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News Details:
Headline : Switzerland : DDG Wolff highlights role of WTO in facilitating agri-food chains
Summary : The WTOs rules-based framework benefits farmers and other participants in nascent and developing agri-food value chains by facilitating their daily operations and encouraging regulatory cooperation among governments, WTO Deputy Director-General Alan Wolff told the G-20 Agricultural Summit in Niigata, Japan on 11 May. All stakeholders in agri-food value chains, and all countries at every stage of economic development, stand to benefit from fully participating in a strengthened and dynamic multilateral trading system, he said. This is what he said:

I would like to thank the Government of Japan for hosting this meeting, and for the excellent facilities and arrangements offered to make our meetings and our stay in Niigata fruitful and enjoyable.

Technological advances have fundamentally transformed the interactions within domestic and international agri-food value chains. Of particular relevance to our discussion today are the main results of a recent report on Global Value Chain Development. Its findings were discussed on 13 April at a special event during the 2019 Spring Meetings of the IMF and World Bank Group.

The Global Value Chain Development Report 2019
Many of the findings of the Report, co-published by the WTO, the World Bank Group, OECD, the Institute of Developing Economies (IDE-JETRO), the Research Center of Global Value Chains of the University of International Business and Economics, and the China Development Research Foundation can apply and should be applied to agriculture trade:

The Report underscores the continued evolution of global value chains (GVCs) in the last two decades and their critical role in opening new markets for countries, sectors and firms, notably by reducing trade barriers and lowering costs. GVCs play a major positive role in the world economy. There are very substantia direct economic benefits.

Empirical research has shown that trade has not been a significant factor in the loss of manufacturing jobs in developed economies and has generated employment and increased incomes in developing economies. As production processes have evolved under global value chains, job gains have been recorded in the services sector. This is crucially important for agri-food value chains (FVCs), demonstrating broad gains in both developed and developing economies.

The Report does recognize that GVCs can cause structural changes which vary considerably across regions, countries and individuals with different skill levels, particularly in developed countries. The Report therefore underscores the need for governments to design and implement adjustment policies to ensure that economic gains, which outweigh the costs, are spread more evenly. The Report concludes that on-going digital transformation provides significant scope to boost global growth, and indeed trade, especially for small and medium enterprises (SMEs).

Innovation, digital connectivity, Information Communications and Technology (ICT)
The WTO has underscored the importance of ICT in helping developing countries to enhance digital connectivity. In December 2015, at the WTO Ministerial Conference in Nairobi, the scope of the Information Technology Agreement (ITA) was expanded to include a further 201 high-tech products. ITA benefits are extended to the entire WTO membership.

With the benefits of greater availability of ITC products and services, FVC (food value chain)/GVC stakeholders are increasingly able to rely on real time access to data to inform their planting, processing, marketing, distribution and investment decisions. Enhancing investments in digital connectivity, electronic logistical support mechanisms and ICT-powered information systems can generate new efficiencies within FVCs/GVCs, particularly in agri-food industries, which are data-intensive, exposed to risks (e.g., weather vagaries, price volatility, food safety, etc.) and highly dependent on the services sector.

Examples of benefits to stakeholders in the value chains include the following:

Traceability enhances food safety. Finding a problem earlier can reduce health risks, reduce supply disruptions, reduce costs (sometimes very dramatically) to producers and distributors, and reduce waste;
Producers, including small holders, can become closer to consumers, delivering fresher products more quickly, with improved consumer choice and experience as well as enhanced economic returns to producers. This is particularly important to those with relatively limited incomes;
Greater access to real time market and policy information on prices will promote enhanced regulatory compliance at every stage of the supply chain (safety and quality standards, financial requirements, customs procedures, etc.), encouraging the inclusion of smaller players, bridging distances and reducing trade costs;
Closer collaboration and coordination among local, regional and international public and private partners and institutions lead to faster integration. Each stakeholder's capacity to anticipate and manage risks builds stronger resilience in the entire agri-food chain;
The adoption of sustainable and "climate-smart" production practices using satellite and earth observation technology, drone-powered crop treatment and monitoring systems as well as modern traceability solutions and risk-management techniques such as blockchain technology and e-certification can generate productivity increases, input cost reductions (fertilizers, pesticides, water), and thus contribute to better farm incomes and positive food security and nutrition outcomes, while being more sustainable and lessening adverse impact on the environment.


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