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editors’ note

Food insecurity,
trade and UNLDC IV
PUBLISHED BY
South Asia Watch on Trade, THE resurgence of escalating global food-price inflation since mid-2010
Economics and Environment (SAWTEE) and its transmission into South Asian economies is yet another reminder
about the region’s vulnerability to worsened food insecurity and increased
REGIONAL ADVISORY BOARD poverty. With a 10 percent increase in domestic food prices enough to push
Bangladesh tens of millions into poverty, it also highlights the transitory nature of the
Dr. Debapriya Bhattacharya gains recorded in poverty reduction. The incongruity of an appallingly high
India rate of hunger and undernourishment coexisting with one of the highest eco-
Dr. Veena Jha nomic growth rates persists.
Nepal Increased investment in agriculture, neglected for decades despite being
Dr. Posh Raj Pandey the biggest employer, is critical for boosting production through higher pro-
Pakistan ductivity. This is doubly important as the adverse impacts of climate change
Dr. Abid Qaiyum Suleri on agriculture are already being felt, and worse consequences are predicted.
Sri Lanka However, adequate production or supply does not automatically guaran-
Dr. Saman Kelegama tee effective availability and access, as demonstrated, for example, by the
acute prevalence of hunger and undernourishment in India despite surplus
EDITOR-IN-CHIEF production and state silos bursting at the seams. Inefficiencies, leakages and
Ratnakar Adhikari corruption in the public storage and distribution systems also explain the
paradox of hunger amid plenty. Plugging these can go a long way towards
EDITOR ameliorating food insecurity in several South Asian countries.
Kamalesh Adhikari Because food insecurity is a common challenge facing all South Asian
countries, attempts have been made to tackle it collectively, under the aegis
ASSOCIATE EDITOR of the South Asian Association for Regional Cooperation (SAARC). Yet, even
Puspa Sharma four years after the establishment of the SAARC Food Bank, the reserve that
is supposed to help countries tide over normal food shortages or emergen-
EXECUTIVE EDITOR cies is yet to be operational. That countries reeling under natural disasters
Paras Kharel have not been able to get any succor from the Food Bank is telling about the
cumbersome procedures that govern it.
STAFF CONTRIBUTOR The potential of intra-regional agriculture and food trade liberalization
Chandan Sapkota for addressing food insecurity is yet to receive due attention from policy
makers. In the South Asian context, export restrictions are at least as impor-
DESIGN tant as, and at times more important than, import restrictions in hindering
Bipendra Ghimire such trade. Experience shows that export restrictions by surplus producers
Effect, +977-1-4433703 within the region aggravate the severity of food crisis for net food-import-
ing countries, which form the majority in South Asia. On the import front,
COVER & ILLUSTRATION tariff, para-tariff and non-tariff barriers impede trade in agriculture and food
Abin Shrestha products. The agriculture and food products on the sensitive lists of Mem-
ber States under the Agreement on South Asian Free Trade Area should be
PRINTED AT reviewed and gradually removed, taking into account rural development,
City Offset Press, Lalitpur livelihood enhancement and food security goals, and instituting safety nets
for the losers from liberalization; and regional sanitary and phytosanitary
measures and technical standards should be developed and adopted.
The least-developed countries (LDCs) are among the least equipped to
tackle the problems of food insecurity, poverty and adverse climate change
impacts. The outcome of the Fourth United Nations Conference on the Least
P.O. Box: 19366
Developed Countries (UNLDC IV), held in Istanbul in May, has been a dis-
Tukucha Marg
Baluwatar, Kathmandu, Nepal
appointment for them, including South Asia’s four LDCs. The Istanbul Pro-
Tel: +977-1-4424360/4444438 gramme of Action is high on rhetoric but devoid of quantified, time-bound
Fax: +977-1-4444570 targets. It does not address the implementation gaps with regard to its
E-mail: sawtee@sawtee.org predecessor, the Brussels Programme of Action. No additional aid resources
Web: www.sawtee.org have been pledged, be it for enhancing the productive capacity of LDCs or
helping them adapt to climate change, thus tending to make development
Published with support from
partners’ commitments sound like hollow promises. Nor does it provide
for a robust monitoring and evaluation mechanism, the need for which was
widely emphasized in the run-up to the Istanbul Conference. „
contents Trade Insight Vol.7, No.1, 2011

CIVIL SOCIETY ADVOCACY 4


Recommendations
on food security

IN THE NEWS 5

SOUTH ASIA ECONOMIC SUMMIT 8

Regional Economic Integration,


With proper safety Climate Change and Food Security

nets in place, trade FOOD SECURITY


has the potential to SAARC Food Bank and
help address food Food Security in Bangladesh 13

insecurity. Food Distribution System


in Nepal in the Context of
SAARC Food Bank 18

COVER FEATURE 20 TRADE AND ENVIRONMENT 25


WTO Negotiations on Environmental
Goods: South Asia’s Interests

PARTNERSHIP FOR
DEVELOPMENT 29
Let-down at UNLDC IV

International TRADE POLICY REVIEW


WTO Report Card on
Sri Lanka’s Trade Policy
31

trade crucial for UNDERSTANDING WTO 35


Agriculture Reform Programme:

food security Concerns of LDCs and NFIDCs

BOOK REVIEW
Climate Change and
37

Food Security in South Asia

NETWORK NEWS 38

INTERVIEW 11
SAWTEE NETWORK
BANGLADESH
1. Bangladesh Environmental Lawyers’
Association (BELA), Dhaka
2. Unnayan Shamannay, Dhaka

INDIA
1. Citizen consumer and civic Action
Group (CAG), Chennai
2. Consumer Unity & Trust Society
(CUTS), Jaipur
3. Development Research and Action
Group (DRAG), New Delhi

Climate Change NEPAL


1. Society for Legal and Environmental
Negotiations and Analysis and Development Research
(LEADERS), Kathmandu
2. Forum for Protection of Public Interest

South Asia (Pro Public), Kathmandu

PAKISTAN
1. Journalists for Democracy and
Human Rights (JDHR), Islamabad
2. Sustainable Development Policy
Institute (SDPI), Islamabad
CLIMATE CHANGE 13 SRI LANKA
1. Institute of Policy Studies (IPS),
Colombo
Views expressed in Trade Insight are of the authors or editors and 2. Law & Society Trust (LST), Colombo
do not necessarily reflect the official position of SAWTEE or its member institutions.
civil society advocacy

Recommendations
on food security
South Asian governments must
explore the avenue of regional
cooperation on trade in agriculture
and food products as a means of
achieving food security goals. In this
regard, it is absolutely essential that
export restrictions on food among
Member States be prohibited.
Implementation of trade facilita-
tion measures; reviewing the agricul-
ture and food products on the sensi-
tive lists of Member States under
the Agreement on South Asian Free
Trade Area, and taking measures
to prune the lists, taking into ac-
count rural development, livelihood
OVER the last three years, food secu- Civil society leaders and experts from enhancement and food security goals;
rity has remained high on the agenda the region participated in the Forum. and taking steps towards developing
of the South Asian Association for The Forum came up with a state- and adopting regional sanitary and
Regional Cooperation (SAARC). The ment on food security containing a phytosanitary measures and technical
global food crisis of 2007–2008, which set of recommendations and project standards are some recommendations
caused an alarming rise in food prices ideas for consideration by the SAARC for facilitating intra-regional agricul-
and reduced availability of food in Agriculture Ministers. The Forum was ture and food trade.
the region, thereby adversely affect- a continuation of the first Civil Society Likewise, the institutional
ing food security, prompted SAARC Forum, launched in Kathmandu in mechanism of the SAARC Food Bank
heads of state/government to issue 2008 against the backdrop of the food must be strengthened for its effective
the Colombo Statement on Food Secu- crisis of 2007–2008. Some of the recom- operationalization.
rity in the 15th SAARC Summit, held mendations made by the Forum are Developing regional guidelines
on 2–3 August 2008. In the Statement, discussed below. for the application of intellectual
SAARC leaders affirmed their resolve There is a need to address the chal- property rights and the protection of
to “ensure region-wide food security lenges of changing farming systems farmers’ rights through the sharing
and make South Asia, once again, and agriculture conditions, and take of knowledge and experiences would
the granary of the world”. The 16th measures to capitalize on shifting also contribute to long-term food
SAARC Summit, held on 28–29 April comparative advantage of agricul- security. Effectively materializing the
2010, directed the SAARC Agricul- ture products, taking note of their “SAARC Technology Initiative” as
ture Ministers to vigorously pursue implications for livelihoods of poor, agreed upon during the 10th SAARC
regional cooperation in agriculture vulnerable and marginalized farmers, Summit, and expanding its mandate
covering all sub-sectors to enhance including women. to cover existing and emerging issues
overall agriculture productivity. Adaptive research and breeding in agriculture and climate change are
With a view to providing recom- for variety/breed development should also essential.
mendations to the SAARC Agriculture be strengthened with a particular With SAARC having formally
Ministers, who were scheduled to focus on landraces/local breeds and accepted the idea of a seed bank, the
meet in Dhaka on 3 March 2011, SAW- the rights of local, indigenous and challenge is now to make the SAARC
TEE and Oxfam organized the Second farming communities. There is also an Seed Bank Agreement comprehen-
Civil Society Forum on Responding urgent need to assess the implications sive by creating and strengthening
to Food Insecurity in South Asia on of biofuels and biotechnology for food a regional network of national and
24–25 February 2011 in Kathmandu. security. community seed banks. „

4 Trade Insight Vol.7, No.1, 2011


Address poverty SAARC
Secretary
to achieve food General Saeed
assumes office
security: Research

mymaldives.com
change adaptation, and you must do it
now. Once the most serious effects of
climate change kick in, it will already
be too late to respond effectively,” said THE newly-appointed Secretary
Gerald Nelson, IFPRI senior research General of the South Asian As-
fellow and report co-author. sociation for Regional Coopera-
The severe drought in Russia and tion (SAARC) Fathimath Dhiyana
devastating floods in Pakistan in 2010 Saeed of the Maldives assumed
offer a glimpse of a future negatively office on 3 March. She succeeded
affected by severe weather. Using Dr. Sheel Kanta Sharma of India.
sophisticated modelling, the study A former Attorney General of
assesses the harmful impact of climate the Republic of the Maldives and
change on food security through 2050. former parliamentarian, Saeed is
The study presents 15 different the 10th Secretary General of the
future scenarios based on various SAARC and is the first woman to
combinations of potential income occupy the position.
growth, population growth, and pos- She was serving as the Mal-
sible climate situations that range from divian Government’s Envoy for
slightly to substantially wetter and South Asia just prior to assuming
hotter. her new assignment in Kathman-
The report finds that between now du, according to a press statement
and 2050 staple-food prices could rise
www.rnw.nl

issued by the SAARC Secretariat


by 42–131 percent for maize, 11–78 in Kathmandu.
percent for rice, and 17–67 percent for Saeed holds a Master’s Degree
wheat, depending on the state of the in Law from the Graduate School
world’s climate, economy and popula- of Law and Politics, Osaka Uni-
tion. versity, Japan.
TACKLING poverty remains the Climate change will cause lower The Secretary Generals of
single best way to help poor people rice yields all over the world in 2050, SAARC are appointed by the
in developing countries achieve food compared to a future without climate Council of Ministers upon nomi-
security and adapt to climate change, change. One of the climate change sce- nation by a member state on the
says a report by the International Food narios results in substantial declines in basis of the principle of rotation
Policy Research Institute (IFPRI). maize exports in developed countries, in alphabetical order for a period
When families have more income, but small increases in yields in devel- of three years.
they are better able to cope with oping nations. Wheat yields will fall The 33rd session of SAARC
drought, floods, and other climate in all regions, with the largest losses in Council of Ministers held in
shocks, says the report, Food Security, developing countries. Thimpu, Bhutan, had appointed
Farming, and Climate Change to 2050: The report also finds that improv- her to lead SAARC for the next
Scenarios, Results, Policy Options. ing crop productivity can counteract three years upon nomination by
“Many have made the case that we the negative effects of climate change the Government of the Maldives
have to address climate change to fight on food production, prices and access (Republica, 02.03.11, www.myrepub-
poverty. We are saying you must ad- (Commodity online, 04.12.10, www.com- lica.com). „
dress poverty as a key part of climate modityonline.com). „

Trade Insight Vol.7, No.1, 2011 5


in the news

EU, US downplay expectations


for Durban climate meet
LEADING climate officials from the Change (UNFCCC) in Cancun, Mexi- regard to what the focus of the work
European Union (EU) and the United co in December 2010. They have since in 2011 should be on issues related
States (US) have expressed serious requested that a future climate frame- to Cancun (e.g., level of ambition by
doubts about the feasibility of estab- work should be more in line with the developed countries, agriculture, tech-
lishing a legally binding climate deal Bali Road Map agreed in 2007. nology transfer and its trade implica-
in Durban later this year. By calling The first UNFCCC meeting after tions, and sources of financing). Talks
the possibility “highly unlikely”, EU Cancun, which was held in Bangkok under the two AWGs will reconvene
climate change commissioner Connie in April, served as a reminder of the in early June in Bonn, likely to be fol-
Hedegaard, towards the end of April, political complexities that underlie the lowed by an additional session in late
aligned herself with US climate nego- negotiations. In Bangkok, discussions September or early October, before
tiator Todd Stern who had called such in both the Ad Hoc Working Group the COP17 in Durban at the end of the
a deal “not doable”. on Further Commitments for Annex year.
Emerging and developing coun- I Parties under the Kyoto Protocol Thus, it is expected that the
tries have started to criticize the lack of (AWG-KP) and the Ad Hoc Working focus in Durban will shift to seek-
fast-start funding under the Copenha- Group on Long-Term Cooperative ing agreements on sub-topics. The
gen Accord; however, some progress Action (AWG-LCA) were to focus on EU, for example, intends to push for
was made in late April on establishing how to implement the decisions taken the inclusion of shipping and avia-
a framework for the Green Climate at the COP16 (referred to as the Can- tion in the international negotiations,
Fund. Developing countries have also cun Agreements) in 2011, and resolve because the International Maritime
expressed frustration over what they the outstanding issues that were not Organization has thus far been unable
call the inadequate incorporation of addressed in Cancun. to deliver on taking measures against
equity, intellectual property rights, However, in both AWGs, Parties climate change. The EU also supports
and trade issues in the documents faced difficulties in agreeing on the the linkage of existing regional carbon
adopted at the 16th Conference of the agenda for the negotiating session. markets and the associated emergence
Parties (COP) to the United Nations Generally speaking, this was the result of a global carbon price (Bridges Trade
Framework Convention on Climate of different views of parties with BioRes, 02.05.11). „

Search for
Doha “Plan B”
WITH World Trade Organization B”, reports Bridges Weekly Trade News the chairs of the negotiating groups,
(WTO) Members once again failing Digest. along with a cover note by Lamy,
to meet a key deadline for con- On 21 April, WTO Director-Gen- the documents revealed continued
cluding the long-struggling Doha eral Pascal Lamy released a set of sharp divisions among members.
Round by 2011-end, trade negotia- documents highlighting the state of In his cover note, Lamy bluntly ob-
tors and WTO officials have begun play of the Doha Round. Comprising served that the divisions on non-ag-
to explore options for a Doha “Plan a set of updates and texts provided by riculture (industrial) market access

