International Trade Law, Food Security - Research Paper Example

International Trade Law Introduction 2 The WTO 3 WTO and Saudi Arabia 4 WTO and Asia-Pacific 6 WTO and Free Trade 6 Subsidy and WTO 6 WTO and Indonesia 7 The Uruguay Round that has been disappointing for developing countries 11 The reasons 13 The need for WTO to have agreement on Agriculture 14 Some of the effects of WTO 16 The Indian Diary sector and WTO 16 The effect of rice import in the country Philippines 17 The effect of Brazilian and WTO 17 Conclusion 17 Bibliography 18 Introduction The three central pillars of food security are food availability, or adequate food production; economic access to available food; and nutritional security, which often depends on the availability of nonfood resources such as child care, health care, clean water, and sanitation. There are lots of security reasons that the people will be aware of like the national security, country security, and so on. The new type of security that has been said is the “food security”. The security has been thought of as absence of lowered risk and there has been steps done by everyone to ensure that the national secrets are not be compromised. Food security has close meaning with food and 1996 World Food summit has said that food security will be existing when each and every person will be having physical and economic access to healthy and nutritious food and that has to be received in necessary quantity so that the daily needs are covered so that healthy and active life has been covered. In simple terms the meaning of food security means that irrespective of the gender of the person, every person will be having enough food to be healthy and they do not have the fear that the situation will not change in near future. The developing countries have a long history of having being engaged with issues of food security. The first pillar of food security can be said as food producers. There are millions of women who will be working as farm workers and they will be contributing to the national agricultural output, maintained of environment, and the food security of family. The absence of the credit has meant that farmers  has been forced to adopt less to new technology, to hire labor when it is needed, not being able to grow crops that require large amount of cash, or being able to purchase capital goods. The second main pillar of the food security is to make sure that the children and household members including women to get the required food. Farmers have been seen as living in poorer condition in developing countries and poverty has been seen as the major threat to the food security in developing countries. The farmers in developing countries has been seen to be affected by low education levels and by the fact that the farmers  has been married earlier .That has meant that farmers has been starting to look after the family from early age itself. The third pillar can be attributed to well food utilization. By the meaning of this is that food has been used for developing the physical and cognitive development and the aspect of care, paying adequate time, attention to meeting the physical, mental and social needs of the person. There has been two issues that the farmers globally has been facing 1. WTO 2. There has been development of technology in all aspects of life like in agriculture production. The WTO The World Trade Organization (WTO) is an international organization that has been situated at Geneva, Switzerland. The aim of the organization has been to encompasses the rules of trade in goods, services, and intellectual properties under the agreement of WTO.The WTO agreement could be divided into four parts that is 1. general Agreement on Tariffs and Trade (GATT), 2. General Agreement on Trade in Services (GATS), 3. Trade–Related Intellectual Property Rights (TRIPS), and 4. the agreement on Dispute Settlement Procedure (DSP).1 The aim of the essay has been to deal with the role of WTO in trade and development of the world economy, and specifically the content of the agricultural agreement on agriculture and its impact on the agricultural economy of Indonesia, Saudi Arabia and other developing countries. The major objectives of WTO could be classified as liberalization of trade , privatization of services, increased access to market, the lessening of agriculture and export subsidies, the improvement of standard of living of people all over the world, the standardized farm output that has been given ,  more international competitive agriculture trade,  more foreign investment in farming, more   employment opportunities, and more Trade-Related Intellectual Property Rights (TRIPs). The salient features of WTO could be generalized as follows that the WTO would be acting as a forum for continuing negotiations on trade and investment rules, would be settling the disputes between member countries, would be increasing free trade through the reduction of tariffs and non-tariff barriers, would be reducing unfair practices like the export subsidies and dumping. The aim of the World Trade Organization has been to make the world free trade area. It has been estimated that with free trade production and consumption has been improving efficiency points.WTO aim has been to ensure that the lowest price to consumers and  efficient production system.   The developing countries would be given a grace period to make adjustments that would be suited to the domestic situation. There would be an immediate need to create awareness among the stakeholders that would meet the impacts of WTO Agreement on Agriculture in the country. WTO and Saudi Arabia There has been inclusion of China, Jordan2, Oman3, and others into the WTO from 1995-2004, and that has meant that WTO has meant  it has been accepted widely. 