Speech to the Food Security Ministers’ Meeting, 27 September 2016

Intervention by Tony Nowell on Market Access, Trade and Investment Facilitation 

Ministers, Heads of Delegation

I am honoured to have been asked to speak to you today about market access, trade and investment facilitation. In the Dialogue with CEOs yesterday I drew your attention to the letter which the APEC Business Advisory Council has written on food security issues, which highlights the value of trade liberalisation as a key means of addressing food security.

As I said yesterday, without food security, opportunities will go unrealised, human capital will be lost and economic growth will be muted, or even negative.

In a food-insecure environment, the challenges of deepening the integration of our economies become even more daunting. Trade helps to match up supply and demand. Imports of food can play a vital role in complementing domestic food production and manufacturing.

Food imports allow economies to direct their energies and resources to the areas of greatest benefit overall, rather than striving at huge cost for self-sufficiency, while also ensuring that their populations have access to an adequate supply of safe, sustainable and nutritious food.

As we heard clearly yesterday, investment follows trade – strong trade relationships and open, transparent markets give rise to foreign investment which further enhances food supply.

Barriers that limit or prevent trade and investment flows clearly have a negative impact on food security. As your draft Ministerial declaration notes, some good progress has been made in progressively lowering tariffs around the region, but high tariffs and tightly-constrained tariff quotas remain for food products.

The private sector is telling us that “non-tariff barriers” to food trade are increasingly prominent and can limit or prevent flows of food as effectively as tariffs.  We heard a number of examples yesterday of trade barriers, which can make it too costly or too difficult to import, or can create uncertainty in a way that serves to discourage exports and investment in the food sector.

This raises prices and lessens the availability of food for consumers and domestic food processing industries. It closes off opportunities for domestic food manufacturers to take part in global value chains.

And trade-distorting policies, both market access barriers and production-distorting subsidies, can exacerbate price volatility, make price spikes higher, and cause the ripples of those economic shocks to radiate throughout the economies of the developing world.

It should go without saying, but in fact needs to be said more often: all of that works directly against food security, not in support of it.

Ministers, Heads of Delegation, We are meeting at a time of widespread anxiety about trade and globalisation. Merchandise trade growth last year hit its lowest level since the global financial crisis. Both The World Bank and the WTO have highlighted the downside risks of rising protectionism, particularly in the form of non-tariff barriers, to the already sluggish global economic growth outlook.

But big trade initiatives, such as TPP or TTIP or RCEP – are not only proving difficult to complete or ratify, they are also are running into unprecedented public opposition. The environment for trade liberalisation has become even more challenging than before.

That is not helpful for food security. What is needed now, above all, is leadership, both from governments and from the private sector.

Such leadership is required across the sectors, but it applies especially to food. It is clear we must do more to explain to the public how trade benefits people. And governments need to think more deeply about the policies that must accompany expanded trade and investment to ensure that the benefits of trade are widely shared.

But this should not be a pretext for delaying further market opening – we urge you to continue to ratify and implement the trade agreements our economies have concluded and to negotiate new trade agreements.

These agreements need to be high quality, comprehensive and ambitious.

They need to facilitate the sort of enabling environment that we talked about yesterday in relation to technology, innovation and the promotion and protection of investment.

They need to incorporate ground-breaking provisions to ensure that trade and sustainability go in hand. Your draft declaration rightly encourages economies to “address relevant measures including non-tariff measures and non-tariff barriers”.

These same words were first included in the Niigata Declaration issued back in 2010 – the challenge is even more pressing six years later. As you know ABAC has commissioned from the USC Marshall School some potentially very rich and helpful research on non-tariff barriers to food. The final report will not be released until November and we look forward to discussing it further with your governments.

As well as opening new doors for trade, we should also be encouraging businesses to go through them.

This can be assisted by a raft of trade and investment facilitation and other measures to enhance supply chain connectivity, integrity and security, which are well supported by ABAC and the business community.

Ministers, Heads of Delegation,

I would like to leave you with three overarching messages for this session:

First, the private sector has a critical contribution to make to food security.

We are deeply grateful for the opportunity given to us yesterday to dialogue with you on these issues and we hope this dialogue may be continued.

Second, food trade and investment are vital components of a food-secure APEC region, and we need to take concrete steps to achieve that, even when it is politically challenging.

And finally, 2020, the target date for achieving food security is getting closer all the time.

We cannot put off the action that is required to liberalise trade, to promote and protect investment and to put in the place the sort of enabling environment that fosters innovation and enhances sustainability.

Ministers, Heads of Delegation. the time to act is now.

[1]  WTO, World Trade Report 2012, and World Bank, Global Economic Prospects June 2016, pg 34 https://openknowledge.worldbank.org/bitstream/handle/10986/24319/9781464807770.pdf?sequence=6

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