6 Trade Insight Vol.7, No.1, 2011


Poverty impact
Nepal and the US sign TIFA of food-price rise
high in South Asia
year in Nepal and the US alternatively. A 10 percent increase in domestic
The meetings will focus on issues food prices could increase the
of bilateral trade and investment, percentage of people living below
thereby serving as a forum for bilateral the US$1.25-a-day poverty line in
talks to enhance trade and investment developing Asia by 1.9 percent-
and discuss specific trade issues. The age points, according to a recent
Council will also pave the way for the study Global Food Price Inflation
promotion of more comprehensive and Developing Asia by the Asian
trade agreements between Nepal and Development Bank.
NEPAL signed Trade and Investment the US and work to eliminate trade-re- According to the study, the
Framework Agreement (TIFA) with lated barriers. simulated poverty impact of
the United State (US) on 16 April 2011. Likewise, in Article 3, the US food-price inflation, among South
Visiting Nepali Deputy Prime promises to provide support to Nepal Asian countries, is greatest in
Minister and Finance Minister Bharat to remove trade-related barriers. The India, with rural India expected to
Mohan Adhikari and United States agreement also says the two countries witness an increase in the poverty
Trade Representative (USTR) Ron Kirk will work together with the private rate by 2.9 percentage points and
inked the agreement in Washington. sector and civil society to promote urban India by 2.1 percentage
Kirk termed the new pact a land- bilateral investment. It also has provi- points due to a 10 percent increase
mark agreement, particularly as the sions on protection of intellectual in food prices, ceteris paribus. The
two sides had not signed any trade property rights and expansion of lowest impact is estimated for Sri
agreement since 1947. service trade. Lanka, at 1.2 percentage points.
TIFA has seven articles. Of them, The two sides formalized the The figures for Bangladesh,
Articles 2 and 3 are important, said Dr. NUSTIC soon after the agreement was Pakistan, Nepal and Bhutan are,
Shankar Sharma, Nepal's ambassador signed and convened its first meeting respectively, 2.5, 2.2, 2 and 1.8
to the US. Article 2 of the agreement on the day. Nepali Commerce Secre- percentage points. In absolute
provisions formation of Nepal-US tary Purushottam Ojha and Deputy terms, the aggregate number of
Trade and Investment Council (NUS- USTR Demetrios Marantis led the two South Asian population that will
TIC) led by the Commerce Secretary sides, respectively, in the meeting be thrown into poverty due to a
of Nepal and a senior official of USTR. (Republica, 17.04.11, www.myrepublica. 10 percent increase in food prices
The Council will meet at least once a com). „ is estimated at 37.6 million. „

(NAMA) are “not bridgeable today”. cussing Plan B scenarios. veloped countries (LDCs). It would
Despite other unresolved areas, he Three scenarios are being dis- have WTO Members agree on pro-
expressed the belief that “a deal would cussed. The most longstanding sug- viding duty- and quota-free market
be doable… but for NAMA, where the gestion for a Plan B is to “handpick” access to exports from LDCs, and
differences today are effectively block- some issues from among those under agree on a waiver that would
ing progress and putting into serious consideration in the Doha negotia- authorize them to discriminate in
doubt the conclusion of the Round this tions, and then conclude a stand-alone favour of LDC service providers.
year”. agreement on those, leaving aside A third scenario being dis-
Following the release of the docu- divisive issues like agriculture and cussed is a sort of suspension or
ments, Lamy has started quiet consul- industrial goods. Currently, trade fa- “quiet time” during which the
tations with member delegations to cilitation appears to have widespread Doha Round would be put on the
explore possible options for trying to support, but countries differ on what backburner, with WTO members
salvage something from the wreckage other issues might be taken out of the using the reprieve to address devel-
in case a comprehensive Doha accord Doha Round negotiations for a stand- oping-country concerns about some
proves impossible, so as to limit the alone agreement. of the existing rules, or to turn their
damage of a failed round to the global An alternative Plan B that some attention to newer issues (Bridges
trade body. However, in public, WTO Geneva-based trade diplomats have Weekly Trade News Digest, various
Members have shied away from dis- mentioned would focus on least-de- issues). „

Trade Insight Vol.7, No.1, 2011 7


3rd SAES

Regional Economic
Integration, Climate
Change and Food Security

SOUTH Asia is home to the larg- active collaboration and mutual as- was organized in New Delhi on 11–12
est number of poor people on earth. sistance in the economic, social, techni- December 2009. While the theme
Although poverty in proportionate cal and scientific fields. However, of the 1st Summit was “Economic
terms has been declining in most outcomes in all these fields have been Integration in South Asia: SAFTA and
of the countries of the region, the disappointing. In the 16th SAARC Beyond”, the theme of the 2nd Sum-
absolute number of people living in Summit held in Thimpu, Bhutan in mit was “South Asia in the Context of
poverty has not declined substantially. April 2010, SAARC Leaders them- Global Financial Meltdown”.
The countries of the region are poor selves admitted that SAARC has not
scorers on overall as well as different been able to deliver much in almost all The 3rd Summit
measures of human development. Na- areas of regional cooperation. The 3rd South Asia Economic Summit
tional-level efforts to reduce poverty A number of new and emerging was organized on 17–19 December
and enhance human development in threats are adding to the precarious 2010 in Kathmandu with the theme
South Asian countries have been in conditions of people, mostly the poor “Regional Economic Integration,
place for decades, but without much and vulnerable, living in South Asia. Climate Change and Food Security
success. In a region where countries, to One of such threats is climate change, Agenda for the Decade 2011–2020”.
a significant extent, have a number of which has severe implications for live- The Summit was jointly organized by
shared identities, regional cooperation lihoods, particularly those of the poor. South Asia Watch on Trade, Econom-
will have the potential to contribute ics and Environment (SAWTEE) and
enormously to poverty reduction and South Asia Economic Summits South Asia Centre for Policy Studies
human development in all countries of Some of the prominent civil society (SACEPS) in partnership with the
the region. This realization has its gen- organizations in South Asia have initi- Asian Development Bank (ADB), the
esis in the Asian Relations Conference ated the process of bringing together Commonwealth Secretariat, Oxfam
held in New Delhi in 1947; however, it relevant stakeholders from all the Novib, the United Nations Develop-
was formalized with the establishment countries in the region once every year ment Programme (UNDP) and the
of the South Asian Association for Re- to discuss the problems and challenges United Nations Economic and Social
gional Cooperation (SAARC) in 1985. hindering effective regional coopera- Commission for Asia and the Pacific
Two of the objectives behind the tion and suggest possible solutions. (UNESCAP), and in collaboration with
establishment of SAARC are the ac- Accordingly, the 1st South Asia Centre for Policy Dialogue (CPD),
celeration of economic growth, social Economic Summit was organized in Dhaka, Institute of Policy Studies of
progress and cultural development Colombo on 28–30 August 2008, and Sri Lanka (IPS), Colombo and Re-
in the region; and the promotion of the 2nd South Asia Economic Summit search and Information System for

8 Trade Insight Vol.7, No.1, 2011


Developing Countries (RIS), New engines of growth such as increas- at Customs for goods traded under
Delhi. The Summit covered a wide ing consumption and investment. the Agreement on South Asian Free
range of trade, socio-economic and For that, they should promote Trade Area, and intra-regional tour-
climate change issues that are critical agriculture and rural development, ism, among others.
to enhancing and deepening regional strengthen social protection, facili-
cooperation in South Asia. tate financial inclusion, and exploit • Greater gestures of generosity on
The programme was inaugurated the potential of regional economic the part of the larger, faster grow-
by the then Rt. Hon’ble Prime Minister integration. ing South Asian economies will be
of Nepal Madhav Kumar Nepal, and important in building support for
some of the participating dignitaries • South Asian countries should make and confidence in the integration
included Hon'ble Neomal Perera, Dep- improvements in Track I and Track processes in the region’s smaller
uty Minister of External Affairs, Gov- II interactions based on the model economies.
ernment of Sri Lanka, and Dr. Gowher adopted by the Association of
Rizvi, Adviser to the Prime Minister Southeast Asian Nations (ASEAN). • With most-favoured-nation tariffs
of Bangladesh. Other participants For instance, officials could take coming down, non-tariff barriers
included policy makers, representa- part in Track II dialogues in non- (NTBs) are becoming increasingly
tives of governments, political parties, official capacity or they could be important from the perspective of
business community, international released on sabbatical leave to work advancing trade cooperation among
and intergovernmental organizations, in Track II. It is also essential to SAARC Member States. If regional
development partners, civil society, restructure the SAARC’s organiza- cooperation is to be deepened
academia and media from all member tional structure, its charter and its through vertical integration and
countries of SAARC. Secretariat. promoting cross border supply-
chains, NTBs in South Asia will
Major recommendations • To build confidence, SAARC Mem- need to be addressed adequately
Some of the major recommendations ber States should initially focus on with due importance.
of the 3rd South Asia Economic Sum- soft areas and projects with greater
mit are: visibility and immediate viability • A targeted programme needs to be
such as the South Asian University, designed to facilitate cross-border
• South Asian countries should Citizens Committee on the Social trade through the development
sustain the growth dynamism in the Charter, special airport channels for of border infrastructure, and if
medium term by developing new SAARC citizens, Green Channels required, coordination of infrastruc-

Trade Insight Vol.7, No.1, 2011 9


3rd SAES

ture development at border points. Parliamentarians • In order to protect the rights of


Customs rules and regulations, migrant workers, South Asian
valuations and customs procedures
of SAARC Member countries which have not yet rati-
also need to be harmonized. States should have fied the “International Convention
a regional outlook on the Protection of the Rights of
• South Asian countries should be and think of issues All Migrant Workers and Members
cognizant of the distributional of Their Families” should ratify it
that do not respect
aspects of services trade liberaliza- immediately.
tion under the SAARC Agreement national boundaries.
on Trade in Services (SATIS). They • Improving trade facilitation should
should also be cautious about the be a priority of South Asian coun-
ambitions of what is achievable tries. For that, they should focus on
under SATIS. • Food security should be analysed in port efficiency, customs environ-
a broader context keeping in mind ment, regulatory environment, and
• South Asian countries should the capabilities and entitlements e-business usage. Also, more aid for
liberalize air services by drawing of the people in South Asia. Food trade should be directed towards
lessons from the phased approach security agenda should be over least-developed countries (LDCs)
to such liberalization adopted by and above all other agendas in the and landlocked countries to help
ASEAN and the European Union. region. them put in place proper trade
Short-term measures to boost con- facilitation measures.
nectivity in the region could include • In the context of the vulnerabilities
enabling code sharing with third of South Asian countries to the • The State in LDCs needs to play a
party airlines; liberalizing ground negative effects of climate change, greater developmental role to foster
handling; granting fifth freedom there should be more sharing of economic development that is pro-
rights on certain routes; simplifying knowledge and resources among ductive and transformative.
transit visa processes; increasing them. They should also develop
overall investment in airline-related mechanisms to preserve crops • The international development
infrastructure such as airport capac- which might seem unproductive support mechanism for LDCs needs
ity, safety, etc. today but could have better use to reorient in light of some global
tomorrow. developments such as the dynamic
• Eradication of extreme poverty growth in the South, volatility of
is a sine qua non for food security • On energy cooperation, an over- growth (especially the recession in
in terms of affordability. Poverty riding common law governing the advanced economies) and the
reduction must, therefore, be a high regional energy pool may help allay challenges posed by climate change.
priority in South Asia. the anxiety of smaller countries
related to their ability of negotiating • In order to address the supply-side
• The region also needs a “green with a stronger partner. Regional constraints facing the LDCs in the
monetary policy” so that monetary cooperation could also be useful in region, SAARC Member States
policy can help address concerns addressing issues such as dearth of should establish an “LDC Integra-
about climate change. human resources to tap the region’s tion Fund” or an “LDC Develop-
hydropower potential. ment Fund” with an annual indica-
• Operationalizing the SAARC Food tive portfolio of US$1.1billion.
Bank and establishing a regional • While emphasizing regional energy
seed bank are essential to ensure cooperation in South Asia, one has • Parliamentarians of SAARC Mem-
food security in South Asia. South to be mindful of some of the associ- ber States should have a regional
Asian countries should also increase ated risks and problems as well. outlook and think of issues that do
investment in agriculture. For example, cost-benefit analysis not respect national boundaries.
of water resources projects in Nepal There is also a need to involve the
• Regarding the food bank, alterna- has involved overvaluation of youth in the regional integration
tively, South Asia might also think hydropower and undervaluation of process.
of creating a regional fund for food, everything else. Financial and eco-
which is akin to the ASEAN model. nomic calculations of the poverty- • Bilateral issues of conflict among
There should be a standby line of alleviating benefits surrounding South Asian countries should be
credit for food imports to ward the construction of export-related discussed independent of the wider
off speculative pressure in smaller projects should be weighed against regional collaboration process so as
countries when in crisis. their true social costs. not to poison it. „

10 Trade Insight Vol.7, No.1, 2011


interview

International
trade crucial for
food security
Harsha Vardhana Singh
Deputy Director-General, WTO

What is the current status of the Doha on. Modalities for least-developed In terms of agriculture liberalization,
Round? Is it going to be concluded? In countries (LDCs) are very close to be you mentioned about the tariff rate
particular, what is going to happen in finalized, which will provide them quota, special products and SSMs.
terms of agriculture liberalization? preferential market access in areas that What about export subsidy and other
are indicated under the modalities. kinds of subsidies?
After the meeting of the G20 and the However, the conclusion of the Doha
Asia-Pacific Economic Cooperation Round will depend on the nature of Phasing out of export subsidies has
(APEC) leaders last year, new energy the interactions that take place now. been agreed and included in the
has been infused at the instructions of Regarding agriculture liberal- text. It includes substantially reduc-
the leaders for the early conclusion of ization, much of what is going to ing overall trade-distorting support,
the Doha Round. The negotiating texts happen is already there, for example, maintaining discipline in the blue box,
prepared by the chairs will provide the formula on bound tariff, condi- and having product-specific caps on
an overall perspective of all the areas tions that are relevant for tariff rate assistance to be provided. Similarly,
under negotiation. quotas, flexibilities available to net it has also been agreed that export
Because these texts will be pro- food-importing developing countries subsidies will be phased out and there
duced on the basis of what the (NFIDCs) and LDCs, etc. What is not will be disciplines on those policies
members discuss and suggest to the clear yet is the structure of the special that are seen as substitutes for export
chairs, a number of issues will be safeguard mechanism (SSM), and subsidies.
further clarified in the preparations of which products will be scheduled as Food aid will continue, but discus-
these texts. So, the number of issues special products. sions are progressing to ensure that
that have to be dealt with will hope- On the latter, some discussions such aid will not result in a back-door
fully be far less than today’s. That will have already been held and there has entry of export subsidies. Mem-
form the basis of further interactions been some clarity. In the case of SSMs, bers have also agreed to have more
and we can hope that the modalities some bilateral meetings that have been disciplines on export restrictions and
in agriculture and non agricultural held recently on the issue have been provide flexibilities to commodity-ex-
market access (NAMA) will be on the useful. There are concerns that some porting countries. In terms of market
table soon. In the case of services also, countries want more products in the access, a very important development
we expect to have the final offer by the list of sensitive products, but broadly, is that there has been a broad agree-
same time. disciplines are there. ment to substantially reduce tariffs on
Plurilateral negotiations have There are other issues also, but in tropical products.
progressed a lot, and the members general, most of the issues in agricul-
have agreed to have a consolidated ture, if seen in detail, are rather clear. Regarding the overall liberalization
text based on members’ positions If further market access is provided, of agriculture, there are concerns that
on domestic regulations and other it will take the market liberalization reduction of subsidies would result in
areas in which discussions are going momentum forward. higher prices of agriculture and food

