A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
Pierre Pagesse

Twenty years ago, Marrakesh…

Thierry Pouch,

Permanent Assembly of Chambers of Agriculture (APCA)

Today, the virtues of globalization are falling by the way side as we experience a trade “balkanization” through the proliferation of bilateral agreements. We make the same remark concerning food security and agriculture. The WTO proved it again in Bali last December: It does not have the legitimacy to deal with it.

We highly recommend an editorial by Thierry Pouch1, which, at a time when significant negotiations are being conducted between the European Union and the United States, provides a better grasp of the stakes and potential dangers of free trade applied to agricultural products. While the supporters of a generalized trade opening to agricultural trade are many––although they have been far less numerous for the past few years––we have no choice but note that the dismantling of public support policies and regulatory mechanisms is far from having shown its effectiveness, quite the contrary. In line with this, the liberalization of agricultural trade has, for instance, encouraged the use and impact of exchange rates on agricultural competitiveness.

Agriculture is a global public good and should be considered as such in the international arenas, especially at the WTO, but also in the framework of bilateral trade negotiations. Otherwise, how many price reversals, climate disasters, epizootic diseases and food riots must we experience to become aware of it, and truly build a global governance system capable of safeguarding the future of our farmers and our food security?

momagri Editorial Board

It occurred twenty years ago in Marrakesh. After eight long years of discussions, the Uruguay Round was finally resolved. If the trade negotiations were so complex and so tense, it was largely due to the thorny issue of agriculture. While this economic sector had been subject to a particular exception since the GATT creation in 1947, it was integrated to the Uruguay Round and, eight years later, it was included in a process of trade liberalization.

Since 2001, we regularly deplore the difficulties of governments negotiating at the WTO to unanimously define the regulation procedures for international trade. Yet, the history of international economic relations since the end of WWII shows that regulating trade had already been impeded by obstruction and numerous acts of resistance.

In the framework of the Bretton Woods Agreement in 1944 and along with the IMF and what was going to become the World Bank, a reference was made to the creation of an International Trade Organization (ITO). It proved to be a dismal failure because the United States condemned the project. It was only in 1947 that the General Agreement on Tariffs and Trade––the GATT––was formed, and entity that did not have the attributes of an international organization. The successive negotiation rounds had the particular feature to exclude agriculture from the talks, with the exception of some very technical aspects.

It was during the Uruguay Round (1986-1994) that agriculture was fully included in multilateral talks for the first time. The United States, which were in a declining market position, insisted on opening the GATT to agricultural negotiations, thus stigmatizing European competition at the same time. Once the terms of the agreement were set in December 1993, the agricultural dispute ended in April 1994 with a multilateral trade agreement. One must add that the European Union played a vital role in unblocking the talks with its May 1992 CAP reform.

Celebrating the twentieth anniversary of the Marrakesh is also pointing out the start of a long process to liberalize the international trade of agricultural products, a process which some observers feel must be further explored. It was indeed a significant break from the previous era, during which intervention systems in agricultural markets prevented free trade to develop in accordance with the requirements of globalization, which was seen as virtuous. Year after year, several agricultural activities were exposed to increasingly high competitive pressure, similarly to French poultry meat. The statistical data clearly shows that, after 1996, the slow destruction of the trade surplus began, going from €1.4 billion to €114 million in 2012. While opening trade is certainly a factor, one must also see the impact of the drastic reduction of export refunds, which the EU had agreed to carry out during the Uruguay Cycle.

Since the late 1990s, we could observe a slow but no less real increase in power of exports from nations from the so-called Cairns Group (a group including important emerging nations such as Brazil, Argentina and Thailand), whose share of global exports has increased at the expense of the United States and the European Union. By these 1994 agreements, we observed that the hierarchy of exporting nations became totally turned upside down.

Whichever way you look at it, generalizing the opening of trade to agricultural products has been beneficial to emerging nations, but brought little benefit––or nothing–– to the poorer countries. The generalization of the free trade doctrine nevertheless held great promise. The WTO is persevering in this rationale of dismantling all forms of support to exports. Except for the fact that the development of the global economy has added agriculture to the geo-economic agenda, and except that, in some countries, changing currency parity represents a significant asset for exports, and is not controlled by the WTO since currency is dealt by national economic sovereignty. Why is it not the same for agriculture? In spite of modest progress made last December in Bali, the WTO remains stalled. Thus the circumvention strategies adopted by some nations, such as the United States and the European Union, which negotiate among themselves. The project of transatlantic partnership does not bode well for French farmers, and this is furthermore an unclear aspiration in view of the little information on the contents of the European negotiator’s mandate.

1 http://www.chambres-agriculture.fr/fileadmin/user_upload/thematiques/Economie/LetEco1404_01.pdf
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Paris, 11 December 2018