Lamy Muses on Free Trade and Food Security

Observers of the goings-on in the arena for international trade sometimes carry different views about the reason for the failure to complete the Doha Round. To my mind though, it is clear that one of the reasons that I discount is the claim that the WTO has not had truly capable leadership. In many respects, Pascal Lamy and his colleagues in Geneva are faced with the political problems that depress the possibility for substantial freeing of trade. 

One sees further evidence of the thought leadership and clear understanding of the fine but clear distinctions between the political and economic barriers to liberalization among countries. Addressing a policy audience during the Economist Conference early this month, Pascal Lamy ably dissects the issue of food security and the potential of trade to ease price shocks and shortages. The most poignant points in my mind is that very little food is traded across borders to begin with and further that governments are wont to respond to shocks by cutting off the movement of food across borders and thereby exacerbating that problem of supply and prices. Having observed that most food exports come from a ridiculously small number of countries, he unequivocally states that international trade in food is necessary to diversify sources by increasing competition and ensuring that supply comes from the most efficient producers. 

This is a very succinct summary of the state of agriculture products in world trade and good primer for introducing thinking around the benefits of trade. There is an obvious paradox that while the vast majority of the world's households derive livelihoods from agriculture, the proportion of their production that is traded stands at 7%. It cannot be difficult to figure out that the reason is the absence of free trade around agriculture. An old profession that is yet to be substantially freed from political encumbrances.