Trade Insight Vol.7, No.1, 2011 11


interview

products and would hurt NFIDCs conditions, reduction in agriculture framework for action, which has been
and LDCs. How would you assess subsidies will not have a major impact revised recently with active participa-
the impact of the reduction in agricul- on NFIDCs and LDCs. tion of major stakeholders. It has tried
ture subsidies as a result of the Doha For NFIDCs, the answer to their to balance the export restrictions issue
Round? food requirements is international because countries which are restrict-
trade. They should have proper trade ing exports are doing so to meet the
Prices of agriculture and food prod- facilitation system and distribution demand of their domestic consumers;
ucts are high even now and the system in place and should have but on the other hand, such action of
ceilings that we have today are not in easy access to markets and supplies. theirs is affecting the international
operation. Therefore, those who argue International trade is also crucial for market. Therefore, the comprehensive
that prices will rise due to reduction the timely and efficient provision of framework for action has suggested
in subsidies are functioning within an inputs such as seeds and fertilizers. putting in place alternative policies
analytical model where the applied Also, since LDCs do not have to that can be followed. One of the areas
subsidy level is at the bound subsidy undertake any additional obligations, where some clearer understanding is
level. Food prices are likely to be high their defensive interests are fully ad- appearing is that food aid should not
for various other reasons such as dressed. In terms of market access, re- be halted because of these restrictions,
the shift of some of the food crops to ducing tariffs and bringing down tariff which has occurred in some instances
biofuels, rise in oil prices, change in rate quotas and tariff escalation will during the recent food crisis.
dietary preferences, and so on. make it much easier for LDCs to sell Providing food on time by keeping
Reductions in subsidies, rather, their value added products. The pos- adequate buffer stocks is important.
will provide incentives to efficient sibility of utilizing LDCs’ strengths in And with adequate buffer stock avail-
producers in the world, wherever areas that are covered by even greater able, the impact of a production failure
they are, to compete and supply their liberalization and with prospects to on prices will not be the same. In that
products in the world agriculture tap markets in a larger way provides context, if a more level playing field
market without the disability of being LDCs with opportunities to attract could be created so that efficient pro-
outcompeted. And these are likely to greater foreign direct investment. ducers could enhance their production
be producers in countries that are not and increase overall supply of agricul-
providing enough subsidies today. Article XI of the General Agreement ture and food products, buffer stocks
Agriculture production will have on Tariffs and Trade (GATT) 1994 al- could be kept in adequate amount on
to increase to feed the rising world lows countries to set temporary export the one hand, and on the other, mar-
population. However, the demand restrictions in case of critical shortages kets would get deeper. Additionally,
for food, in terms of the increase in of food stuffs and industrial raw ma- there must be opening up of markets
population, might not be hugely dif- terials. This is vague in that “critical together with increase in investments
ferent. Therefore, focus should be on shortage” and “temporary” have not to enhance productivity.
increasing agriculture production. In been defined. Is the WTO agree-
the last few years, about 70 percent ment itself providing a carte blanche Finally, as the issue of transit is being
of the increase in agriculture pro- to countries that want to set export discussed under Article V of GATT,
duction in developing countries has restrictions, which will aggravate the can there be a proposal to provide
been the result of the increase in their situation of food insecurity? separate treatment to food items in
agriculture productivity. And there transit, for example, clearing food
are estimates that the productivity of WTO does not provide carte blanche. items through a fast track process?
a large number of small farmers in There are disciplines on export restric-
developing countries can be doubled tions that are being worked upon It is a very good idea, but this has
or trebled just by coordinating and ap- further and there is a proposal from to be seen in two different ways for
plying some investment policies and Switzerland and Japan to take the perishables and non-perishables.
strategies. Therefore, under current disciplines even further. The main There may be a case to argue about
issue is what a country should do perishables. Actually, ideally, such
when there is an internal scarcity. I a mechanism should be possible for
About 70 percent of think we need to manage this in a all kinds of products; but if there is a
the increase in agri- cooperative manner through poli- need to limit it to food products for
culture production in cies that are now being discussed at some special reason, I see no reason
developing countries various international forums. The why not to put forward the proposal.„
UN has also formed a high-level task This interview was taken by the Editor-in-
has been due to in- force on food security chaired by the Chief and the Associate Editor of Trade Insight
crease in their agri- UN Secretary General himself. They on 16 February 2011 during Dr. Singh’s visit
culture productivity. have come out with a comprehensive to Nepal.

12 Trade Insight Vol.7, No.1, 2011


Climate Change
Negotiations and South Asia

An outline of The success of cli-


mate change nego-
tiations does not de-

a constructive pend on developed


countries alone.
Emerging economies

mosaic also have a signifi-


cant role to play.

Bipul Chatterjee and Shruti Mittal

I n the early 1970s, scientists ob-


served persistent climatic extremes
and commenced their study of such
patterns on a global scale. A focus of
their study was to ascertain whether
those changes were being caused by
human activities. The World Meteo-
rological Organization (WMO) also
set up a panel to study the subject and
sounded an alarm by issuing a state-
ment that the proportion of carbon
dioxide in the atmosphere was higher
than before. A group of meteorologists
stressed that the burning of oil and
coal was one of the major causes of
such an imbalance, which would lead
to the warming of the earth’s atmo-
sphere over the long term.
Consequently, the WMO, in asso-
ciation with the United Nations (UN)
and other international institutions,
organized the world’s first climate
change conference in Geneva in 1979.
The conference led to the establish-
ment of the World Climate Pro-
gramme and eventually the Intergov-
ernmental Panel on Climate Change
(IPCC) in 1988. The IPCC, since then,
has been playing an instrumental role
in assessing climate change and sug-
gesting policy options to the govern-
ments. It published its first assessment
report on climate change in 1990 and

Trade Insight Vol.7, No.1, 2011 13


UNLDC IV
climate change

three subsequent ones in 1995, 2001 targets for emissions reduction by BASIC group—consisting of Bra-
and 2007, all of which claimed that industrialized countries and followed zil, South Africa, India and China.
global temperature has been rising the principle of “common but differen- They agreed to undertake voluntary
consistently at a more than natural tiated responsibilities”. It also provid- measures to reduce their emissions
pace and that there is an immediate ed flexibilities to the nations ratifying and also agreed to be accountable to
need to halt greenhouse gas emissions. the Protocol by allowing them to trade domestic legislation to achieve their
A series of regional and interna- in emissions, establish carbon sinks emissions reduction targets. Thus, the
tional conferences were also organized and invest in other countries to assist COP15 prepared the ground for the
with the aim to reach consensus them in adapting to climate change. COP16 (Cancun, Mexico, December
among nations on reducing the level The Protocol came into effect in 2005, 2010) where countries were expected
of emissions, protecting the ozone but its effectiveness was limited due to declare concrete emissions reduc-
layer and addressing climate change. to its non-ratification by the United tion targets.
In 1985, an international conference on States (US), which perceived that
ozone layer depletion held in Vienna ratifying the Protocol would hurt its Cancun and South Asia
produced the Montreal Protocol. The growth prospects, particularly in the COP16 was much awaited because of
Protocol, which entered into force absence of emissions reduction norms the hope that it would come up with
in 1989, was designed to protect the for developing countries. a functional architecture for a climate
ozone layer by phasing out the pro- In 2007, the Bali Action Plan was change deal. It was expected to follow
duction and use of harmful substances launched with a view to bridging the a balanced approach, thereby encour-
such as chlorofluorocarbons and gap between the positions of various aging both developed and developing
hydrochlorofluorocarbons. countries and accelerating efforts to countries to make efforts in combating
With the aim of broadening the combat climate change. The major fo- climate change.
scope of international efforts, in 1992, cus of the Action Plan was to reach an However, negotiations in Cancun
the UN organized a major conference, agreed decision at the 15th Conference could not achieve a legally binding
popularly known as the Earth Summit, of the Parties (COP15) to the UNFCCC treaty for emissions reduction, but it
in Rio de Janeiro. The United Nations in Copenhagen in December 2009. succeeded in finding consensus in a
Framework Convention on Climate Despite widespread public number of areas requiring voluntary
Change (UNFCCC) was born out of demonstrations, preparatory efforts actions. Unlike the closed-door meet-
this Summit. It had far-reaching objec- by international organizations and ings that took place in Copenhagen,
tives and was ratified by 154 nations, participation by more than 35,000 the meetings in Cancun were kept
but it was not legally binding and registered members, the COP15 could transparent and they focused on vari-
contained no enforcement mechanism. produce only an accord, which could ous areas of agreements rather than a
Consequently, as an addition to the not state concrete figures for emissions full treaty, which might have been too
UNFCCC, the Kyoto Protocol was reduction. However, the approach ambitious at that time.
adopted in 1997 and it became one of taken by country representatives was To some extent, the COP16 can be
the most significant agreements in the more amiable, and it also witnessed seen as a breakthrough because many
history of climate change negotiations. the institutionalization of a group of developed countries agreed to increase
The Kyoto Protocol set binding emerging developing nations—the their emissions reduction targets. They

Table
Emissions and mitigation commitments of major polluters
Countries US China India EU Japan Brazil

Global share in emissions 16 17 4 12 3 7


(%)
Global share of historical 29.3 8 2 27 4 1
responsibility (%)
Emission reduction 17% 40–45% 20–25% 20% 25% 36–39%
commitments reduction reduction of emission reduction of emission reduction reduction reduction
intensity per unit GDP intensity per unit GDP

Baseline 2005 2005 2005 1990 1990 Projected


2020
emissions
Adapted from The Cancún-o-Gram - The Cancun Conference, 29 November 2010, Institute of International and European Affairs.

14 Trade Insight Vol.7, No.1, 2011


have largely agreed on the aim to keep adaptation and mitigation practices of
the expected rise in average global individual countries should be taken
temperature below 2 degrees Celsius. into consideration. The countries can
They have also agreed that mitiga- An inclusive pro- also set regionally acceptable stan-
tion measures taken by the developed cess should be dards for monitoring, and introduce a
countries will be subject to interna- followed in the unified monitoring system. They can
tional assessment and review. It is then measure their progress based on
utilization of the
expected that such assessment and stated parameters. By taking such an
review would push developed coun- Green Climate approach, while progress made by
tries to undertake timely mitigation Fund. each country can be compared with
measures, and it would also establish that of the others in the region on the
a better system of accountability. one hand, the region’s progress as a
The Cancun decisions will have group can be presented at internation-
strong a bearing also on developing al forums on the other.
countries, including those in South Future negotiations: Role of Furthermore, South Asian coun-
Asia. For example, it has been agreed South Asia tries should create a “Climate Corpus
that a Green Climate Fund will be cre- Climate change negotiations have Fund” which can be utilized for local
ated, which will be funded by devel- made slow but steady progress over initiatives towards adaptation and
oped countries and managed under the years. Although hesitant previous- mitigation. South Asian countries
the auspices of the UN. US$30 billion ly, countries such as the US and those should also join hands to develop
has been earmarked for this fund for of the European Union have acknowl- facilities for research and development
the period 2010–2012 with the agree- edged their responsibility to address of technologies (including multiple-
ment that it will be raised to US$100 the problems associated with climate use technologies) in order to reduce
billion by 2020. The responsibility of change. Accordingly, financial as- their dependence on the western
utilizing this fund lies with develop- sistance and technology transfer from world. Such an initiative will also help
ing countries. Incapacity to access the North to the South is expected to in making available locally adaptable
and make proper use of the fund will increase in due course, which will help indigenous technologies, which are
not help developing countries fight developing countries in taking proper much more cost effective in terms of
climate change. adaptation measures in key areas such their development and use, and in bet-
Therefore, to ensure that the as agriculture, and in the development ter utilizing available human resources
utilization of the fund creates a lasting of less energy-intensive industrial and in the region. It could also create some
positive impact, an inclusive process service sectors. scope to transfer such technologies to
should be followed. Lessons should be However, it must be realized that other parts of the developing world,
learnt from the implementation of the the success of climate change nego- particularly Africa, which shares some
Global Environmental Facility, which tiations does not depend squarely features with South Asia.
was a result of the Rio Convention on on developed countries. Developing Cohesive regional efforts by
Biological Diversity held in 1992 and countries, and especially the emerging South Asian countries will provide
which got momentum after the adop- economies, also have a significant role them higher negotiating power and
tion of the Kyoto Protocol so that there to play. They have a critical respon- a unique identity in future global
is better governance and account- sibility to ensure that the milestones negotiations on climate change, which
ability in the utilization of the Green are achieved. In their pursuit of higher could have positive spill-over effects
Climate Fund. levels of economic growth, they must in other negotiating forums. It could
Under the Cancun Adaptation factor in environmental sustainability. also result in the concerns of smaller
Framework, developing countries, es- They should accept that integrating countries such as Bangladesh, Bhutan,
pecially the emerging economies, have economic growth with environmen- the Maldives and Nepal, which are ex-
also agreed to state their emissions tal sustainability through innovative tremely vulnerable to climate change,
reduction plans. Hence, their actions methods is the right approach for the getting more attention at international
related to climate change, henceforth, future. The financial and technical forums. An economically more pro-
will be open to international consulta- resources required to undertake such gressive country like India must take
tion and analyses. Although a group initiatives can be accessed from the a leadership role in taking such an
of developing countries has already climate fund(s) which are created at initiative in the region. „
taken steps to allow the international regional and international levels. Mr. Chatterjee is Executive Director,
scrutiny of the implementation of its South Asia, as a region, should CUTS International, Jaipur and Ms.
individual adaptation plans, others formulate a joint action plan to tackle Mittal is Research Assistant, CUTS Centre
need to prepare themselves for such the problems associated with climate for International Trade, Economics &
an action. change. While doing so, successful Environment, Jaipur.

Trade Insight Vol.7, No.1, 2011 15


food security

SAARC Food Bank and Some of the


operational
modalities of

Food Security the Food Bank


need to be
changed for it
to help Bangla-

in Bangladesh desh fight food


insecurity.

Selim Raihan

O n 12 August 1988, member


countries of the South Asian
Association for Regional Cooperation
leaders went a step further and agreed
to establish the SAARC Food Bank, an
agreement on which was finalized and
different member countries. Recently,
Members have decided to increase the
reserve to 486,000 MT with India, Pak-
(SAARC) agreed to set up a SAARC signed at the 14th SAARC Summit in istan, Bangladesh, Nepal, Sri Lanka,
food security reserve. But due to a April 2007. Afghanistan, Bhutan and the Maldives
number of operational and procedural Initially, it was decided to set contributing 306,400 MT, 80,000 MT,
problems, the reserve could not be aside 241,580 metric tons (MT) of 80,000 MT, 8,000 MT, 8,000 MT, 2,840
functional. At the 12th SAARC Sum- food grains as reserve in the SAARC MT, 360 MT and 400 MT respectively.
mit held in Islamabad in 2004, SAARC Food Bank with different shares for Members are also exploring the pos-

16 Trade Insight Vol.7, No.1, 2011


sibility of increasing the reserve to 1 stan and Russia on wheat have further period 1999–2008, on average, India
million MT in the future. aggravated the food insecurity situa- accounted for 71 percent of rice pro-
The objectives of the SAARC Food tion in Bangladesh. Since Bangladesh duction and 76 percent of wheat pro-
Bank are “to act as a regional food se- is a net food-importing country, such duction in South Asia. However, India
curity reserve for the SAARC member export bans have contributed to the has undertaken to earmark only about
countries during normal time food skyrocketing of rice and wheat prices. 63 percent of the total reserve require-
shortages and emergencies; and to The rise in the prices of agri- ment. Therefore, India should increase
provide regional support to national culture inputs and fuel, and lack of its quota of food grain deposits in the
food security efforts, foster inter-coun- adequate infrastructure facilities and SAARC Food Bank.
try partnerships and regional integra- energy have led to a rise in the cost Similarly, during 1999–2000, on
tion, and solve regional food shortages of production of food items, which in average, Pakistan and Bangladesh
through collective action”. The agree- turn has escalated food prices in recent accounted for about 21 percent and
ment contains different provisions on times. In Bangladesh, although there 20 percent of South Asia’s total wheat
the quality of food grains, procedures has been improvement in agriculture production respectively. However, in
for withdrawal of food grains by each productivity and overall agriculture the case of Bangladesh, production
country from its own stock of reserve, production over the last decade, mas- has fluctuated. Moreover, Bangladesh
refilling of the reserve, price determi- sive population growth has made per does not have enough production sur-
nation, and functional and operational capita food availability far short of the pluses as that of Pakistan and India.
measures. The Food Bank, however, required level. Population growth has Therefore, Bangladesh and Pakistan
has not yet been operational. Produc- also resulted in the reduction of arable having the same quota to deposit
tion shortages and unavailability land since more land is now used for food grains in the Food Bank is also
of food grains in recent years have accommodation purposes. In such inequitable. Hence, Bangladesh should
increased the importance of operation- circumstances, an effective operation- negotiate for reducing its contribution
alizing the Food Bank for all SAARC alization of the SAARC Food Bank to the reserve and ask India and Paki-
member countries. could act as a cushion. stan to increase their share. Another
concern for Bangladesh is that even
Importance for Bangladesh Issues to consider if its share will be reduced, being an
Bangladesh often faces natural calami- Despite the positive attributes of the import-dependent country, it might
ties at least once a year. Devastating SAARC Food Bank and its possible not be able to maintain its specified
floods or excessive rains severely dam- contribution to fighting food insecu- contribution to the Food Bank. A pos-
age seasonal crops like Boro and Amon rity, there are some issues that require sible way out on this issue could be
and also other staples such as rice. special consideration. The first and making a proposal that if annual food
Consequently, their shortages induce foremost is regarding individual production fell persistently over three
food price increases, thereby affecting members’ share of food grains to be to five years, there would be a quick
mainly the poor people who spend deposited in the reserve, which is not release of food stocks.
almost 70 percent of their income on equitable. Although India’s share of Persistent rise in food prices has
food. Unexpected natural calamities depositing food grains in the Food both short- and long-term impacts.
also cause damage to the national Bank is the highest among all the While the short-term effects are main-
food security reserves and undermine member countries, it is not proportion- ly food insecurity and hunger among
the government’s efforts to keep an ate to its share in regional agriculture the poor, the long-term effect is the
adequate quantity of food reserve at production. For example, during the low quality of human capital due to
the national level. Bangladesh can seek malnutrition and deteriorated health
immediate support from the SAARC status of children. In Bangladesh, sev-
Food Bank during such times. eral policy measures have been taken
The recent upward trend of infla- over the past few years to deal with
tion level in Bangladesh is primarily India and Pakistan the problems of production shortages
the result of rising prices of basic food should increase and rising food prices. However, as
items. According to Bangladesh Bank, experiences have shown, Bangladesh
their contributions
the central bank of the country, the cannot solve these problems alone.
monthly average overall inflation was to the SAARC It needs continuous support from its
8.13 percent in December 2010, where- Food Bank . neighbours and the rest of the world.
as the food price inflation was 10.12 Therefore, effectively operationalizing
percent. This has reduced the purchas- the SAARC Food Bank is in Bangla-
ing power of poor people. Export bans desh’s interest. „
imposed by India and Vietnam on rice Dr. Raihan is Associate Professor,
and by Argentina, Kazakhstan, Paki- Department of Economics, University of Dhaka.