4There have been more countries that have been lining up to get a seat in the WTO. Saudi Arabia has been an entry to WTO also5. For Saudi Arabia, WTO has been considered as a very good status in international circle. Saudi Arabia has been considered as an  big partner in the WTO from the gulf area.  6.The  Kingdom  had been looking to protect the oil economy using WTO..7 The threat that Saudi Arabia faces when it has joined the WTO could not be limited to the Agriculture zone only but it could be extended to construction sites also and that could be said as the Saudi construction firms would be forced with new opportunities and challenges. The construction firms have to deal with new business environment that would be changed by the GFOL. The essay will not be covering the issue of Construction in detail but would be covering the issue of agriculture only. It has been found out that countries has been using WTO as an platform for development .8 Many countries like US and EU has been interested in entering into an agreement with Saudi.9 US companies has been interested in entering an agreement with Saudi Arabia. There could be a saying that would be saying that entry to the  WTO by Saudi Arabia would mean that the country would be flooded with  cheap foreign imports, and that would be instrumental in destroying  local industries and removing the already difficult unemployment situation that has been  moved forward by  financial crisis. The favorite of WTO says that the benefits are in long run. The WTO would be hard to digest in the initial stages but would be becoming friendlier as the year goes forward. WTO makes Saudi companies to enter global arena. That would be benefitting the consumers with the WTO opening the Saudi economy more.. That would mean that the Saudi exporters would be presented with equal and non-discriminatory access to WTO countries. WTO and Asia-Pacific That has been a mainstay for the livelihood and would be offering employment opportunities that have been present in all the countries of the region. The agriculture sector has been the main economic stay in Asian regions. 10The agriculture could be considered as a source of income and employment for the majority of population in the region of Asia Pacific. It has been seen that 65% of the regions’ population would be in the rural areas. The large share of agriculture in total labor could be attributed to the availability of large land area that has been available for cultivation and the female farm family workers. Pakistan’s’ national economy has been boosted by agriculture and it has been a major contribution. It has been the largest contributor to the foreign exchange earnings by contributing about 70% of total foreign exchange earnings .11 WTO and Free Trade WTO could be considered as an engine of growth, and that does not mean that the the free trade would not be having any problem especially for the developing countries. The reality could be termed as different s many developing countries will not be having enough capacities to produce and to fulfill the export needs of the developed countries markets .This could be due to the fact that the developing countries would be having lack of efficient technology and skills. That would also mean that the developing countries would be pricing more than the developed countries. That would create a situation in which the demands for the domestic products in the developing countries would become lower relative to the demand for the developed countries’ commodities. This type of competition in the domestic production activities of the developing countries would be causing a high level of unemployment and would be reducing the income level of the people.   WTO has been said as fight against developing countries. Subsidy and WTO   . WTO and Indonesia The WTO agreements on agriculture would be tending to abolish tariffs and subsidies both at the cultivation and trade sectors. Indonesia has been forced to import rice.   That has meant that the government would be applying a very low level of tariff duties and that has abolished tariff for rice imports. There has been a big flow of imported rice in the Indonesia’s market. The prices of the domestic rice has been more than the imported rice. The domestic rice holders would be losing income. That would mean that they would be reluctant to plant rice. The twenty years (1975 –1996) saw that the Indonesian economy has become industry economy. It has been seen in the year 1975 that agriculture contributed 30.2% to GDP that was almost equal to other sector’s contribution to the GDP.The other contributors were industry 33.5% and services 36.3%. That had changed from then onwards and agriculture has been lessening and in 1996 it has been 15.4%, while the industrial sector’s has been approximately 40.0% and the service sector had been reaching 45 %. From the employment point of view, in 1996 agriculture had been providing  at least half of the employment with other sectors giving the other half.Rice was the staple food for the Indonesians. There was negative policy in the issue of rice from the government. The farmers were forced to accept the low prices and that has meant that they were forced to work for more time without getting the reward they had put on the fields. Rice has been having a good influence on the mind of the people and that has meant that more farmers were getting affected and that was influencing the farmers life and that had an profound effect on the consumers. Rice was meeting the aspiration of the people and that was getting an international look and the import has been breaking the back of the farmers community of Indonesia.The factor of the rice has to be considered as