Agricultural markets and international trade in the context of sustainability objectives

The EU remains a staunch supporter of the multilateral trading system. In spite of its successes, the World Trade Organisation (WTO) is now facing new challenges in light of a rapidly changing world. The WTO can be further modernised, by making its trade agenda closer to citizens and ensuring that trade contributes to the pursuit of broader objectives set by the global community, in particular with regard to sustainability[1]. There are strong, complex and crucial links between trade, financial, economic and social policies, and these also reflect in agriculture. As one of the sectors with the lowest income worldwide, average farm income in the EU28 is only around 40% of average overall income[2]. In Africa, rural areas remain much poorer, although the urban-rural gap has narrowed[3]. The profile of the global poor shows they are predominantly rural, young, poorly educated, and mostly employed in agriculture[4]. Competition on world markets is considered by some to be the cause of poverty as it drives prices down on some sensitive commodity markets. The United Nations (UN) Sustainable Development Goals (SDG) agreed in the framework of Agenda 2030 in 2015 set out a detailed set of actions to be pursued, many of them with strong links to trade. Of particular relevance to agriculture are SDG1 "No poverty" and the closely related SDG2 "Zero Hunger" and SDG3 "Good Health and Well-being". Aspects linked to agricultural practices and standards are also included in several environmental-related SDGs: "Life on Land" (SDG 15), "Clean Water" (SDG 6) and "Climate Action" (SDG 13). Global commitments should prompt the adoption of measures attentive to the social and environmental impact of trade in agriculture. In a globalised food system[5], the impact of these measures in one part of the world may be offset by slower progress in other parts, which would benefit from lower costs and increased competitiveness in the meantime. Consequently, a detailed analysis of the SDG targets related to the agriculture sector, and the corresponding environmental issues, should be undertaken and options through which trade policy can contribute to achieving the SDGs should be identified.

Scope

Proposals will analyse and further develop robust methods and related indicators to assess the impacts (positive and negative) of agricultural international trade on the environment and society. It will include analysis of options through which trade policies can contribute to achieving the SDGs and implementing climate and biodiversity agreements while securing the achievement of EU objectives regarding a fair standard of living for farmers and poverty eradication, which remains the primary objective of development policy under the new European Consensus[6]. Work will look in particular to relevant supply chains in the agriculture sector involved both in import and export for the European Union in relation to its major agricultural trading partners. In addition, a contrasting analysis from the African continent perspective - the world’s poorest continent (Sub-Saharan Africa was hosting more than half the world’s poor in 2013) – could be proposed[7]. Environmental impacts as carbon leakage[8] and other concepts will be analysed regarding agricultural trade. Activities will build upon previous studies[9] including the work done on the impact of EU consumption on deforestation[10] and related to the target 6 of the EU Biodiversity Strategy (action 17b)[11] regarding the enhanced contribution of trade policy to conserving biodiversity, ecosystems and ecosystem services. Projects will design transition paths in order to develop trade relations in sustainable and fair ways and as “equals” (SOTEU2018) while considering the role that labour plays in overall production cost and the impact of the internalisation of environmental costs on the competitiveness of agricultural productions.

The Commission considers that proposals requesting a contribution from the EU of 4 million EUR would allow this specific challenge to be addressed appropriately. Nonetheless, this does not preclude submission and selection of proposals requesting other amounts.

Expected Impact

• More evidence-based policies and improved civil society dialogue building on improved data, analysis, and methods;
• Improved coherence between EU policies (Agriculture, Environment, Trade, Climate, Food security, Development…);
• Best practices and policies for multilateral trade contributing to the Sustainable Development Goals and global agreements on environmental and climate challenges.

Cross-cutting Priorities

Socio-economic science and humanities
International cooperation

[1]http://trade.ec.europa.eu/doclib/docs/2018/september/tradoc_157331.pdf

[2]Facts and figures on EU agriculture and the CAP, Statistical annex: Agricultural and farm income

[3]https://www.un.org/africarenewal/sites/www.un.org.africarenewal/files/Poverty%20in%20a%20Rising%20Africa%20Overview.pdf

[4]Poverty and shared prosperity 2016 – Taking on inequality – World Bank Group https://openknowledge.worldbank.org/bitstream/handle/10986/25078/9781464809583.pdf

[5]Nearly one third of global arable land use is connected to international trade https://wad.jrc.ec.europa.eu/sites/default/files/atlas_pdf/2_WAD_GlobalPatternsOfHumanDomination.pdf

[6]https://ec.europa.eu/europeaid/policies/european-development-policy/european-consensus-development_en

[7]In relation to the Task Force Rural Africa – strengthening our partnership in food and farming

[8]Carbon leakage refers to the situation that may occur if, for reasons of costs related to climate policies, businesses were to transfer production to other countries with laxer emission constraints. This could lead to an increase in their total emissions.

[9]https://ec.europa.eu/agriculture/trade-analysis/impact-assessment_en

[10]http://ec.europa.eu/environment/forests/pdf/3.%20eport%20policies%20pro…

[11]https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52011DC0244&from=EN