Trade Insight Vol.7, No.1, 2011 17


food security

Food Distribution System


in Nepal in the Context of
SAARC Food Bank
Krishna Prasad Pant

P ublic food distribution system


(PDS) serves several purposes
related to food security. First, it helps
obtained from the Bank is properly
distributed at the national level. The
SAARC Food Bank has not yet been
the capacity of member countries to
efficiently distribute food when and
where required at the national level.
food products flow from surplus coun- operational mainly due to the strin-
tries to deficit ones. Second, it plays gent rules to access food, and partly PDS in Nepal
an important role in distributing food due to limitations of PDS in member Nepal has a parastatal organization
within the country, mainly to those ar- countries. named Nepal Food Corporation (NFC)
eas that face food shortages. Third, by The food earmarked as reserve that manages PDS in the country. It
purchasing food during the harvest- in the SAARC Food Bank is located provides subsidized food to people
ing season and releasing it during the in respective member countries in living in 27 remote districts. It also
lean season, it makes food available in varying proportions. To access food sells food in the cities at competitive
all seasons. Fourth, by releasing more from the reserve of any other member, prices.
food during emergencies, it discour- the needy member should declare an Different places in Nepal have
ages rent-seeking behaviour of traders. emergency food deficit in its coun- diverse topographies and climate.
Finally, it contributes to stabilizing try and demonstrate its inability to Therefore, food production is not the
food prices by helping producers get a purchase food from the international same throughout the country. For
reasonable price during harvests and market. Thereafter, the deficit country example, cereals, particularly rice, the
consumers get food at a reasonable should formally request the reserve- most important staple crop, are grown
price during the lean season. holding country to allow it to have mostly in the southern plains and
access to the latter’s food reserve, river basins where the climate is warm
SAARC Food Bank and PDS negotiate the price and make arrange- and irrigation facilities are better than
Member countries of the South Asian ments to import the food. Hence, the in the northern hills and mountains.
Association for Regional Cooperation process to get access to food from the Consequently, while some areas in the
(SAARC) have agreed to establish the SAARC Food Bank is cumbersome. country are food surplus, others are
SAARC Food Bank that would act as Member countries can negotiate food deficit, some persistently. In the
a regional food security reserve and among themselves to simplify these mountains, particularly in the western
provide regional support to national rules, however. Therefore, they should region of the country, food insecurity
food security efforts. An effective PDS pay more attention to addressing the is a chronic problem. NFC’s role in
is necessary to benefit from the Food limitations of their PDS. Enhancing national-level food distribution has
Bank since it is essential that food the efficiency of PDS can increase been particularly helpful for the poor

18 Trade Insight Vol.7, No.1, 2011


people living in such areas where the
Table
market is also unsuccessful in sup-
plying food, mainly during times of
Production, export and import of major cereals (in tons) (2008/09)
acute shortages. NFC’s role has also Major cereals Production Export Import Food availability
been important during times of disas- Rice 2,461,203 2,019 (0.08) 98,988 (4.02) 2,558,172
ters such as disease outbreak, flood, Wheat 1,069,167 47,858 (1.94) 1,157 (0.05) 1,022,466
drought and earthquake. Maize 1,383,647 412 (0.02) 32,861 (1.34) 1,416,096
Millet 240,031 0(0.00) 12,376 (0.50) 252,407
Cereal production, Barley 6,358 0(0.00) 5(0.00) 6,363
trade and NFC Total 5,160,406 50,289 (0.97) 145,387 (2.82) 5,255,504
Nepal produces most of the major ce- Figures in parentheses are percentage of production.
reals, of which rice is produced in the Source: Author’s calculation based on MOAC. 2009. Statistical Information on Nepalese Agriculture.
highest quantity. In 2008/09, cereals Kathmandu:Ministry of Agriculture and Cooperatives, Government of Nepal.

produced included rice, wheat, maize,


millet and barley (Figure).
Trade plays a limited role in the to supply food at competitive prices is Way forward
supply of cereals in Nepal. Export of one of the long-term solutions to fight NFC has a long history of distributing
major cereals is less than 1 percent of food insecurity, trade has contributed staple food, mainly rice, at subsi-
their total domestic production, but very little in making food available dized prices. It collects food through
their import is three times higher than in remote areas of Nepal because of domestic procurements at pre-an-
their exports (Table 1). However, im- poorly developed markets in those nounced prices and resorts to imports
ports are still less than 3 percent of the areas. NFC should be playing a larger to a limited extent. The procurement
total domestic production. The total role in that context. But due to some and distribution system involves a
availability of cereals in 2008/09 was weaknesses in NFC, its role in instru- large amount of subsidy and food
5.25 million tons. mentalizing trade for food security has handling costs, storage losses and
Although promoting the market been limited. huge incidental costs because of which
it has not been able to reach all the
targeted beneficiaries. There are also
some problems inherent in NFC. For
Figure example, in order to monitor the food
Composition of cereal production insecurity situation in rural areas, the
government, with the assistance of the
World Food Programme, has initi-
ated a Food Security Monitoring and
Analysis System that collects real-time
data on household food security, crop
production and food prices. But NFC
does not have the mechanism and
the ability to immediately respond to
acute food shortages so as to make the
best use of such a sophisticated moni-
toring system.
Therefore, while effective op-
erationalization of the SAARC Food
Bank could ensure the availability of
adequate food grains during times
of acute food shortages, efficiency
of NFC will determine whether the
food reaches the targeted population.
For that, along with strengthening
NFC, the private sector should also
be encouraged to participate in the
process. „
Dr. Pant is Senior Economist, Ministry of
Source: Author’s calculation based on MOAC. 2009. Statistical Information on Nepalese Agriculture.
Agriculture and Cooperatives, Government of
Kathmandu:Ministry of Agriculture and Cooperatives, Government of Nepal. Nepal.

Trade Insight Vol.7, No.1, 2011 19


cover feature

Intra-regional food and agriculture trade has the poten-


tial to help address food insecurity in South Asia. However,
removal of trade barriers, both on the import and export
fronts, accompanied by measures to increase agriculture
productivity and production, is essential.

Chandan Sapkota

20 Trade Insight Vol.7, No.1, 2011


F ood insecurity is a major national
as well as regional issue in South
Asia. Most of the countries in the
Table 1
Agriculture exports and imports within South Asia5
region are reeling under high food Intra-regional exports (% share of region's exports to the world)
prices, which are pushing up overall Commodity group 2005 2006 2007 2008 2009
inflation, and deficit food production. Animal & animal products 3.78 4.25 3.98 4.32 4.73
Food-price inflation is having a nega-
Vegetable products 17.52 14.87 16.04 15.95 13.92
tive impact on poverty reduction,1
progress in achieving the Millennium Food stuff 14.95 26.41 17.33 16.46 17.20
Development Goals (MDGs), and Intra-regional imports (% share of region's imports from the world)
overall macroeconomic balance. Given
Commodity group 2005 2006 2007 2008 2009
this mounting problem closely linked
to the livelihood and survival of mil- Animal & animal products 20.83 19.68 16.77 21.22 22.18
lions of people in the region that has Vegetable products 11.67 10.98 10.82 7.86 6.67
the largest number of poor people in
Food stuff 11.30 33.64 35.73 37.29 15.61
the world, ensuring food security is a
Source: Author’s computation using UN Comtrade database.
pressing concern.
Solving the problem of food
insecurity has become even more
imperative in South Asia because the Agriculture trade Afghanistan trades mostly with Paki-
region’s total population is expected Intra-regional trade in South Asia is stan, Bhutan and Nepal trade mostly
to be 2.3 billion in 2050 (up from 1.6 low when compared to other re- with India. The low share of intra-
billion in 2011), but the area would gional blocs such as the Association regional agriculture trade for other
remain the same (4.8 million sq.km).2 of Southeast Asian Nations (ASEAN) countries suggests that either there is
This is equivalent to about one–fourth and the European Union. South Asia’s low complementarity in agriculture
of the total projected world population intra-regional merchandise exports trade within the region or the market
in 2050. Furthermore, by 2050, South (imports) were about 5.6 percent (2.5 structure with regard to price, quality
Asia will have the highest population percent) of its total world merchandise and volume is unattractive.
density (486.8 persons per sq. km) of exports (imports) in 2009. However, Overall, India and Sri Lanka have
all the regions in the world. Increasing the share of intra-regional trade in trade surplus in agriculture goods.
agriculture productivity and smooth- agriculture goods is higher. In 2009, Bhutan had surplus in 2008, but a
ening supply within and across bor- agriculture exports within South Asia deficit of about US$5 million the fol-
ders are vital to ensuring food security were around 12.8 percent of the re- lowing year. While agriculture trade
for such a large population. gion’s total world agriculture exports.4 deficit of Afghanistan, Bangladesh,
While there are many factors that Specifically, intra-regional exports of the Maldives and Nepal is increasing,
are causing food prices to rise at the food stuffs—that is, meat products, Pakistan saw a decrease in deficit in
national, regional and global levels, sugar, cocoa, cereal products, vegeta-
one of the ways to mitigate the im- ble products, beverages, and residual
pact—with regard to access, availabil- and waste from food industries—were Table 2
ity and price volatility—is to facilitate 17.2 percent of South Asia’s total food Intra-regional agriculture trade
agriculture trade by removing trade stuff exports to the world. Likewise,
(% share of world trade), 2009
restrictions and by enhancing coop- South Asia’s intra-regional agriculture
eration on smoothening the flow of imports accounted for 8.5 percent of Country Export Import
agriculture goods from surplus to food its total global agriculture imports. Afghanistan 66.78 14.04
deficit nations. It should, however, be Notably, intra-regional imports of Bangladesh* 4.35 19.46
realized that achieving food security is animal and animal products made up
a multidimensional task that involves Bhutan 94.03 97.49
22.2 percent of the region’s total world
international trade as well as, inter alia, imports of such products (Table 1). India 9.83 3.92
new technology and input availability, As a share of the country’s total Maldives** 9.67 36.27
environmentally sustainable farming agriculture trade with the world,
Nepal 79.20 37.76
and appropriate supply management Bhutan mostly exports to and imports
practices.3 from South Asia. The figures are also Pakistan 18.71 9.58
This article examines the extent of high for Afghanistan and Nepal. The Sri Lanka 7.99 21.74
agriculture trade, food insecurity and other countries trade less with South
*2007, **2008
agriculture trade restrictions in South Asian neighbours relative to their total
Source: Author’s computation using UN Comtrade
Asia. trade with the world (Table 2). While database.

Trade Insight Vol.7, No.1, 2011 21


cover feature

purchasing power, reduce savings and percent of the population in Bangla-


Table 3
increase vulnerability. It is estimated desh is undernourished. The figures
Total agriculture trade balance that an average person in Bangladesh, (percentage of the population that is
(million US$) Nepal, Pakistan and Sri Lanka spends, undernourished) for India, Nepal,
Country 2008 2009 respectively, 56.05 percent, 57.88 per- Pakistan and Sri Lanka are 22, 16, 23,
Afghanistan -18.01 -30.94 cent, 46.99 percent and 63.55 percent and 21 respectively. Similarly, a large
of his/her total expenditure on food.7 proportion of children under five
Bangladesh* -190.03 -306.00
With total South Asian population years are underweight. It is as high as
Bhutan 16.19 -4.95 projected to reach 1.9 billion in 2025 43.5 percent in India and as low as 21.1
India 1086.60 340.00 and 2.3 billion in 2050, food insecurity percent in Sri Lanka. Ensuring reliable,
will intensify if agriculture production adequate and nutritious food items is
Maldives** -7.01 -8.94
does not keep pace with population essential to address malnutrition in
Nepal*** -15.71 -27.00 growth. the region. Hunger and undernour-
Pakistan -113.88 -54.85 Food insecurity and price instabil- ishment have long-term economic
ity affect hunger and malnutrition. implications as they reduce people’s
Sri Lanka 19.13 41.43
Though the state of hunger in South capacity to work efficiently and fight
*Figures for Bangladesh correspond to 2006 and Asia has improved when compared against diseases by undermining the
2007,** Maldives 2007 and 2008, ***Nepal 2003
instead of 2008.
to the level in 1990, it is still high. immune system.
According to Global Hunger Index
Source: Author’s computation using UN Comtrade
database (Chapters 1–23 considered as agriculture 2010,8 the hunger situation in Bangla- Regional cooperation
goods). desh and India has improved from Realizing the urgency to address food
“extremely alarming” to “alarming”, insecurity through regional coopera-
2009 when compared to the previous and in Pakistan and Sri Lanka from tion after the food crisis of 2007–2008,
year (Table 3). “alarming” to “serious”. The state of South Asian leaders, during the 15th
hunger in Nepal, however, has re- Summit of the South Asian Associa-
Food security mained the same: “alarming”. Overall, tion of Regional Cooperation (SAARC)
Food prices have been surging in all hunger in South Asia is “alarming” held in Colombo, agreed to expedite
South Asian countries since 2007, and worse than in Sub-Saharan Africa. the operationlization of the SAARC
not only impacting macroeconomic Undernourishment is also a major Food Bank, which is expected to serve
stability, but also pushing millions of concern in the region. Almost 26 as a regional food security reserve
people below the poverty line. Food
prices have been rapidly increasing in
most of the countries following a con- Figure 1
vergence in their growth rate in 2003 Growth rates of food price index in South Asia (%)
(Figure 1). In the recent period, food-
price inflation in Pakistan, followed
by Nepal, is the highest in South
60

Asia. Apart from adversely affecting


poverty reduction efforts in the region,
rising food prices also slow down the
progress being made in achieving the
40

MDGs.
It is estimated that a 10 percentage
increase in food prices will increase PAK
the number of poor people (mil-
20

NPL
lions) living below US$1.25-a-day
by 3.8, 0.01, 22.8, 6.7, 0.6, 3.5, and 0.2 IND
BGD
in Bangladesh, Bhutan, rural India, LKA
urban India, Nepal, Pakistan, and Sri
0

Lanka, respectively.6 The impact of


higher food prices is severe because
AFG
South Asian people, on average, spend
-20

more than half of their income on food


consumption. Higher prices/price 1990 1995 2000 2005 2010
instability without a corresponding
increase in income or wages erode Source: ADB. 2010. Key Indicators for Asia and the Pacific 2010. Manila: Asian Development Bank.

