it has led to the development of a healthy trading environment. The domestic traders of the region are motivated to compete with the external traders (Hoffmann 42-63). Threat. With free trading and import of the food products in the US, it also generates the cash outflow of the region to the other parts of the world. Thus, with the increase in the cash outflow to the other country of the world, it incurs a significant economic loss to the region. This leads to significant revenue loss for the region. In this regard, free trading in the South-western region of the US also raised the issue of trade deficit. The rise in the import value from the importing nations as compared to the export value of the agricultural products produced domestically is also a major issue that prevailed in the South-western region in the US (Hohmann 42-49; Smith 150-245). 8. FINANCIAL STATEMENT AND PROFORMA The below diagram depicts the economic forecast of Arizona, one of the state of the Southwest America. Arizona Forecast (Statewide) (Source: The University of Arizona, “Economic Forecast Data”) The below diagram shows the real GDP of several parts of the US and further, depicts the higher real GDP in South-western region. Annual Percentage of Change in the South-western Region of the US Source: (US Department of Commerce, “Annual Percentage Change in Real GDP”) 9. SUMMARY Over the last few decades food safety and security has emerged as one of the important issues surrounding the international food system. In this regard, World Trade Organization (WTO) has been constantly involved in eliminating the gaps in the international food system. Correspondingly, the Doha negotiations that was held in the year 2001 in Qatar was aimed at addressing structural challenges for growth and promoting trade capabilities across the world. One of the most important agendas in the Doha round was related to food safety and security, which was due to the immediate effect of food crisis witnessed by many countries. Nevertheless, the term agribusiness, which implies business that is related to the agricultural production, has acquired significant attention in the international trade and business. The highly volatile food prices in the international market has created challenges for the leaders across the world to establish cooperation among them to attain flexibility necessary for the world to effectively deal with these challenges. However, increased tariff rate has been acting as a trade barriers, which has influenced the growth of international agribusiness. The restriction in the export of goods has created challenges for many countries such as food crisis. In addition, the subsidies provided by the government of a nation to its domestic farmers have a significant impact on importing. Notwithstanding, the Southwest region of the US is not among the largest producer of the crops due to the unfavourable climatic condition. Thus, a significant volume of food products is imported in the Southwest region of the US to meet its demand. Accordingly, the impact of Doha WTO Regulations has been anticipated to be favourable for this region. Particularly, the new set of policy, which responses to ensure food security across the globe. This policy is anticipated to ensure availability of food products in abundant within the region at a reasonable price. Nevertheless, the policy is accompanied with increased competition from overseas producers and marketers, which are likely to create challenges for the local farmers in the Southwest region of the US. In addition, agreement on Sanitary/Phyto-Sanitary (SPS) and Technical Barriers to Trade (TBT) was witnessed in the Doha round, while on the other hand, disagreements on trade facilitation and agriculture evolved during the Doha round. Disagreements on matter related to special protection for the farmers in China and India as well as on the matter associated with banana imports from African and Caribbean to the European Union were central to the Doha round. Works Cited Broussard, Sherry T. African Americans in Lafayette and Southwest Louisiana. South Carolina: Arcadia Publishing, 2012. Frost, James Bernard. Americas Southwest: The Best Organic Food Stores, Farmers Markets & Vegetarian Restaurants. Arizona: Hunter Publishing, Inc, 2011. Hoekman, Bernard, Will Martin and Aaditya Mattoo. “Conclude Doha: it matters!” World Trade Review 9.3 (2010): 505–530. Hofmann, Rainer. The European Union and the WTO Doha Round. Nomos. 2007. Web. 14 Nov. 2014. Hohmann, Harald. Agreeing and Implementing the Doha Round of the WTO. Cambridge University Press, 2008. Jones, Kent. The Doha Blues: Institutional Crisis and Reform in the WTO. Oxford University Press, 2010. Smith, V. S. “The 2014 US Farm Bill: Implications for the WTO Doha Round in a Post-Bali Context.” Tackling Agriculture in the Post-Bali Context (2014): 1-245. “Economic Forecast Data”. University of Arizona. 2014. Web. 14 Nov. 2014. “Annual Percentage Change in Real GDP”. US Department of Commerce. 2014. Web. 14 Nov. 2014. Valdés, Alberto and William Foster. “The New SSM: A Price Floor Mechanism for Developing Countries.” International Centre for Trade and Sustainable Development (2005): 2-33. Vankat, John. Vegetation Dynamics on the Mountains and Plateaus of the American Southwest. Springer Science & Business Media, 2013. Wright, Amos J. The McGillivray and McIntosh Traders: On the Old Southwest Frontier 1716-1815. NewSouth Books, 2007. Read More