Thailand: Action urged on export ban

Thailand is joining 53 member countries to propose the World Trade Organization (WTO) address export bans on food and agricultural products after members who are net food importers raised concerns about food shortages based on the pandemic and the Russia-Ukraine war.

According to Trade Negotiations Department director-general Auramon Supthaweethum, many countries have imposed restrictions on food and agricultural product exports that have adversely affected net food importers.

The chief negotiator said 53 countries including Australia, New Zealand, the EU states, Japan, Norway, South Korea, Saudi Arabia, Brazil, Chile, Bangladesh, Brunei, Laos, Singapore, Vietnam and Thailand have agreed to submit proposals at the 12th Ministerial Conference (MC-12) of the WTO during June 12-15 in Geneva, Switzerland.

They are asking the WTO, which has 164 members, to help tackle export bans on food, particularly those related to the UN World Food Programme.

“Thailand, as a developing country, hopes the WTO can help solve such trade restrictions,” said Mrs Auramon.

The MC-12 is scheduled to discuss trade and health issues affected by the pandemic that have triggered a scarcity of food supply, access to essential medicines and vaccines to cope with the pandemic, and the reduction of fisheries subsidies that contribute to overcapacity and overfishing. The meeting will consider the restriction and reduction of agricultural subsidies as well as solutions for the agricultural export bans, she said.

Pimchanok Pitfield, ambassador and permanent Thai representative to the WTO, revealed the group’s latest report, “The Crisis in Ukraine: Implications of the War for Global Trade and Development”, which projected global economic growth of 3.1-3.7% this year, a decrease of 0.7-1.3 percentage points because of the Russian invasion of Ukraine.

The prolonged conflict may cause polarisation of production and trade based on geopolitical factors to create self-sufficiency, reducing global competition and innovation. This would result in the global economy shrinking by up to 5% from the base case, she said.

According to the WTO study, although Russia and Ukraine are small in terms of economic size and global trade, both countries play important roles in certain sectors of production and are exporters of many important commodities. The war caused global market prices to rise, especially agricultural and food commodities such as wheat, soybeans, rice, corn, barley, oats, meat and even beer, all of which affected food security in poor countries that rely on imports from Russia and Ukraine.

In addition, the war increased the prices of energy products and raw materials such as oil and fertiliser, which indirectly affects food prices in the world market, found the WTO. The study found products that are subject to shortages and bottlenecks in production are those related to sunflower, palladium, wheat and fertilisers, as Russia and Ukraine comprise a high proportion of output and there are few substitute production countries.

Russia and Ukraine together account for 45% and 25% of global sunflower and wheat product exports, respectively. Given the countries combined share of the palladium market, the palladium and rhodium shortage may extend to the automotive and semiconductor industries.