22 Trade Insight Vol.7, No.1, 2011


for SAARC member countries during Figure 2
normal food shortages and emergen- Total food production in South Asia (million MT)
cies. The Food Bank’s reserve of food
grains has been raised from 241,580
metric tons (MT) to 486,000 MT.

800
PAK

100
But the SAARC Food Bank is yet to IND
BGD
become fully functional. If properly
designed and implemented, it could

80
help relieve pressure on some coun-

AFG, BGD, BTN, MDV, NPL, PAK, LKA


tries facing urgent food shortages.

600
Increased agriculture productivity

60
and production is crucial to having
enough stock for trade in the region.

IND
Agriculture production has been con-
40

sistently increasing in all countries but

400
arable land has remained the same. NPL
This means that productivity has
20

AFG
risen, and needs to rise further to feed
an increasing population. For instance, LKA

the Maldives has one of the highest

200
MDV
0

cereal yields but the lowest arable land 1960 1970 1990 2000 2010
1980
in South Asia (Table 4). Since its popu-
lation is expected to increase by over
13 percent between 2011 and 2050 and * India on right y-axis and others on left y-axis
rising sea level is expected to inundate Source: Author’s computation using FAOSTAT database (Total food production = Sum of total production
large swathes of its land, it will find of cereals, citrus fruit, coarse grain, fibre crops primary, fruit excl melons, jute & jute-like fibers, oilcake
equivalent, oilcrops primary, pulses, roots and tubers, treenuts, and vegetables & melons).
difficult to ensure food security, let
alone generate surplus production for
trade. In such circumstances, exports India produces the lion’s share of restrict exports when there is do-
from countries such as India and Paki- the total South Asian food production. mestic production deficit, following
stan that have a relatively high level In 2009, it produced 748.84 million the same policy even when there
of production and area of arable land of food, three times higher than the is surplus is not a smart move and
become crucial. total production by other South Asian represents a wasted opportunity for
countries combined (Figure 2). alleviating regional food insecurity.
That said, since arable land is ex- It is estimated that restrictions on rice
Table 4
pected to be the same (or decline in the exports explained almost 40 percent
Arable land and cereal yield in worst case scenario), it is imperative to of the increase in global rice price in
South Asia increase agriculture yield by adopting 2007–2008.10
Country Arable Cereal new technologies and novel farming The Food and Agriculture Orga-
land yield techniques, and using improved qual- nization of the United Nations argues
(million (1,000 ity seeds. that agriculture trade liberalization
India is the world’s second biggest acts as a catalyst for change and
hectares), kg per
producer of wheat, sugar and rice and promotes conditions in which the
2007 hectare),
has a sizable surplus, which is beyond food-insecure are able to raise their
2008 the limit set by the government, in income, live healthier and be more
Afghanistan 8.53 1.34 domestic stock. Currently, the Indian productive. But not all will gain from
Bangladesh 7.97 3.97 government is ready to export surplus liberalization. Those that are hurt
Bhutan 0.13 1.95 food grains, especially when grain and are increasingly vulnerable have
prices are record high, but is waiting to be taken care of by implementing
India 158.65 2.65
to assess the total domestic demand appropriate safety net programmes
Maldives 0.004 3.92 that will be mandated by the upcom- such as food-for-work, school feed-
Nepal 2.36 2.36 ing Food Bill.9 After the food crisis of ing and in-cash or in-kind transfers.
2007–2008, India had restricted exports For instance, Bangladesh extended its
Pakistan 21.50 2.67
of major food items. It is yet to relax work-for-food programme in response
Sri Lanka 0.97 3.66 those restrictions. to damages caused by natural disas-
Source: World Development Indicators, World Bank. While it is politically justified to ters and rise in food prices.11

Trade Insight Vol.7, No.1, 2011 23


cover feature

Trade barriers and food crisis food stocks from government depots Notes
Food security is a multidimensional and subsidized food items at fair 1
About 44 million people fell below the
issue and agriculture trade is one tool price shops. Sri Lanka reduced import poverty line of US$1.25 a day due to
to address food shortages. Though in- tariff and implemented non-targeted high food prices between June and
subsidies. December 2010, according to Ivanic,
tra-regional trade in agriculture goods
M., W. Martin, and H. Zaman. 2011. “Es-
is higher, in relative terms, than total Increasing production and pro- timating the short-run poverty impacts
intra-regional merchandise trade in ductivity is key to addressing the of the 2010–2011 surge in food prices.”
South Asia, a host of barriers constrain availability of adequate food. Without World Bank Policy Research Working
Paper 5633, Washington, D.C.
such trade. surplus production and trade comple-
mentarity, it is hard to increase agri-
2
Figures computed from United States
Some countries have not relaxed Census’s international population pro-
exports restrictions despite having a culture trade aimed at addressing food jection available at http://www.census.
surplus of food grains. Furthermore, insecurity. Countries like India that gov/ipc/www/idb/region.php
most countries are imposing high tar- have surplus food stocks should take 3
Karapinar, Baris. 2010. Introduction:
iff, para-tariff and non-tariff barriers in the initiative to relax export restric- Food crisis and the WTO. In Karapinar,
Baris and Christian Haberli (eds.).
agriculture trade.12 Most countries pro- tions at least in the region. Meanwhile, Food Crisis and the WTO. Cambridge:
tect most agriculture goods under the all countries should prioritize agricul- Cambridge University Press. pp. 1–22
Agreement on South Asian Free Trade ture and focus on increasing produc- 4
Author’s computation using UN Com-
Area (SAFTA) by putting them on tion and productivity. Inadequate trade database (HS 2002 classification).
their sensitive lists. Tariffs on goods investment in agriculture, irrigation, Agriculture products include Chapters
1–23. All data unless otherwise cited are
on the sensitive lists do not have to be rural infrastructure, technology, better direct data computed using UNCOM-
cut as per SAFTA’s Tariff Liberaliza- storage and packaging facilities at the TRADE (HS 2002 classification).
tion Programme. The most-favoured- farm level, and marketing process, 5
UN Comtrade database (HS 2002 clas-
nation (MFN) applied tariff on agri- poor trade facilitation, and restrictions sification). Animal & animal products
on access to ports and/or inter-coun- (Chapters 1–4); vegetable products
culture goods in South Asia is higher
(Chapters 6–15); and food stuff (Chap-
than in some other regions. It was try roads usage, among others, are the ters 16–23).
29 percent during 2006–2009, com- major hurdles that need to be ad- 6
Asian Development Bank. 2011. “Global
pared to just 9.93 percent in ASEAN. dressed to increase agriculture trade food price inflation and developing Asia.”
High trade barriers—both export and to ensure food security.13 This Available at www.adb.org/documents/
reports/global-food-price-inflation/food-
restrictions and import barriers—are should be supplemented by reduc-
price-inflation.pdf#page=30
complicating efforts to mitigate food ing, to the most reasonable extent, all 7
Estimates by Economic Research
insecurity in the region. forms of trade restrictions that hamper Service, using the 1996 ICP data, by
Theoretically, agriculture trade the free flow of agriculture goods in United States Department of Agriculture
liberalization leads to, inter alia, a the region. (USDA).
reduction in the price of agriculture Creating a policy environment
8
International Food Policy Research
Institute. 2010. “Global Hunger Index
imports in the importing country where farmers are incentivized to
2010.” www.ifpri.org/publication/2010-
and helps increase agriculture output be more productive and engaged in global-hunger-index-background-facts-
by providing attractive price signals agriculture activities is also crucial for and-key-findings
to farmers in the exporting country. food security. For this, policies should 9
Mukherjee, Kritiivas. 2011. “Food rights
However, as noted above, not all will be designed in such a way that farm- bill holds key to India farm exports plan.”
http://in.reuters.com/article/2011/05/14/
be winners from liberalization. The ers are encouraged to cooperate so idINIndia-56866620110514
losers will have to be taken care of that there are economies of scale even 10
Martin, Will and Kym Anderson. 2010.
by implementing appropriate social when there is fragmented small-scale “Trade distortions and food price surg-
safety net programmes. land holdings. Furthermore, food- es.” Paper presented at the World Bank-
price stability is also an important UC Berkeley Conference on Agriculture
During the recent food crisis,
and Development- Revisited, Berkeley,
Afghanistan increased food supply aspect that needs to be adequately ad- 1–2 October 2010.
by using buffer food stock grains, dressed to ensure food security in the 11
Coady, David, Margaret E. Grosh
targeted food aid to the most vulner- region. Agriculture sector firms should and John Hoddinott. 2003. Targeting
able population, and gave subsidies be given enough incentives to produce of transfers in developing countries:
goods that are vital to maintaining Review of Lessons and Experience.
on agriculture inputs. Pakistan relaxed Washington, D.C.: The World Bank.
import tariff on sugar, released grains food security. Importantly, these poli- 12
See Samaratunga, Parakarma and
from its buffer stocks, and provided cies have to consider the impact of Manoj Thibbotuwawa. 2006. “Mapping
subsidies on food stuff sold through climate change on agriculture produc- and analysis of South Asian agricultural
state-owned food depots. Bangladesh tion and trade as well. All of these will trade liberalization effort.” ARTNeT
Working Paper Series No. 26.
and India also followed similar poli- require greater regional coordination
13
“Agricultural Trade and Poverty: Can
cies, but imposed restrictions on rice to reduce food security and trade
trade work for the poor?”, FAO Agricul-
and sugar exports. Nepal released policy inconsistencies. „ ture Series No. 36, 2005.

24 Trade Insight Vol.7, No.1, 2011


trade and environment

WTO Negotiations on
Environmental Goods
South Asia’s
Interests
Fahmida Khatun

www.thegreenenergyinfo.com

S outh Asian countries (SACs) face


multiple challenges in the areas of
environment, ranging from air and
tance, such environmental problems
will pose threats to the achievement
of the related targets set in the United
Discussions on EGs at the WTO
The definition and coverage of
EGs has been a contentious issue
water pollution to soil degradation Nations Millennium Development in negotiations at the World Trade
and desertification to depreciation Goals. SACs can tackle many of their Organization (WTO). Key issues that
of forest and fish resources, loss of crucial environmental problems complicate defining EGs include, first,
biodiversity and destruction of eco- through increased access to environ- whether “environmental goods”
systems, urbanization and congestion. mental goods (EGs), which will also should include products with multiple
They are also vulnerable to the risk contribute to their economic growth end-uses; second, the mechanisms of
of climate change which is feared to and to improving their social indica- capturing goods by the harmonized
lead to glacial lake outbursts, sea level tors such as health. Access to EGs will system (HS); and third, how goods
rise, droughts and floods, with severe give the countries an opportunity to and services that correspond to local
impacts on the lives and livelihoods of access technology and know-how. concerns can be identified as EGs in
a large number of people in the region. This can also induce energy- and re- the global trade context.1
Unless addressed with due impor- source-efficiency in the economy. Definitions by the Organisation for

Trade Insight Vol.7, No.1, 2011 25


trade and environment

Economic Co-operation and Develop- Most developing common but differentiated responsi-
ment (OECD) and the Asia Pacific countries would be bilities, integrating environmental and
Economic Cooperation (APEC) were development concerns in the approach
starting points in the discussion of
interested in get- to the negotiations. The project-based
EGs in the context of the Doha Round.2 ting EPPs covered approach has been criticized by devel-
The OECD and the APEC developed by the definition oped countries, however, for failing to
two separate lists of environmental of or approaches provide predictable, binding and per-
products: the former in the context of manent trade concessions, questioning
to EGs that will be
analytical work on the role of environ- its consistency with WTO rules.
mental goods and services (EGS) in finally adopted in A third alternative is an integrated
environmental policy and industrial the EG negotia- approach requiring the Committee
competitiveness, and the latter result- tions at the WTO. on Trade and Environment in Special
ing from negotiations on trade liberal- Session (CTESS) to multilaterally pre-
ization among APEC countries. identify categories of environmental
WTO Members also proposed their a “development list” to be developed projects and EGs used under such
own products in the context of the EG by developing and least-developed projects which would benefit from tar-
negotiations based on their perceived countries to identify EGs subject to iff and NTB concessions. Yet another
interests and comparative advantage. lower tariff reductions based on the approach suggested is a “request/of-
In 2007, the “Friends of EGs” submit- principle of less than full reciprocity. fer” approach whereby each country
ted, as EGs, a list of 153 items under 12 However, the list-based approach has will identify products which, in its
broad categories. been criticized on the ground that it view, contribute to the environment
Developed countries are advo- may lead to the liberalization of goods and seek tariff concessions on those
cating a “list-based” approach for that have both environmental and products, at the same time indicating
identifying specific EGs whereas many non-environmental end uses. the products in which it is prepared to
developing countries are supporting On the other hand, the project- undertake liberalization commitments
alternative approaches, particularly based approach, spearheaded by as requested by other Members.
the liberalization of EGs associated India, would allow imports of goods A number of suggestions have
with a specific environmental project. and services at concessional terms for been made in the CTESS for the pur-
Under the list-based approach, coun- environmental projects approved by pose of identifying EGs. These include
tries would identify specific EGs and a designated national authority based focusing on the product’s “end use”
then negotiate the elimination or re- on a set of criteria developed by the or “direct use” but concerns have been
duction of bound tariffs and non-tariff WTO Committee on Trade and Envi- raised about the dual- or multiple-use
barriers (NTBs) permanently on those ronment. This approach is said to rec- of these products. On the other hand,
goods on a most-favoured-nation ognize the diversity in environmental it has been stressed that distinctions
basis. Suggestions have been made for standards and articulate the concept of based on processes and production
methods should not be used as the ba-
sis for the identification of EGs. Other
Table 1 considerations relate to the concept of
South Asia’s export and import of environmental goods (US$ million) environmentally preferred products
Country Export Import (EPP), which, according to the United
2001 2007 2001 2007
Nations Conference on Trade and
Development (UNCTAD), are those
Afghanistan 0.00 1.71 4.76 156.15
goods the production and sale of
Bangladesh 137.29 351.10 297.31 488.00
which contribute significantly to the
Bhutan 0.27 0.27 1.53 9.28 preservation of the environment.
India 940.39 5,022.09 1,807.96 10,360.44 Most developing countries’ export
Maldives 0.10 0.00 24.06 68.76 interests lie in EPPs. Thus, they would
Nepal 0.00 29.95 0.01 50.17 be interested in getting these products
Pakistan* 40.13 88.65 523.69 1696.17 covered by the definition or approach-
Sri Lanka 13.57 48.02 172.25 351.60 es that will be finally adopted in the
South Asia 1,131.74 5,541.78 2,831.57 13,180.57 EG negotiations at the WTO. Such
products include, for instance, natural
World 323,041.99 783,206.37 333,793.60 753,796.24
fibres and colorants, non-timber forest
% share of South
0.35 0.71 0.85 1.75 products and renewable energy prod-
Asia in world ucts, including ethanol and bio-diesel,
*For Pakistan, data for 2003 is used instead of 2001.
etc.
Source: Author’s estimates based on UN Comtrade and Trade Map data.