not as a mere staple food but has to be addressed as the most important food and that has been affecting the economy of Indonesia. From 1998, rice imports in Indonesia has been  liberalized and it had  caused Indonesia to become  more dependent on rice imports. The trade liberalization in Indonesia had come after the economic crisis and it has been a upliftment. To recover from its economic crisis, Indonesia has been guided forward by  WTO,IMF and other agencies.The liberalization and globalization opened the Indonesian markets. The international rice market has been opened to free trade, and that has meant that the more export has been taking to developing countries . The Government of Indonesia had signed a letter of intent with IMF and that meant import tarrrifs has been less. The domestic supply has been less and that has meant that rice price has been high. The import rate of rice would be the main cause of problem in Indonesia.12 The farmers were being forced to sucide. WTO has affected the rice production in Indonesia.RICE HAS  BECOME MUCH CHEAPER and this has happened after the imports has taken place. There has been heavy stocking of rice by developed countries and that has been dumped into developing countries at higher price. The import has meant that rice price has been  bought down. The WTO has meant that there has been many increased sucide rates and that has been happening all over the world. Modern technologies of using fertilizers has affected the farming in Indonesia. The chief imports are from America, Thailand, Japan, Vietnam, and Myanmar ,soybeans are imported also from the USA13; sugar, fruits, meats, and other dairy products  from USA, Australia, Thailand, and China. On the other hand Indonesian exports are mostly limited to the extractive commodities, such as oil, coal, and timber14. This means in the long run Indonesia will deplete its natural resources much more quickly, because this  has been the main source of foreign exchange for import payment as well as for foreign debt repayment.15The impact of WTO agreement on agriculture in the rice sector has been decrease the rice production of Indonesia, but would be improving the quality of the environment due to the changes in the agricultural and rice production practices.16 There has been maintaining the rice production and natural environment quality, farmers would be stipulated to work more efficiently. The improvement of the environmental quality would be balanced by the depletion of the natural resources that could be termed as oil and timber that would reduce the speed of the economic development of the country due to the reallocation of resources and the environment quality might also be worsened.17 When the standard of living of the people has not been improving, it might be expected that the quality of the environment would be worse because attention would be directed more on the provision of basic necessities and less on the environment.18 The role of agriculture in gross domestic product has been declining since 1975 and has become less dominant by the end of 20th century and early of 21st century.19 The economic crisis of 1978 – 1979 had brought a pressure for economic and trade liberalization as suggested by the IMF and the World Bank to the Government of Indonesia. 20Trade liberalization on agricultural products including rice had resulted in a big flow of foreign agricultural products including rice into the Indonesian market.21 The free liberalization argument is to bring all cheap products to the poorest groups in the country and would be encouraging the local producers to produce with more efficient ways.22 Most Indonesian farmers are small farmers. The imported cheap rice would be putting pressure on the local rice, and would be causing the local rice producers to suffer from a very low price of rice.23 They lost their incomes and incentives to plant rice but had very little alternatives choices.24 The farmers needed government protection. The disappearance of rice crops in Indonesia, has been creating problems for life and employment of a large number of poor people in the villages, will also develop social, political, and environmental problems.25 The size of benefits and costs of rice crops would be depending on the adoption agricultural technology and it is known that its backward and fore ward linkages are known very large.26 The Uruguay Round that has been disappointing for developing countries The agricultural sector has been integrated into the framework of WTO rules since 1994.27 The former exemptions of the agricultural sector from global trade rules have officially ended then.28 The world agricultural markets before 1994 were characterized by huge agricultural subsidies used mainly in the United States and the EU and by protectionism against agricultural imports exercised by nations, developing as well as developed countries.29 The Agreement on Agriculture (AoA) submitted the entire agriculture sector to the general principles of the WTO, namely liberalization, the most favored nations (MFN) principle and non-discrimination.30 The reform achieved in the Uruguay Round, however, was only a partial liberalization. In it the Member countries agreed to (1) open up national markets (with no obligation for least developed countries,LDCs), (2) to cut export subsidies by a maximum of 36 percent, and (3) to cut national subsidies to the agricultural sector.31 While many developing countries in the beginning has been in favor of this agreement, because they were expecting better access to the markets in industrialized countries.32 The opening up of national agricultural markets for food imports has really put pressure on  small and medium producers in developing countries as they has been in  direct competition with producers globally. 