C- The World Trade Organisation
The WTO has assumed a primary role in the food aid arena as
food aid is closely linked to trade, as was evident in looking at the FAC and
FAO structures earlier. In addition we noted that the revision of the primary
international food aid instrument, the FAC, is being held on ice pending
progress in the Doha Round of trade negotiations. One of the reasons why the
WTO has developed a prominence in the food aid arena is because it has a
binding and enforceable dispute settlement system which is absent in the FAC
and the FAO. In addition to its WTO unique provisions, the WTO's legal text
does also make cross reference to both the FAC and the FAO treaties within its
texts, thus confirming the authority of the WTO to deal across the three
treaties in a manner of speaking. The two places where food aid is notable in
the WTO aquis is firstly under the Agreement on Agriculture and secondly in the
«Decision on Measures Concerning the Possible Negative Effects of the
Reform Programme on Least-Developed and Net Food-Importing Developing
Countries». These are now discussed in turn.
22 Mousseau Frederic, (2005) Food Aid or Food Sovereignty?
Ending World Hunger in our time, The Oakland Institute, p.6.
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1- The Agreement on Agriculture
When the WTO Agreement on Agriculture was negotiated food
exporting countries were suspicious that International Food Aid might be used
by some large subsidy using countries as a ruse to avoid their reduction
commitments on export subsidies, which were essentially prohibited save for
those scheduled. The essence of the concern is that the distinction between
food aid and commercial sales can be unclear and it may happen that a country
claims to be providing food aid while it is really exporting food at a
subsidized price, on what would be a purely commercial sale absent of the
subsidy. It is for this reason that Article 10 on the prevention of
circumvention of export subsidy commitments found its way into the agreement.
The aim was to ensure that there was no foul play while at the same time
recognising that there was a perfectly legitimate role for aid23.
The text of Article 10.4 of the Agreement on Agriculture is directly addressed
at food aid donors and lists 3 conditions that they must adhere to.
Interestingly the text makes cross reference to the FAC and to the FAO and thus
includes their disciplines by way of borrowing and subsuming these disciplines.
In short:
- Donors cannot «tie» (that is
conditionally connect) international food aid directly or indirectly to
commercial exports to the recipient country.
- Food aid transactions, including aid which is monetized,
must adhere to the FAO's `Principles of Surplus Disposal and Consultative
Obligations' and the system of UMRs.
- The food aid must be provided to the extent possible fully
in grant form or on terms `no less concessional' than those provided for in
Article IV of the Food Aid Convention 1986.24
23 This is supported by a reading of the preamble to the
Agreement on Agriculture which indicates that «commitments under the
reform programme should be made in an equitable way among all Members, having
regard to non-trade concerns, including food security and the need to protect
the environment.»
24 The 1986 FAC today equates to the 1999 FAC as currently
renewed to July 2011.
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In addition to this Article 10.3 is also informative in
assigning the burden of proof in instances where there is suspicion of export
subsidy commitments being flaunted. The provision requires that a country
claiming that a quantity of a food product exported in excess of its reduction
commitment levels is not subsidized (as would be the case for food aid
shipments), that exporter has the onus to establish that no export subsidy has
been granted in respect of the quantity of exports in question. This is a
stringent provision as the onus is squarely on the exporter to justify the
claim that he remains within his WTO obligations.
2- Decision on Least-Developed and Net Food-Importing
Countries
The preamble to the Agreement on Agriculture states that
`commitments under the reform programme should be made in an equitable way [..]
taking into account the possible negative effects of the implementation of the
reform programme on least- developed and net food-importing developing
countries'. This is then addressed in substance in Article 16 where the link is
made to the so-called «Decision». The text states that developed
countries must take actions provided for in the «Decision on Measures
Concerning the Possible Negative Effects of the Reform Programme on
Least-Developed and Net Food-Importing Developing Countries» (LDCs
& NFIDCs).
Essentially in the Decision it is recognised that while the
implementation of the Uruguay Round will generate increasing opportunities for
trade expansion, in the scheduled reform programme LDCs and NFIDCs may
experience constraints in the availability of adequate supplies of basic foods.
It is this concern that the Decision serves to address. The Decision has three
main thrusts. It determines that:
- There will be a review the level of food aid established
periodically under the FAC and to initiate negotiations' in the appropriate
forum to establish a level of food aid commitments sufficient to meet the
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legitimate needs of developing countries.
- Guidelines are established to ensure that a growing part
foods aid is
provided to LDCs and NFIDCs in full grant form in line with the
FAC.
- Full consideration under donor aid programmes should be
given to requests for technical and financial assistance to LDCs and NFIDCs to
improve agricultural productivity and related infrastructure.
3- The Doha Negotiations
In looking ahead we see that although the elimination of
commercial displacement is the primary objective, all food aid deliveries, both
emergency and non- emergency, will be subject to some basic provisions such as
the food aid being needs driven, provided in fully grant form, not tied to
commercial exports of agricultural or other goods and services and not linked
to market development objectives. These disciplines, which are important for
many WTO Members, simply underlie the fundamental rationale and purpose of food
aid and that food aid should not be used as a means to profit in other areas of
international trade; i.e. food aid should not be used as a means to develop
market share via increased access to one country's product which gains a foot
hold with local consumers who then purchase the good, or tied to the provision
of the purchase of other goods and services in the donor country.
Food aid has been one of the more controversial issues in the
WTO Doha negotiations on agriculture. To some extent this was based on
substantive issues as some WTO Members sought to restrain what they considered
to be the circumvention of export subsidy commitments by the US through large
quantities of food aid donated in-kind. But, to some extent some countries'
positions were political as they were giving up export subsidies and wanted to
make sure others made equivalent commitments for any export support provided
through food aid, export credits and exporting state trading enterprises.
However, nobody wanted to create a situation where new WTO
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disciplines could restrict future food aid transactions. To
ensure that the new disciplines do not create problems for genuine food aid,
WTO Members reaffirmed their commitment to maintaining adequate levels of food
aid and that the food aid disciplines do not unintentionally impede the
delivery of food aid provided to deal with emergency situations.
The actors of international humanitarian food
aid
CHAPTER 2
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46
International humanitarian food aid in the North-South
cooperation: the case of Cameroon 2014
In the IFA field, there are many actors. In one side, we have
those who provide food known as food aid donors; and in the other those who
benefit of this aid, the recipients. Food aid could be provided bilaterally
i.e. directly from one donor government to the recipient government;
multilaterally specially through the WFP, and finally through NGOs. Since 2000,
donor commitment to multilateral food aid has increased by 75 per cent in
response to food security challenges in the poorest countries. The percentage
of bilateral food aid reached its lowest reported level in 2011, as it can be
seen in the figure below:
Multilateral 62%
NGOs 34%
Bilateral 4%
Figure 4: 2011 Food Aid Deliveries by Channel. Source:
WFP
I- The major donor countries
Contemporary IFA was initiated by the USA and Canada in the
early 1950s. The US immediately became the largest provider of food aid, a
predominant position that has been maintained over the past fifty years, with
millions of tons of US-produced food transported and dispatched to all
continents.
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