26 Trade Insight Vol.7, No.1, 2011


Table 2
South Asia’s EG trade according to broad product category, 2007 (US$ million)
Export Import
Product category South Asia World South Asia World
Air pollution control 546.72 75,596.15 1,889.88 74,586.29
Management of solid and hazardous waste and recycling
systems 628.44 130,729.82 2,157.42 120,349.17
Clean up for remediation of soil and water 65.30 5,904.99 111.29 5,469.29
Renewable energy plant 1591.11 202,314.18 3,319.86 190,689.40
Heat and energy management 73.19 13,399.67 202.17 12,493.87
Waste water management and portable water treatment 1415.59 198,215.95 2,879.80 193,121.96
Environmentally preferable products, based on end use or
disposal characteristics 385.83 547.50 110.38 436.53
Cleaner or more resource efficient technologies and
products 11.99 8251.71 71.44 9,741.66
Natural risk management 37.62 7,320.41 176.77 6,172.38
Natural resources protection 29.46 861.25 10.47 654.34
Noise and vibration abatement 570.32 56,677.40 538.57 57,615.68
Environmental monitoring, analysis and assessment
equipment 204.93 87,046.71 1,783.35 86,023.91
Source: Author’s estimates based on UN Comtrade and Trade Map data.

South Asian countries’ EG trade device, photovoltaic cells and light • Parts for diesel and semi-diesel
Among SACs, in 2007, India’s share in emit diodes engines
both exports and imports of EGs—as • Jute and other textile fibres, raw or • Parts of machines and mechanical
defined in the WTO “153 list” at HS retted appliances having individual func-
6-digit code—was the highest, at 91 • Articles, iron or steel tions
percent and 79 percent respectively. • Towers and lattice masts, iron or • Gears and gearing, ball screws,
Bangladesh, with 6 percent share in steel gear boxes, speed changers/torque
imports, stood second. In the case • Parts of machines and mechanical converters
of exports, Pakistan’s share was 12 appliances having individual func-
percent, making it the second-larg- tions Issues to consider and
est exporter (Table 1). Overall, with • Sacks and bags (for packaging strategies for negotiations
0.71 percent share in exports and 1.75 goods) of jute or of other textile
percent share in imports, South Asia’s fibers List vs project approach
share in global EG trade is extremely In the case of imports, at 6-digit HS The list approach does not emphasize
limited compared to its share in global code, the top 10 EG imports compris- the need for technology transfer ad-
merchandise trade. Table 2 compares ing 34.35 percent of SACs’ total EG equately. The project approach, on the
South Asia’s EG trade with that of the imports include: other hand, stands to offer better op-
world. • Machines and mechanical appli- portunities to SACs in terms of market
The top 10 EG exports, at 6-digit ances having individual functions access since this approach is supposed
HS code, which comprise 46.06 per- • Air or gas compressors, hoods to enable technology transfer. Since
cent of SACs’ total EG exports are: • Static converters many firms in SACs are small and me-
• Parts for diesel and semi-diesel • Taps, cocks, valves and similar ap- dium enterprises which lack financial
engines pliances and technological capability to comply
• Taps, cocks, valves and similar ap- • Parts of electric motors, generators, with standard-related requirements
pliances generating sets and rotary convert- set by the importers of developed
• Static converters ers countries, the project approach will
• Wind-powered generating equip- • Articles, iron or steel help them improve their compliance
ment • Measuring or checking instruments, requirements on technical and sanitary
• Photosensitive semiconductor appliances and machines standards.

Trade Insight Vol.7, No.1, 2011 27


trade and environment

repaintinggreen.files.wordpress
Use of process-
es and produc-
tion methods to
determine EPPs
may turn into
environmental
protectionism
at times.

Inclusion of products of export for their products which have less developing and least-developed ones.
interest to South Asia negative environmental impact and Article 66.2 of TRIPS, which mandates
SACs have an interest in EPPs which which are derived in an environment- Members to take measures to encour-
are agricultural and natural resource- friendly way. age technology transfer, should be
based. In determining EPPs, processes implemented for climate technologies.
and production methods (PPMs) are Elimination of NTBs SACs should also be watchful of any
used in order to examine how prod- Standards, certifications, and envi- attempts of dumping old technologies
ucts are grown, extracted, manufac- ronmental regulations limit trade to a by developed countries in the name of
tured and provided in a sustainable great extent. Products from develop- technology transfer.
manner in all or some stages of their ing countries and LDCs face difficul-
life cycle. But the use of PPM to de- ties in entering foreign markets due Technical and
termine the environmental benefits of to a lack of appropriate standards for financial assistance
agriculture and natural resource-based their products, which may be quite In order to take full advantage of EGS
products such as forestry and fisher- stringent. The lack of uniformity of liberalization, technical and financial
ies involves labelling and certification environmental requirements and tech- assistance is essential. Such assistance
schemes which may turn into environ- nical regulations in different national is needed not only for buying clean
mental protectionism at times. markets is known to affect the type technologies but also for addressing
of EGs that are used to meet environ- any probable negative impact of such
Special and differential mental requirements, and thus act as liberalization on South Asia. „
treatment to LDCs NTBs. Identification, harmonization Dr. Khatun is Head of Research, Centre for
It is likely that many of the EGs and elimination of NTBs for products Policy Dialogue, Dhaka.
will fall under various preferential identified as EGs are essential in order
programmes offered to least-devel- to facilitate trade in such goods. Notes
oped countries (LDCs) by developed
countries. Therefore, if these products Review of IPR regime and 1
Jha, Veena. 2008. “Environmental
priorities and trade policy for environ-
are listed as EGs, tariffs for these items technology transfer mental goods: A reality check.” ICTSD
will be reduced at a faster pace, which In order to solve the problems of pat- Programme on Trade and Environment.
will erode LDCs’ preferences in those ented climate-friendly technologies, Issue Paper No.7. September 2008.
markets and reduce their competi- flexibility in the Agreement on Trade- 2
Organisation for Economic Co-operation
tiveness. South Asian LDCs should related Aspects of Intellectual Rights and Development (OECD). 2003. COM/
ENV/TD (2003) 10/FINAL, “Environmen-
demand special and differential (TRIPS) of the WTO has been de- tal Goods: A comparison of the APEC
treatment for improved market access manded by several countries, mostly and OECD lists.”

28 Trade Insight Vol.7, No.1, 2011


partnership for development

Let-down at

Paras Kharel
UNLDC IV
T he Fourth United Nations Con-
ference on the Least Developed
Countries (UNLDC IV), held in
tional Agriculture Centre” dedicated
to LDCs. He also declared that Turkey
will allocate US$5 million for the
Istanbul from 9–13 May, approved a monitoring of the implementation of
10-year Istanbul Programme of Action the IPoA and that it was ready to host
(IPoA) that is high on rhetoric but de- a Mid-Term Review Conference of the
void of quantified, time-bound targets IPoA in 2015.
and, in some cases, even represents a The priority areas for action identi-
regression over past developed-coun- fied in the IPoA are: productive capac-
try commitments. enhance the productive capacities of ity; agriculture, food security and
The main objective of UNLDC IV LDCs is well-recognized, financial rural development; trade; commodi-
was to review the implementation of resources are a critical impediment to ties; human and social development;
the Brussels Programme of Action achieving the same. But the IPoA fails multiple crises and other emerging
(BPoA) that was set for the decade to include a credible commitment by challenges (including climate change
2001–2010, and obtain fresh commit- developed countries to increase aid to and environmental sustainability);
ments from development partners to LDCs. Developed countries have com- mobilizing financial resources for
assist the world's poorest countries, mitted to realizing the 0.15-0.2 percent development and capacity-building;
which currently number 48 after three of their Gross National Income (GNI) and good governance at all levels. The
LDCs managed to graduate from the target for official development assis- sections below discuss the outcomes
status since the LDC category was first tance (ODA) without credible guar- on trade and climate change issues.
officially created. antee that the commitment would be
The IPoA does not address the realized. Moreover, the target actually Trade
implementation gaps with regard to is an unfulfilled past promise, and, LDCs’ major, long-standing demand—
the BoPA. It appears that LDCs have even if realized, will not represent an complete duty-free and quota-free
made more commitments than their additionality in aid. Ahmet Davuto- market access—was not met. An
development partners. glu, the Turkish Minister of Foreign extremely weak formulation provides
The IPoA emphasizes the build- Affairs, and Chair of the Conference, for the realization of “timely imple-
ing of productive capacities of LDCs. remarked that “developed countries mentation of duty-free quota-free
“The stress on productive capacity is abstained from additional financial market access, on a lasting basis, for
favoured by LDCs as a means to mod- commitments in the Conference”. all least developed countries consis-
ernize and diversify economies, create The host of UNLDC IV, Turkey, tent with the Hong Kong Ministerial
jobs and engage sustainable means to announced an annual assistance of Declaration adopted by the World
eventually eradicate poverty,” said US$200 million to LDCs, starting in Trade Organization in 2005”. This is
UN Under-Secretary-General Cheick 2012 for technical cooperation projects a let-down in two respects: there is
Sidi Diarra, the High Representative and programmes as well as scholar- no deadline for implementation, and
for the LDCs, Landlocked Developing ships. In addition to the “International there is no commitment to go beyond
Countries and Small Island Develop- Science, Technology and Innovation the 97 percent coverage of the Hong
ing States. Centre”, Minister Davutoglu said Tur- Kong Declaration.
While the need to build and key was prepared to host an “Interna- Development partners have com-

Trade Insight Vol.7, No.1, 2011 29


partnership for development

mitted to support LDCs’ efforts in pro- Stringent rules of origin have funds for adaptation to LDCs under
moting sub-regional and regional co- diluted preferential market access UNFCCC, including the Least Devel-
operation, including export promotion opportunities for LDCs. The IPoA oped Countries Fund, the Adaptation
and improving regional connectivity features a commitment to ensure that Fund, and other funds disbursed
through trade-facilitating measures, preferential rules of origin applicable through other global and bilateral
such as joint projects on customs and to imports from LDCs are simple, programmes, no additional resources
border procedures, and insofar as transparent and predictable and con- are pledged. This raises the spectre of
possible transport infrastructure and tribute to facilitating market access. diversion of funds for climate change-
linkages, telecommunications facilities A similar commitment was made in related assistance from other sectors.
and energy. the BPoA as well as in the Hong Kong The development partners also
They have also committed to sup- Ministerial of the World Trade Organi- pledge to provide financial and techni-
port LDCs’ efforts to strengthen their zation (WTO) in 2005, but the problem cal assistance and facilitate technol-
human, institutional and regulatory persists. ogy transfer to LDCs to develop and
capacities in trade policy and trade implement national strategies for
negotiations in areas such as market Climate change sustainable use, preservation and pro-
entry and access, tariffs, customs, com- On climate change, LDCs are required tection of the national environmental
petition, investment and technology, to make onerous commitments, resources and the sustainable man-
and regional integration; and provide some going beyond their obligations agement of marine biodiversity and
technical and financial support to under the United Nations Framework ecosystems in line with their broader
national and regional projects that are Convention on Climate Change (UN- sustainable development strategies.
aimed at increasing the productivity, FCCC), while there is no new pledge They also pledge to accelerate the
competitiveness and diversification by developed countries on financing legal and institutional arrangements
of LDC economies, including through or technology transfer. LDCs are re- for the establishment and full opera-
strengthening the capacity of their quired to mainstream and implement tionalization of the Green Climate
trade in goods and services and of national adaptation programmes of Fund, as part of the implementation
LDCs’ firms to integrate into interna- action (NAPAs), medium and long- package included in the decisions
tional value chains. term national adaptation plans and adopted during the 16th Conference
Support is also committed in the nationally appropriate mitigation of the Parties to UNFCCC in Can-
form of financial and technical as- actions (NAMAs), and integrate these cun, Mexico, in 2010. Other pledges
sistance aimed at the diversification into national development plans. include: implementing measures to
of LDC economies, while providing Development partners commit promote and facilitate clean develop-
financial and technical assistance to “provide adequate financial and ment mechanism projects in LDCs
through appropriate delivery mecha- technical assistance and support, as to enable them to harness benefits of
nisms to meet their implementation appropriate, to least developed coun- mitigation of climate change for sus-
obligations, including fulfilling Sani- tries to access appropriate, affordable tainable development; helping LDCs
tary and Phytosanitary Agreement and sustainable technologies needed address the challenges of livelihood
and Agreement on Technical Barriers for the implementation of NAPAs and and food insecurity and health of the
to Trade requirements, and to assist NAMAs and the transfer of such tech- people affected by the adverse impact
them in managing their adjustment nologies on mutually agreed terms.” of climate change and respond to the
processes, including those necessary to While IPoA speaks of replenishment needs of the people displaced as a re-
face the results of most-favoured-na- and expediting of the disbursement of sult of extreme weather events, where
tion multilateral trade liberalization. appropriate, at national, regional and
Developed countries have com- international levels; and supporting
mitted to provide, in accordance with capacity enhancement of meteorologi-
article 66.2 of the TRIPS Agreement, The absence of a cal and hydrological services of LDCs.
incentives to enterprises and institu- commitment to But civil society organizations said
tions in their territories for the pur- that such pledges have been “under-
pose of promoting and encouraging
provide new and mined by the developed countries
technology transfer to LDCs in order additional funding systematically having removed any
to enable them to create a sound and to the LDCs renders targets, timetables and delivery
viable technological base. The absence most of the com- mechanisms that may have been used
of a commitment to provide new and to hold them to account”.1 „
mitments made
additional funding renders most of
these commitments rhetorical, despite by developed Note
a pledge to enhance the share of assis- countries in Istanbul 1
http://ictsd.org/i/news/bridgesweek-
tance to LDCs for Aid for Trade. rhetorical. ly/106915/

30 Trade Insight Vol.7, No.1, 2011


www.cargonewsasia

WTO
Report Card
on Sri Lanka’s Trade Policy
Saman Kelegama

B efore the World Trade Organiza-


tion (WTO) was formed, a Trade
Policy Review Mechanism (TPRM)
strategy of Sri Lanka. That trade policy
should dictate the development path
of a country as advocated by ardent
and trade facilitation, among others.
Since the last WTO review in 2004, Sri
Lanka has not been involved in any
of member countries of the Gen- neo-liberal economists does not carry disputes under the WTO rules.
eral Agreement on Tariffs and Trade favour in the WTO review; this is
(GATT) was introduced on a trial basis indeed a positive feature. Framework and objectives
in 1989. It became a permanent fea- The Report then acknowledges After highlighting the positive devel-
ture once the WTO was established in that Sri Lanka’s trade policy continues opments in the trade policy regime,
1995. Under the TPRM, trade policies to be aimed at achieving greater inte- the Report expresses concerns in a
are reviewed periodically, although gration into the global economy via number of areas. Exports have grown
the time may vary according to WTO the WTO, regional trading agreements over the years but the performance is
schedules. The first review for Sri and bilateral trading agreements less impressive vis-à-vis competitors.
Lanka was completed in 1995 and the through an incentive regime geared For instance, in 1990, exports from
second in 2004. The third review Re- to encouraging exports and invest- both Vietnam and Sri Lanka amounted
port was published in December 2010. ments, and a number of development close to US$2 billion, but by 2008,
The 2010 Report first praises Sri programmes to improve the country’s Vietnam's exports amounted to US$61
Lanka for performing reasonably well infrastructure. billion while Sri Lanka's exports
despite major internal and external The Report notes that Sri Lanka amounted to approximately US$8
shocks after 2003. Examining the has been an active participant in the billion. Moreover, Sri Lankan exports
document, “Sri Lanka’s Ten Year WTO Doha Development Agenda were less diversified, product- and
Horizon Development Framework (DDA) and has contributed to propos- market-wise.
2006–2016” (TYHDF), the evalua- als/debates on technical barriers to The Report, while identifying these
tion expresses satisfaction with the trade; geographical indications; label- features of the Sri Lankan export sec-
mainstreaming of trade policies into ling of textiles and clothing, footwear tor, closely observes that the non-Unit-
the overall economic development and travel goods; preference erosion; ed States and non-European markets,