33The poorer developing countries has been seeing small-scale producers. This could be said as  in Africa mostly women, who is having poor access to production factorslike infrastructure support, credits, land and water or seed and fertilizers, and this could be contrasted with the picture in  developed countries  where farmers has received substantial subsidies for decades. 34Even the Organization for Economic Cooperation and Development OECD35 has been forced to admit that  farmers in industrialized countries will not be having any natural advantage but the advantage they have will be due to the fact that they were supported by the government. The  developing countries  has been opening  up their markets, developed country farmers would have  to compete with a range of export subsidies in industrialized countries. 36The poor developing countries would not be able to pay subsidies to farmers and at the same time would be forced to remove trade barriers, and that would be causing the problems. The reasons Few developing countries could increase their agricultural exports.37 Many developing countries had to give up all their agricultural policy instruments, and farmers were submitted to unfettered competition with subsidized agricultural producers from the EU and the United States38. Food imports in many regions of the Third World has increased and local food production is decreasing.39 In several developing countries, key segments of agricultural production have been destroyed, because they could not compete with cheap imports from abroad.40 Small farmers, often only poorly endowed with production factors, produce food or other crops on their lands.41 If they lose their markets to rapid changes in the import regime, they often have no option to continue their food production.42 If they lose their markets, small farmers are not only losing their source of income, they are mostly left without a viable economic alternative to earn a living. Hunger and malnutrition start if rural populations can no longer subsist from the resources of their own farming.43 From a human rights perspective a regular check of the outcome of trade agreements on the right to adequate food should be done. 44The respective human rights institutions should be made accountable for this. Countries should have the right to restrict agricultural trade on the grounds of right to food requirements, where trade liberalization endangers small and medium agricultural producers. Countries would have the right to choose the adequate policy mix to implement their human rights obligations to safeguard the right to adequate food for their population.45 The need for WTO to have agreement on Agriculture GATT that could be termed as WTO’s predecessor had succeeded largely in freeing trade by removing barriers that would be causing cause obstacles to the movement of certain goods across borders.46 This has been the policy till 1994 and trade rules has applied predominantly to manufactured goods rather than agricultural products.47 Before this major trading countries like the US and the EU had insisted on exemptions and waivers from GATT to help them to give enormous subsidies to their agricultural sectors.48 The resulting artificial maintenance of high levels of production had led to a situation of sale of agricultural surpluses on the world market at prices below their cost of production, a practice known globally as dumping. Dumping has continued even after the creation of the WTO.49 The US and EU began showing interest primarily in the creation of WTO because  their domestic agricultural subsidy programmes has been becoming so expensive as to be unsustainable.50 Food-exporting developing  countries favoured rules as a means to stabilize and increase world prices for food exports, this has been done in the hope that additional export earnings would help to  remove poverty and to further development goals.51 There has been many developing country markets that were opened to cheap and dumped agricultural products from the US and EC, due to International Monetary Fund (IMF) and World Bank structural adjustments programmes that required them to liberalize their economies and open their markets to foreign products.52 WTO will effect negatively to small farmers. Such farms would disappear in the long run due to the process of economic cannibalism. Multinational corporations will enjoy broad-based resources in credit, investment, inputs, big machinery, large land ownership, high-valued inputs and outputs, and competitiveness. 53They will eventually swallow small farms. The existing small farmers would either opt for signing contracts for production for large corporations or serve as paid employees at the mercy of the management of multinational corporations.54 Some of the effects of WTO Positive effects. New technology, high employment,increase in production and economic activity, competitive exports, handsome share of taxes to the government.55 Negative effects. Non-sustainable production, monopoly of high-valued input package by MNCs, replacement of food crops by cash crops, food security problem, rural migrations to urban areas, blow to local agricultural machinery manufacturers.56 In theory, trade liberalization enhances efficiency, thus enabling trading countries to make social gains. 57The growth of agricultural production has been one key to reducing poverty in many developing countries.58 That has been the case that agricultural imports could complement local production and would be providing alternative sources of nutrition and dietary choices. 