Robert Pore's Ag Blog

With the World Trade organization meeting this week in Hong Kong to reach agreement to liberalize agriculture trade, the truth of the matter is getting the perfect trade agreement will prove to be difficult.

Not impossible, but down right difficult.

Here’s an example of what could be described as the perfect trade agreement.The U.S. House of Representatives recently passed the U.S. Bahrain Free Trade Agreement by a margin of 327 to 95. According to the American Meat Institute, the agreement allows for 100 percent of all goods and services traded between the two countries to move without tariffs. “U.S. farmers will also find additional opportunities, especially in meats, fruits and vegetables, cereals, and dairy products,” said U.S. Trade Representative Rob Portman.

Bahrain is a small island nation in the Persian Gulf east of Saudi Arabia about 3.5 times the size of Washington, D.C. and with a population smaller than San Francisco. The trade agreement is the first between the U.S. and a country in the Middle East.

While Bahrain has the benefit of being an oil rich country, what really is the key to the ultimate success of any trade agreement is making sure people get fed.This should be the real goal of any “fair or free” trade agreement — hunger and malnutrition are killing nearly six million children each year. That roughly equals the entire pre-school population of a large country such as Japan.

According to the United Nation’s Food Agriculture Organization, many of these children die from a handful of treatable infectious diseases including diarrhea, pneumonia, malaria and measles. They would survive if their bodies and immune systems had not been weakened by hunger and malnutrition.

In 2004, FAO estimated that 852 million people worldwide were undernourished during the 2000-2002 period. This figure includes 815 million in developing countries, 28 million in the countries in transition and 9 million in the industrialized countries.

Hunger and malnutrition are among the root causes of poverty, illiteracy, disease and mortality of millions of people in developing countries. Feed these people and then you will really have some trading opportunities.

When there are this many people in the world struggling to be fed, it’s anathema that there are any trade barriers or obstacles standing in the path of getting food to those that need it.
But the FAO is concern that the poor could be left behind when WTO negotiations get underway this week in Hong Kong.

According to a FAO report, trade liberalization alone is not enough. Policies and investments must be put in place to allow the poor to benefit from trade opportunities and to protect the vulnerable against trade-related shocks.

According to the FAO report, the benefits of trade liberalization go well beyond the immediate impact on producers and consumers because the reforms would contribute significantly to economic growth and to raising the wages of unskilled workers in developing countries.
Trade can be a catalyst for change, promoting conditions that enable the poor to raise their incomes and live longer, healthier and more productive lives, the FAO report said.
The FAO report has a number of recommendations to ensure that liberalization supports pro-poor outcomes.

It calls for basic market institutions and infrastructure to be set up before opening national agricultural markets to international competition, especially from subsidized competitors.
The report recommends consistent and sustained policies to provide “appropriate signals for pro-poor, pro-growth outcomes” and warns that “stop-and-go reforms” are particularly damaging.

To ensure that the poor benefit from trade, the report urges a twin-track approach that would on the one hand invest in educating people, building institutions and infrastructure and on the other provide safety nets to protect the most vulnerable people in society during the transition to freer trade.

The harsh reality is the number of poor people is fast outpacing any gains the middle class is making worldwide and where much of our trade strategy is aimed at.
The American farmer does have it hard with low commodity prices and high input costs. But they don’t have it any where as hard as those nearly 900 million who struggle to feed themselves and their families on a daily basis.

The ultimate goal of trade liberalization should be to feed the hungry and eliminate poverty.