Trade Insight Vol.7, No.1, 2011 31


trade policy review

in particular in Asia, are increasingly

roadwingsint.com
becoming important destinations
for Sri Lankan exports (while these
markets have been large sources of
imports to Sri Lanka for many years).
The Report cogently argues for con-
solidating Sri Lanka’s links with Asian
markets, in particular the growing
markets of India and China.
The Report states that the trade
reforms since the last review show
a mixed picture with new border
charges, which, on average, have in-
creased trade protection. For instance,
the average most-favoured-nation
(MFN) tariff was 11.5 percent in 2010
compared to 9.8 percent in 2003.
The Report then goes on to say
that trade policy has been guided to a
large extent by revenue consideration.
These points are debatable because the 250 percent, are applied to a handful resort to ad hoc import tax imposition
post-2004 economic policies are based of products (mostly cigarettes and and removal adds discretion and cre-
on a mixed economy model where tobacco) and this is followed by the 30 ates confusion among importers. De-
import substitution and small- and percent band (mostly agriculture and spite the complex import tax regime,
medium-industry promotion have food products, consumer goods, chem- the Report commends efforts made by
received equal priority as export icals, and other intermediate goods the authorities to make available all
promotion. Thus, the rise in MFN manufactured locally), the 15 percent import charges online.
tariffs is as per the TYHDF, although band (intermediate products), the 5
it may not be consistent with the spirit percent band (semi-processed raw Trade policies and
of the WTO. Moreover, it is not only materials), and the 0 percent band. practices by measures
revenue considerations but a con- Some 44.4 percent of tariff lines are in Sri Lanka has benefitted somewhat
certed effort for additional protection the 0 percent band, 23.1 percent in the from donor partners’ contributions to
that has driven tariffs upwards. The 15 percent band and 21.3 percent in the Aid for Trade (AfT) initiative to
most widely used tariff rate of 25 the 30 percent band. Zero-duty items implement trade-related measures.
percent was increased to 28 percent in have increased due to the elimination Most AfT has been focused on trade
August 2007 and again to 30 percent of the 2.5 percent tariff rate, which was facilitation, improving competitive-
in June 2010 after the abolition of some replaced with zero duty. ness and investment climate, and
nuisance taxes that were imposed on The Report also refers to various amounted to US$1.77 billion between
the border. add-on taxes at the border—Commod- 2004 and 2008.
Binding tariff levels under the ity Export Subsidy Scheme (CESS), Sri Lanka has now implemented
WTO gives more predictability to Social Responsibility Levy (SRL), the WTO Customs Valuation Agree-
the trade regime. In Sri Lanka, only Ports and Airport Development Levy ment (CVA); however, the Report
36.4 percent of tariff lines are bound (PAL), Nation Building Tax (NBT), expresses concern over domestic
at rates ranging from 0 percent to 75 etc.—which have been highlighted legislation permitting use of minimum
percent. In general, applied rates are in the past. For instance, in 2007, the values, for example, on reconditioned
lower than bound rates with an aver- overall customs revenue increased to motor vehicles, which is a departure
age bound tariff of 32.7 percent. The close to 8 percent of gross domestic from CVA rules.
Report notes that applied rates in 103 product (GDP) compared to import Non-automatic import licensing is
Harmonized System (HS) tariff lines tariff revenue amounting to 2 percent required for 500 tariff lines although
exceeded the bound rates. This is an of GDP due to these add-on taxes.1 Sri Lanka’s use of non-tariff barriers
area that needs policy attention. Some of the add-on taxes, such as is relatively limited. All 103 trade-
On the positive side, the follow- the SRL, were removed in the No- related technical regulations of Sri
ing are noted. The number of tariff vember 2010 budget but more needs Lanka have been notified, including 18
bands has fallen from 11 in 2003 to 9 in to be done to have a transparent and sanitary and phytosanitary measures,
2009 and to 5 in late 2010. At present, predictable border trade regime, and to the WTO.
the highest bands, 100 percent and the Report goes on to say that frequent The Report notes that the Anti-

32 Trade Insight Vol.7, No.1, 2011


Commission will only be subject to engage in and benefit from their ag-
investigation for mergers and acquisi- riculture practices). The Report does
It is not only revenue tion, but all other companies outside not make any reference to the Protec-
considerations but a this domain will not be investigated. tion of New Plant Varieties (Breeders'
It is high time that legislation in this Rights) Bill of 2001. This Bill has been
concerted effort for area is enacted for promoting a more discussed in a number of seminars but
additional protec- competitive and consumer-friendly there does not seem to be any urgency
tion that has driven environment. with regard to debating the Bill and its
tariffs upwards in Sri The Report makes a number of ref- speedy enactment. India has already
erences to the trade-investment nexus enacted legislation in this area.
Lanka, with average
in Sri Lanka (investment follows trade The Report makes strong reserva-
most-favoured-na- and more trade follows investment). tions on procurement procedures. It
tion tariff increasing With regard to the Board of Invest- notes that the government procure-
from 9.8 percent to ment (BOI), the Report argues the case ment, despite the abolition of the
11.5 percent during for streamlining all BOI incentives National Procurement Agency in 2008,
under the Inland Revenue Depart- continues to be used to promote do-
2003–2010.
ment—a recommendation which has mestic suppliers and products, which
resonance with the Presidential Taxa- is contrary to WTO rules. Moreover,
tion Commission and various reports notification is yet to be done to the
of the International Monetary Fund WTO with respect to State-Trading
Dumping Bill that was debated (IMF). The Report emphasizes that Enterprises under Article XVII of
in Parliament in 2005 is yet to be since the war is over and the economy GATT 1994. In regard to the former,
ratified. Whether to implement the is showing high growth rates, the case Sri Lanka has not violated any WTO
Anti-Dumping legislation or not for extra incentives for foreign direct rules as Sri Lanka is not a member the
could be debated but it was opposed investment (FDI) is not appropriate. WTO Plurilateral Agreement on Gov-
in Parliament strangely by a politi- In order to comply with the Agree- ernment Procurement, and is not plan-
cal party representing the interest of ment on Trade-Related Aspects of ning to do so in the future. In order to
the national economy, arguing on the Intellectual Property Rights (TRIPS), strengthen domestic entrepreneurship,
misguided belief that anti-dumping Sri Lanka enacted a new intellectual the government grants price prefer-
legislation is pro-WTO and against property rights (IPRs) legislation in ences for locally manufactured goods
the national interest! Ever since this 2003. This Act covers copyright and to promote value additions to local
opposition, the Bill has been kept in related rights, industrial designs, raw materials and domestic bidders.
cold storage. patents, marks and trade names, The latter point is, of course, valid.
The Report shows that export layout designs of integrated circuits,
taxes, almost abolished in 1992, now geographical indications, etc. The Trade policies by sector
apply only to some mining/mineral terms of copyright protection has been The final section of the Report high-
items exported in raw form while an extended to life plus 70 years (from 50 lights the following with regard to
export CESS applies to a number of years earlier). Despite this legislation, agriculture, industry and services
products for the purpose of research the Report says that counterfeiting sectors. It shows that a consistent trade
and development of those sectors. and piracy are a problem due to weak policy is absent for the agriculture
Since these CESS funds go to the enforcement. The Report recommends sector. Tariff changes to encourage
Consolidated Fund, it is difficult to say training officers, building public domestic agriculture production and
how much of these funds actually go awareness, and stricter enforcement as at the same time to give a reasonable
for the development of those sectors. the way forward. price to the consumer have been a
With regard to the Consumer Important concerns face Sri Lanka difficult exercise, thus giving an ad hoc
Affairs Authority (CAA), the Report in formulating IPR policies in agri- structure to agriculture tariffs.
highlights a major anomaly that has culture. The major issues include: the While more protection to the
been highlighted in previous writings implications of IPRs for the price of farmer has been the preferred govern-
on the subject, i.e., the CAA Act does seeds; the rise of bio-piracy; farmers’ ment policy, when supply responses
not empower it to conduct investiga- access to seeds; and the impact of IPR are inadequate due to internal shocks
tions on the existence of monopolies or on biodiversity. Various countries in and infrastructure inadequacies, the
to examine mergers and acquisitions the South Asian region are currently government has resorted to tariff re-
that have already taken place. Utili- attempting to evolve a twin strategy duction to keep food prices low. The
ties that fall under the Public Utilities of granting both plant breeders’ rights Report recommends a more consistent
Commission and listed companies (a form of IPR for plant varieties) and trade policy for developing agriculture
under the Securities and Exchange farmers’ rights (rights of farmers to infrastructure and institutions such

Trade Insight Vol.7, No.1, 2011 33


trade policy review

as marketing chains, storage facilities, international trading has so far been abled services (13 percent of services
transportation, etc. limited. Sri Lanka has made commit- exports amounting to US$250 million
Rationalizing domestic support ments in three services sub-sectors, in 2009), in particular, business pro-
(e.g., fertilizer subsidy), improving viz., tourism, telecommunication, cess outsourcing, as an area offering
agriculture infrastructure, implement- and financial services. In its sched- significant potential, it is all the more
ing reforms in the land market, and ule of commitments in these sectors, imperative to address the shortcom-
implementing a more consistent trade horizontal limitations and conditions ings in the telecom regulatory frame-
policy will increase agriculture pro- relating to commercial presence are work as early as possible.
ductivity, says the Report. However, described. Commercial presence with In sum, the section on ser-
Sri Lanka made a mistake in the mid- foreign equity in excess of about 40 vices highlights some of Sri Lanka’s
1990s by binding agriculture tariffs at percent is subject to case-by-case ap- strengths and the need to expose the
a relatively low 50 percent (compared proval under the discretion of the BOI. services sector to international trading
to other South Asian countries) which Sri Lanka considers services liber- to gain maximum opportunities from
triggered many ad hoc tariff changes alization as an important tool to attract economies of scale.
and lowered the productivity of the FDI. The Report notes that Sri Lanka’s
agriculture sector. actual market access conditions are Conclusion
With regard to the manufactur- more liberal than those stipulated in Despite the slow progress of the
ing sector, the Report highlights that its schedule of specific commitments DDA, the WTO creates a framework
tariffs for manufactured products under the WTO's General Agreement within which local decision-making
range from 0 percent to 30 percent. on Trade in Services. It also notes can unleash important opportunities
Processed goods receive higher protec- that under the DDA, Sri Lanka has flowing from a rules-based interna-
tion than semi-processed goods, and considered the possibility of making tional system. Strong signals to the
raw materials are duty free. Average further commitments in sectors such market can be given by “locking-in”
MFN tariff for manufactured products as tertiary education, retail trade, and the trade policy regime (while giving
increased from 8 percent in 2003 to 9.2 professional services where the initial due policy space) under these rules
percent in mid-2010 due to an increase offer has already been submitted. by trade policy makers. This will also
of rates applied on all main industrial There is a detailed description enhance the credibility of the country
categories. The tariff structure basi- of these three sectors with special in multilateral forums.
cally reflected the government strategy reference to the regulatory structures The Report is very comprehensive
of promoting value added in manu- governing them. In tourism and finan- and gives a broad-brush scrutiny
facturing and the domestic industry’s cial services, the regulatory structures of the trading regime which is not
high dependence on imports of raw have made rapid progress to with- normally found in economic reports
materials and intermediate goods, stand further liberalization of the sec- produced on Sri Lanka. While wel-
although adjustments of tariffs in June tor. But in financial services, the large coming the progress Sri Lanka has
2010 adversely affected some im- presence of the two state banks is seen made in trade policy, the Report has
port substitution industries. Only 26 as an impediment to private sector highlighted the major shortcomings
percent of manufacturing tariff lines expansion, although this assertion is that needs the attention of policy mak-
are bound at an average rate of 21.3 disputed by the government claiming ers, in particular, lack of notifications
percent. Applied rates on 143 HS tariff that these banks’ lending to the private and going beyond bound tariff levels
headings exceeded the bound rates, sector has increased significantly. and not renegotiating these levels
and this matter needs to be addressed. The regulatory framework vis- under Article 28 of the GATT. The
Incentives are the preferred policy à-vis telecom has some way to go to contents of the Report will have to be
instrument to promote manufacturing encourage more private sector partici- carefully examined and addressed by
when exchange rate policy is restricted pation, according to the Report. The the government of Sri Lanka. Given
by debt management, cost escalation Telecom Regulatory Commission’s the diversity of issues raised in the
and other issues. However, the fiscal proposed Ten-Year Development Report, the government may also have
space for granting incentives is limited Plan (2006–2016) identifies some of to seriously consider establishing an
and the BOI incentives, as stated ear- the problems in the sector: the lack of integrated approach to trade policy
lier, need streamlining. In this context, a seamless interconnection regime, formulation in the near future. „
maintaining flexibility and stability the reluctance to share infrastructure Dr. Kelegama is Executive Director,
of the exchange rate becomes a vital facilities among operators, the lack of Institute of Policy Studies of Sri Lanka,
policy issue for the growth and suste- an effective surveillance mechanism Colombo.
nance of manufacturing. to monitor compliance, and insuf-
With regard to services, the Report ficient enforcement powers in current Note
notes that it is the largest sector in legislation. Since the government has 1
See The Island (Business), 30 August
Sri Lanka’s GDP, but its exposure to identified information technology-en- 2010.

34 Trade Insight Vol.7, No.1, 2011


understanding WTO

Agriculture reform programme:


Concerns of LDCs and NFIDCs
The implementation of the decision taken at the WTO to address the food security concerns
of LDCs and NFIDCs has focused only on short-term measures.

T he final round of negotiations


among the Members of the Gen-
eral Agreement on Tariffs and Trade
leading to greater liberalization of
trade in agriculture, least-developed
and net food-importing developing
• the adoption of guidelines on
concessionality;
• financial and technical assistance
(GATT), which established the World countries may experience negative ef- under aid programmes to improve
Trade Organization (WTO), was the fects. Specifically, problems may arise agriculture productivity and infra-
Uruguay Round. A major sticking which pertain to the availability of structure; and
point in the negotiations was the wide adequate supplies of basic foodstuffs • differential treatment in the con-
difference, between the European from external sources on reasonable text of an agreement to be negoti-
Community on the one hand and the terms and conditions, including short- ated on agriculture export credits.
United States and major farm-export- term difficulties in financing normal The NFIDC Decision also takes
ing nations on the other, on how to levels of commercial imports of basic into account the question of access
reduce government support and pro- foodstuffs. The NFIDC Decision ac- to the resources of international fi-
tection to farmers. At the same time, cordingly established mechanisms nancial institutions under existing
this issue raised concerns among net which provide for: facilities, or such facilities as may
food-importing developing countries be established, in order to address
(NFIDCs). They were worried that as • review of the level of food aid and short-term difficulties in financ-
structural surpluses in many devel- the initiation of negotiations in the ing normal levels of commercial
oped countries declined and world appropriate forum to establish a imports.
market prices recovered from the arti- level of food aid commitments suf- Under Article 16.1 of the Agree-
ficially low levels that had prevailed as ficient to meet the legitimate needs ment on Agriculture (AoA), devel-
a result of dumping and extensive use of developing countries during the oped-country Members of the WTO
of export subsidies, benefits of agri- reform programme; are required to take actions pro-
culture trade liberalization and reform
could be diminished or outweighed in Box
the short to medium term.
LDCs and NFIDCs
In response to these concerns, and
as an integral part of the Uruguay According to a list established by the WTO Committee on Agriculture
Round outcome, Ministers at Mar- and revised latest on 22 March 2005, 74 developing countries are eligible
rakesh in April 1994 adopted the as beneficiaries of the net food-importing developing countries (NFIDC)
“Decision on Measures Concerning Decision. This list comprises the 48 least-developed countries (LDCs) plus the
the Possible Negative Effects of the Re- following developing-country WTO Members which notified their request to
form Programme on Least Developed
the WTO to be listed and have submitted relevant statistical data concerning
and Net Food-Importing Developing
their status as net-importers of basic foodstuffs during a representative period:
Countries”, which is also referred to as
the NFIDC Decision. While recogniz- Barbados, Botswana, Côte d'Ivoire, Cuba, Dominica, Dominican Republic,
ing that the implementation of the Egypt, Gabon, Honduras, Jamaica, Jordan, Kenya, Mauritius, Mongolia,
results of the Uruguay Round as a Morocco, Namibia, Pakistan, Peru, Saint Kitts and Nevis, Saint Lucia, Saint
whole would benefit all participants, Vincent and the Grenadines, Senegal, Sri Lanka, Trinidad and Tobago, Tunisia
the NFIDC Decision also recognizes and Venezuela.
that during the reform programme

