Sustainable trade
Trade, agriculture, and development: Meeting global challenges to Commonwealth countries
Published 17 September 2024
Agricultural trade plays a critical role in achieving economic and social goals, particularly for the most vulnerable countries. Yet, it is the sector that faces the most intractable obstacles to international exchange. Finding the most efficient paths to facilitate the free flow of agricultural products needs to be a priority for policymakers worldwide.
Raising agricultural productivity, promoting easy access to nutritious food, and facilitating trade in agricultural commodities in a sustainable way are essential to advancing global living standards and well-being. Moreover, agricultural challenges stand at the core of contemporary systemic problems: poverty, insecurity, inequality, climate change, and even geopolitical conflict. Cooperation in agriculture, therefore, should be at the top of the global policy agenda.
Today, the environment for economic cooperation is complicated by both positive and negative trends. On the positive side, recently established "mega-regional" trade groupings are breaking new ground particularly in terms of South-South cooperation. Notable examples include the African Continental Free Trade Area (AfCFTA), which brings together 55 countries of the African Union, and the Regional Comprehensive Economic Partnership (RCEP) agreement, spanning 15 mostly developing economies in East Asia.
But other forces are pulling the world in the opposite direction. Multilateral trade cooperation under the World Trade Organization (WTO) has been struggling; the last attempt at a "single undertaking" of trade and investment liberalization, the Doha Development Agenda, reached an impasse in 2015. The organization’s 13th Ministerial Conference in March 2024 failed to make progress in some key areas, such as public stockholding for food security purposes and enhanced disciplines on agricultural export restrictions.
Download Trade, agriculture, and development: Meeting global challenges to Commonwealth countries by Michael Plummer:
Even more ominously, in the past few years trade conflict has reached levels not experienced since the 1930s. Growth in trade in goods and services almost came to a halt in 2023, rising only by 0.2% – the slowest in a half-century outside global recessions – at the same time that trade restrictions are surging and the number of trade-liberalizing regional trade agreements (RTAs) has been falling. Due to its importance in meeting the most basic needs of a country’s population, agricultural trade has always been constrained by a variety of barriers and is now acutely threatened by this trend.
Meanwhile, climate change will severely impact agriculture and hurt in particular the poorest and most vulnerable countries where farming is the main economic activity of households. Poverty levels have decreased significantly with economic reforms and global integration that began in the 1980s, but rising global temperatures could reverse this trend. The World Bank estimates that climate change could increase the number of individuals in poverty by 68-135 million by 2030, mostly in the world’s poorest regions. Other research estimates that a temperature increase of 1% Celsius increases not only poverty by 9.1% but also the Gini inequality index by 0.8%.
This paper was co-commissioned by the Hinrich Foundation and the Commonwealth Secretariat for the Commonwealth Heads of Government Meeting in 2024. Authored by Michael G. Plummer, Eni Professor of International Economics at Johns Hopkins University, it analyzes how trade can raise agricultural productivity and provide for food security in an age of rising protectionism, with policy recommendations toward these goals.
© The Hinrich Foundation. See our website Terms and conditions for our copyright and reprint policy. All statements of fact and the views, conclusions and recommendations expressed in this publication are the sole responsibility of the author(s).
Author
Michael Plummer
Michael Plummer is the Eni Professor of International Economics as well as Professor of International Economics at SAIS Europe, a position he has held since 2001.
Have any feedback on this article?
Related Articles