59The exporting local produce could offer new markets and opportunities for employment and income.60 The Indian Diary sector and WTO EU has been having a strict effect on the diary sector. In 1999-2000 India imported over 130,000 tonnes of EU skim milk powder. Ironically, India has been the biggest producer of milk in the world.61 What is more worrying for India is that there are no signs of declining productivity growth for many agricultural products in India which will have severe implications for the majority of the population62. The effect of rice import in the country Philippines Rice has been the biggest production in Philippines. The government has been forced to open the markets. The imports has been accelerated by fast foreign supply and that has meant that the Philippines has been effected by WTO and that has affected the rice production. The effect of Brazilian and WTO Brazil challenged the US subsidies to its cotton producers, saying that they caused a decline in world cotton prices and reduced Brazilian cotton exports, thereby increasing poverty among farmers dependent on cotton production.63 It has been agreed that Brazil that US subsidies to its cotton producers were in contravention of WTO rules on agriculture.64 Conclusion There has been much debate about the role played by WTO in the European Union. The shaping of members laws was or is under scrutiny also.WTO have  not been found to be major contributor of agriculture and play in primary role in ensuring that the food and nutritional security of developing countries  has been met. Food and Agriculture Organization of the United Nations  has stated that farmers  has been seen to achieve more in terms of food production, provision of using agriculture more, and utilization if agriculture policy makers,researchers,scientists,extension agents, policy makers was being able to give a level playing field. Bread for the World Institute has stated that there has to be a conscious effort to be made to reduce the asymmetry between farmers of developing and developed countries and that means more access to agricultural and other resources and the developing countries has to be taught to give more expertise in using latest technology. The greatest technological advancement that has been made in the developing countries like India has been the green revolution and white revolution. There have been many advances in agriculture like the biotechnology and many increased seed and crop variant that will increase the agricultural output and that has to be used carefully. The example can be said from the Rwandan Agricultural research institute, International center for tropical agriculture has tied up with local farmers and this has been done to breed improve bean variety. The farmers have been encouraged to try out the improved variety of beans that has been developed at the production site and that has helped to develop the growth of improved variety of beans. Bibliography Azzam, H. (1998). “WTO and the Globalization of Middle East Enterprises.”Middle East Executive Reports, 21(4), 9-9, and 17-22.    Azzam, H. (1999). “Joining the WTO is Expediting Liberalization Policies in Saudi Arabia, Jordan, and Oman.”  Jordan Embassy US, Downloadable athttp://www.jordanembassyus.org/111899011.htm,    Arab News (2003). “Arab News Articles.” Downloadable at www.arabnews.com,published during Mar 2003 – Dec 2003.  Chaudhry, M.A., 2001. Country Paper in Asian Productivity Organizations. Impact of the Changing Economy on Small Farmers in Asia and the Pacific. pp: 284–95. Ceramic Industry Troy. (2001). “Saudi Arabia Continues Efforts to Enter WTO.”Ceramic Industry Troy, 151 (6), pp. 14. Cousins, M. (2004). “Transparency: What Does It Mean?” Arab News, Saturday,17 Jan 2004, pp., 27.   Agricultural Census Organization, 1990. Census of Agriculture. pp: 16–22.  Deomampo, N.R., 2001. Policies and Programs for Small Farmers’ Adjustment to Structural Changes. pp: 65–70. Asian Productivity Organization, Tokyo, Japan. EIU (2004c). “Country Report: Jordan,” The Economist Intelligence Unit, London,UK, May issue, pp. 5.    EIU (2004b). “Country Report: Oman.” The Economist Intelligence Unit, London,UK, March issue, 2004, pp. 5. EIU (2004a). “Country Report: Saudi Arabia.” The Economist Intelligence Unit,London, UK, February issue, 2004, pp. 5.   James Kynge, India  Fears Food Crisis as Imports Hit $14 billion, Financial Times, 22 August, 2004  Statistics Division, Government of Pakistan, Islamabad, Pakistan Keck, A. and Low, P. (2004). “Special and Differential Treatment in the WTO: Why, When and How?” Staff Working Paper No. ERSD-2004-03, Economic Research and Statistics Division, World Trade Organization, May, 2004.   M. Suparmoko,THE IMPACT OF THE WTO AGREEMENT ON AGRICULTUREIN THE RICE SECTOR,Paper presented at the Workshop on Integrated Assessment of the WTO Agreement on Agriculture in the Rice Sector, to be held in Geneva, Switzerland, on Friday April 5th, 2002,viewed from http://www.unep.ch/etb/events/events2002/05AprilAgri/indonesi.pdf M. Suparmoko,THE IMPACT OF THE WTO AGREEMENT ON AGRICULTURE IN THE RICE SECTOR,Paper presented at the Workshop on Integrated Assessment of the WTO Agreement on Agriculture in the Rice Sector, to be held in Geneva, Switzerland, on Friday April 5th, 2002,viewed from http://www.unep.ch/etb/events/events2002/05AprilAgri/indonesi.pdf Michael Windfuhr,Impact of the WTO Agreement on Agriculture On the Right to Adequate Food,http://www.ppl.nl/bibliographies/wto/files/1740.pdf Chapter 6 The WTO Agreement on Agriculture,http://www.3dthree.org/pdf_3D/Guide-075Ch6.pdf SARFRAZ AHMAD Economics, Agri. Economics, Sociology and Anthropology Department, University of Arid Agric., Rawalpindi, Pakistan,The WTO Agreement, Corporate Agriculture Farming andSmall Farmers’ Economy,http://www.fspublishers.org/ijab/past-issues/IJABVOL_5_NO_4/13.pdf Read More