Trade Insight Vol.7, No.1, 2011 35


understanding the WTO

vided for within the framework of the projects linked to improving ag- country) in order to promote local
NFIDC Decision. The role of the WTO riculture productivity and related agriculture development, strengthen
Committee on Agriculture is to moni- infrastructure, and which needed regional and local markets and en-
tor, as appropriate, the follow-up to to be over and above the regular hance the longer-term food security of
the NFIDC Decision. Accordingly, the bilateral and multilateral contribu- recipient countries.
Committee undertakes this exercise tion of donors in this area. In June 2004, FAC members under-
annually at its regular November took a renegotiation of the 1999 Con-
meeting on the basis, inter alia, of noti- Informal discussions were held vention “to strengthen its capacity to
fications submitted by Members relat- subsequently among members of meet identified needs when food aid
ing to actions taken within the frame- relevant international and intergov- is the appropriate response”. How-
work of the Decision in areas such as ernmental organizations, including ever, the Committee decided that this
food aid and technical and financial the World Bank, IMF, and FAO during would need to await the outcome of
assistance under the aid programmes. which some developed countries said the trade-related food aid issues being
International intergovernmental orga- that they were willing to continue to addressed in the WTO Doha agricul-
nizations represented in the Commit- discuss the issue, but that until then ture negotiations. Therefore, in the
tee such as the Food and Agriculture they were not convinced that a new meantime, members agreed to extend
Organization (FAO) of the United Na- fund was suitable. They argued that the existing Convention, most recently
tions, the United Nations World Food finance should continue to be handled with effect from 1 July 2009. They also
Programme, the International Grains in existing Bretton Woods institutions, arranged to discuss informally what
Council/Food Aid Convention, the and the WTO, as a rules-based organi- might be the guiding objectives under
International Monetary Fund (IMF) zation, should not become involved in a possible new convention and how
and the World Bank also contribute to managing funds. the effectiveness of the current Con-
this monitoring exercise. Supporting the call for proposal to vention could be improved.
On 15 December 2000, the WTO establish a revolving fund, the United The sharp rise in world food prices
General Council instructed the WTO Nations Conference on Trade and and ocean freight rates in 2007 and
Committee on Agriculture to examine Development (UNCTAD) emphasized 2008 prompted several members to
problems that food-importing devel- the need to set up such a fund for increase their funding for food aid
oping countries could face as a result the purpose of providing technical operations, bearing in mind their
of the AoA, and more specifically, to and financial assistance to LDCs and minimum commitments under the
examine possible means of improving NFIDCs. The fund has not material- FAC. Actual food aid operations
the effectiveness of the implementa- ized, however. Emphasis has rather by donors in 2007/08 amounted to
tion of the NFIDC Decision. Three been placed on the food aid aspect. 7.1 million tons (wheat equivalent),
issues that were identified as hav- The Food Aid Convention (FAC), which increased to 7.5 million tons in
ing emerged from the discussions which was first put in place in 1967, 2008/09.
that followed were: a proposed food and was renewed a number of times In sum, concerns regarding the
security fund, food aid, and technical thereafter, was opened for renego- possible negative effects of the agricul-
and financial assistance for improving tiation in 1997 keeping in view the ture reform programmes on LDCs and
agriculture productivity and infra- recommendations adopted by the NFIDCs were taken into account dur-
structure. Singapore Ministerial of the WTO in ing the Uruguay Round of multilateral
In this context, on 25 April 2001, a December 1996 in respect of LDCs trade negotiations, resulting in the
group of 16 developing-country Mem- and NFIDCs, and the Declaration on adoption of a separate decision to ad-
bers of the WTO submitted a proposal World Food Security and the Plan of dress those concerns. The implementa-
which called for, inter alia, the estab- Action adopted by the Rome World tion of the decision, however, has not
lishment of an Inter-Agency Revolving Food Summit in the same year. The been satisfactory. More emphasis has
Fund with two components: renegotiation was completed in April been placed on meeting the short-term
1999 and the new FAC was brought food security needs through food
• The variable component, compris- into force with effect from 1 July 1999. aid rather than providing adequate
ing existing and/or new financing One of the most important aspects financial and technical assistance to
facilities as appropriate, to ensure of the FAC 1999 is its urge to donors improve agriculture productivity and
that adequate financing at conces- to use their cash contributions for infrastructure, which is essential for
sional terms is made available to “triangular transactions” (purchasing sustainable agriculture, and hence
NFIDCs and LDCs in times of high food from developing countries for sustained food security. „
world market prices. supply to a recipient country) or for Adapted from: www.wto.org, www.un.org,
• The fixed component, to provide “local purchases” (purchasing food in www.fao.org, www.foodaidconvention.org,
technical and financial assistance one part of a developing country for New Straits Times, 09.11.90 (accessed from
to LDCs and NFIDCs for specific supply to a deficit area in the same news.google.com)

36 Trade Insight Vol.7, No.1, 2011


book review

Climate Change and


Food Security in South Asia
Title: Climate Change and Food Security in South Asia
Editors: Rattan Lal, Mannava V.K. Sivakumar, S.M.A. Faiz, A.H.M. Mustafizur
Rahman and Khandakar R. Islam
Published by: Springer
ISBN: 978-9048195152

T he sudden increase in global food


prices during 2007–2008 dispro-
portionately hurt developing countries
Rattan Lal explores the relation-
ship between climate change and
human wellbeing in South Asia. He
and all the four dimensions of food
security—availability, accessibility,
stability and utilization. Growing
and pushed millions of people below argues that rising population and ac- support for the production of biofuels
the poverty line. One of the reasons celeration of economic development such as ethanol and biodiesel from
cited for the increase in food prices are abetting deforestation, land use crops has added another dimension to
in 2007–2008, and this year as well, is conversion and biomass burning, fos- the factors influencing food security.
shifting climatic patterns that affect sil fuel combustion, and exploitation M. Ad Spijkers looks at the impli-
global agriculture production. of natural resources. These human- cations of climate change for agricul-
Against this backdrop, Rattan Lal induced changes in the environment ture and food security in South Asia.
and his colleagues compiled papers and climate do not bode well for the He argues that despite increases in
presented at an international sym- residents of the region. He recom- total food production, dietary en-
posium “Climate Change and Food mends climate change adaptation ergy consumption has not improved
Security in South Asia” that was held strategies that include a judicious use enough. He stresses location-specific
from 25–29 August 2008 in Dhaka and of land and widespread adoption of technologies and good practices to
edited them to be included in a book appropriate oil/water/crop/vegeta- be built upon an improved under-
titled the same as the symposium. tion management practices. standing of the links between climate
A range of authors from different Similarly, Mannava V.K. Sivaku- change and food provision.
backgrounds, academic professions mar and Robert Stefanski explore the Nabansu Chattopadhyay discusses
and experiences in policymaking have impact of increasing temperatures, the trends of different weather param-
contributed their analyses to make the precipitation variability and water eters during the last few decades over
book a rich source of information on resources, increased frequency of the Indian region and the linkage of
issues pertinent to climate change and extreme events and natural disasters, weather with the Indian agriculture
food security in the subcontinent. decreasing crop, pasture and forest sector. He argues that under chang-
South Asia has diverse climate and productivity, increasing crop pests ing climate, food security in India
terrains. About 75 percent of the poor and diseases, and rise of sea level. might come under threat as it will
and malnourished people live in rural While some authors discuss the affect agricultural yield directly due to
areas and are dependent on subsis- impact of glaciers melting in the alterations in temperature and rainfall,
tence and small-scale agriculture. Himalayas and the ways to model changes in soil quality, and pests and
Climate change is a major concern in them, others have explored the impact diseases. It is essential to design prop-
this region because of alterations in of climate change on water flows and er mitigation and adaptation strate-
temperature and precipitation, rise of storage changes using satellites, and gies because nearly 700 million rural
sea level, melting of the Himalayan geophysical causes of present-day sea- people in India depend on climate-
glaciers, and degradation of natural level rise. sensitive sectors (agriculture, forests
resources and the environment. These The most interesting section is on and fisheries), and natural resources
and other crosscutting issues such the impact of climate change on food for their subsistence and livelihood.
as the impact of climate change on security—the central theme of the The book is a good primer on the
water resources distribution, environ- book. Ramasamy Selvaraju examines state of food security in South Asia,
ment changes, soil degradation, food the state of world food security and the impacts of climate change and
security, migration and adaptation the challenges of climate change and the ways to adopt a range of feasible
options, and agriculture are explored bioenergy. Climate change could mitigation and adaptation frameworks
in the book. influence the entire food supply chain at national and regional levels. „

Trade Insight Vol.7, No.1, 2011 37


network news

Standard setting on WTO Deputy DG


bioenergy speaks on South
Asian trade issues
ON 14 February, SAWTEE orga-
nized an event titled “Emerging
potentials of international trade
for South Asia” in Kathmandu.
The guest speaker was Depu-
ty Director General of the World
Trade Organization (WTO), Dr.
Harsha Vardhana Singh. The
panelists included Dr. Yubaraj
Khatiwada, Governor of Nepal
Rastra Bank, Dr. Posh Raj Pandey,
SWEDISH Standards Institute (SIS) Indonesia, Laos, Nepal, Pakistan, Sri Executive Chairman, SAWTEE,
and SAWTEE have initiated a collabo- Lanka, and Viet Nam. One important and Mr. Ratnakar Adhikari, Gen-
ration with the Swedish International purpose of the project is to attain an eral Secretary, SAWTEE.
Development Cooperation Agency international standard on bioenergy They highlighted issues perti-
(SIDA) to build capacity of stakehold- that does not cause new trade barriers nent to emerging potentials of in-
ers in the setting of new international for developing countries but instead ternational trade for South Asian
standard on bioenergy. The major creates new trade opportunities in least-developed countries (LDCs)
aim is to involve a broad spectrum international markets. and the supply-side constraints
of stakeholders from select develop- As part of the project, a regional faced by them in boosting their
ing countries in South and Southeast workshop on “Strengthening Insti- export capacity and exports. They
Asia in the development of the new tutional Capacity on Sustainability also argued that the international
ISO 13065 standard—Sustainability Criteria for Bioenergy” was held on community should not only pro-
Criteria for Bioenergy. 19–21 April 2011 in Kathmandu. More vide market access, but also help
The project involves eight coun- than 50 participants from the project LDCs address their supply-side
tries from South and Southeast Asia, countries participated in the work- constraints. „
namely, Bangladesh, Cambodia, shop. „

Consultations on poverty in Sri Lanka


THE Institute of Policy Studies of Sri by Prof. Rehman Sobhan on operation- discuss with policymakers, govern-
Lanka (IPS) organized two Consulta- alizing policy recommendations origi- ment operational agencies and non-
tive Meetings on “Promoting Agrarian nating from the study on “Challenging governmental organizations about
Reforms in Sri Lanka” and “Budgetary the Injustice of Poverty: Agendas for their willingness to initiate the pilot
Policies for Poverty Eradication in Sri Inclusive Development in South Asia”. projects.
Lanka” on 7 and 8 April 2011, respec- The proposed work programme Two major objectives of the con-
tively, in Colombo. aims to identify specific policies, sultative meetings in Sri Lanka were
The two seminars were conducted projects and programmes for poverty to explore the scope for establishing a
by Prof. Rehman Sobhan, Chairman, eradication in South Asia, which can Commission/Committee on Agrar-
Centre for Policy Dialogue, Dhaka. Dr. be taken up as pilot projects or de- ian Reforms and a high-powered civil
Saman Kelegama, Executive Director, signed as full-fledged policy propos- society/government/academia-based
IPS, and Prof. W.D. Lakshman, Chair- als/programmes in each South Asian Task Force to prepare an Annual
man, IPS, chaired the two meetings, country. Report on the state of poverty eradica-
respectively. It also aims to identify poten- tion and the outcome and coverage
The meetings in Sri Lanka were a tial agents to implement pilot pro- of various programmes and policies
part of the proposed work programme grammes and policy proposals and to targeted to serve the excluded. „

38 Trade Insight Vol.7,


Vol.6, No.1,
No.2, 2011
2010
Civil society forum at UNLDC IV
CONSUMER Unity & Trust Society Programme, who presented a com- include national commitment and
(CUTS) organized a panel discus- prehensive analysis of the implemen- ownership, international partnerships,
sion at the Civil Society Forum at the tation of the Brussels Programme of and inclusive and coordinated process
Fourth United Nations Conference on Action that had been adopted at the at the national, regional and inter-
the Least-Developed Countries (UN- UNLDC III held in Brussels in 2001. national levels. Ogalo presented the
LDC IV) in Istanbul in collaboration Jones said the last decade saw some main recommendations of an African
with the Commonwealth Secretariat. progress but with every step forward CSO Forum organized by CUTS in
The theme was “From Istanbul to there was a step sideways as the inter- Arusha, Tanzania in November 2010
2020: Vision for LDCs”. national community did not deliver on to provide African CSO inputs to the
Chairing the event held on 11 May, all its promises to assist the LDCs. UNLDC IV.
Cyrus Rustomjee, Director, Economic This view was echoed by other Love Mtesa, former ambassador
Affairs Division, the Commonwealth speakers, including Victor Ogalo of of Zambia to the WTO and Adviser
Secretariat, likened LDCs’ pursuit of CUTS Africa Centre, Nairobi and CUTS Africa Resource Centre, Lusaka
meaningful integration into the global Rashid S. Kaukab of CUTS Ge- also spoke on the occasion. His was
economy as running faster and faster neva Resource Centre. According to a message of hope and confidence.
without getting there—a situation Kaukab, the next decade will present He asserted that LDCs can turn their
which must change. many challenges as well as oppor- disadvantages into opportunities with
Speakers at the event included Em- tunities. LDCs’ vision for inclusive assistance from the international com-
ily Jones of Oxford Global Governance and sustainable development should munity. „

Evaluating development
Launch of Trade,
effectiveness of Aid for Trade Climate Change
and Food Security
Programme
ON 23 February, SAWTEE
organized an event to launch its
programme on “Trade, Climate
Change and Food Security in
South Asia”. The programme aims
to make trade and climate change
negotiations and outcomes fair,
inclusive, equitable and mutu-
ally supportive for ensuring food
security in South Asia through
research, advocacy, capacity
building, networking and alli-
SAWTEE and the International Centre The study is part of a global project ance building. Representatives
for Trade and Sustainable Develop- initiated by SAWTEE and ICTSD, in from SAWTEE member institu-
ment (ICTSD) organized “Dissemi- collaboration with several other orga- tions as well as a cross-section of
nation Meeting of the Research on nizations, in six countries in Africa, stakeholders in the areas of trade,
Evaluating Development Effectiveness Asia and Latin America/Caribbean. climate change and food secu-
of Aid for Trade” in Kathmandu on 2 After SAWTEE and ICTSD developed rity from the South Asia region
May 2011. a methodological framework for participated in the event. The pro-
The event was organized to dis- conducting research in six countries, gramme is supported by Oxfam
seminate a draft report on the effec- SAWTEE conducted the research in Novib, the Netherlands. „
tiveness of Aid for Trade in Nepal. Nepal. „
Policy Brief: Responding to Climate
Vulnerabilities through Carbon Trade
Author: Bishal Thapa
Publisher: SAWTEE

Civil Society Statement on Food Security II


Adopted in Kathmandu on
25 February 2011

South Asia Watch on Trade,


Economics and Environment
(SAWTEE) is a regional network
that operates through its secre-
tariat in Kathmandu and member
institutions from five South Asian
countries, namely Bangladesh,
India, Nepal, Pakistan and Sri
Lanka. The overall objective of
SAWTEE is to build the capac-
Issue Paper: Productive Capacity Develop- ity of concerned stakeholders
ment for Structural Transformation of LDCs in South Asia in the context of
Author: Dr. Mohammad A. Razzaque
liberalization and globalization.
Publisher: SAWTEE

www.sawtee.org