Towards economic and trade recovery: a multi-disciplinary approach is needed

10 May 2021

At its 21 April meeting, the AMIS Rapid Response Forum (RRF) took stock of the uncertain economic and trade environment caused by the year-long global pandemic. For 2021, the latest IMF estimates point to a 6 per cent world economic growth while WTO projects an 8 per cent rebound in the volume of merchandise trade. However, renewed outbreaks already threaten to undermine this outlook. A resilient, inclusive, and sustainable global economic and trade recovery remains conditional upon the pace and successful deployment of vaccines worldwide. The interplay between trade and health protection has gained prominence. Defeating the socioeconomic impacts of the pandemic and fully restoring trade flows will require strong international policy dialogue, information exchange, cooperation mechanisms and coordinated solutions in a range of WTO disciplines.

So far, policy responses have largely been designed to recuperate mobility; strengthen economic activity; boost household consumption while mitigating critical food security needs; and facilitate international trade flows. On-going efforts to strengthen existing multilateral trade rules would contribute to reactivate the global economy, revive the competitiveness and income prospects of commodity-dependent exporters, and reduce the trade bills facing net-food importers.

In reforming agriculture trade disciplines, the well-known overall policy spectrum of market access, domestic support, export competition, and export restrictions remains under mandated negotiations aimed at a market-oriented trading system. While government assistance in the form of direct payments, income support, public stockholding, and food assistance continues to be rolled out to counter health, social, economic, and food security impacts, dismantling harmful support policies remains a clear priority. A multilateral outcome to exempt WFP's humanitarian food procurement from export restrictions is also potentially within reach.

Although many policy responses were initially intended to facilitate safe trade, a plethora of concerns continue to be raised on restrictive sanitary and phytosanitary (SPS) measures, including import restrictions, pesticide policies and maximum residue levels, testing and certification for GMO-derived food, listing and registration requirements imposed on export establishments, delays in approval procedures, COVID-related port-of-entry rejections, reportedly applied without sufficient scientific evidence or proper risk assessment. Structured peer review and monitoring mechanisms are proving instrumental in providing a forum for discussions, resolving tensions, building common ground and hence contributing to regulatory convergence. In addition, fresh discussions were launched on ways to reaffirm the fundamental principles of the SPS Agreement in relation to the challenges facing sustainable agriculture in the 21st century.

On the ground, the Standards Trade Development Facility (STDF), a global partnership of leading health, agriculture, trade and development experts and institutions, proactively catalyses public and private support and delivers projects that assist farmers, producers, traders and governments in developing countries to meet SPS requirements for trade, based on international standards. The STDF also identifies and promotes good practices to improve SPS capacity development outcomes on diverse cross-cutting topics, including public private partnerships, use of evidence to prioritize SPS investments, electronic SPS certification and good regulatory practice. Since COVID-19 was declared a global pandemic, the STDF introduced a range of specific actions to manage the risk of COVID-19 across STDF's work and emphasized the importance of SPS investments to support economic recovery and longer-term resilience against future outbreaks of pests and diseases.

While the pandemic accelerated countries' adoption of e-documentation, e-certification, and other IT-based tools and technologies, the progressive implementation of the Trade Facilitation Agreement is expected to further expedite the movement, release and clearance of goods, foster cooperation between customs authorities, and streamline customs management. An enabling and inclusive legal framework for e-commerce would also support the emerging digital economy, fostering resilience to future shocks and an inclusive economic recovery. In this regard, the recent finalization of a “clean text” on e-signatures and authentication constituted a major breakthrough. Greater regulatory convergence on e-payments, e-contracts and paperless trading would significantly contribute to greater transparency and overcoming cross-border data flow restrictions.

As outlined above, a multi-disciplinary policy perspective is useful to comprehend the potential synergies and benefits to be gained from efforts under way to update the WTO rule book, meet current and future health, economic and social challenges, enhance the predictability of global supply chains, and create a level playing field in agricultural trade.