Do WTO Commitments Restrict the Policy Space of Countries Wishing to Provide Food Security Through Stockholding Programs?

Abstract

The use of administered prices to acquire public stockholdings for food security purposes has become contentious among WTO members. G-33 countries have proposed that existing limits be lifted while other WTO members have not acquiesced. This impasse has threatened the success of WTO Ministerial Meetings in both Bali and Nairobi. Currently, a Peace Clause pertaining to cases being brought to the disputes settlement system has been agreed while members seek a permanent solution. The debate over public stockholdings, however, is being conducted with limited information – in particular whether the WTO de minimis limits restrict the policy space for developing countries pursuing food security goals. This article examines the restrictiveness of the limits on G-33 countries. Using conservative assumptions, it finds that for high food security risk G-33 countries the current de minimis levels are constraining. They are less constraining on medium and low food security risk countries. As a result, the policy space for some developing countries is restricted. The results also suggest that the current ‘one size fits all’ limits may not be appropriate and could be replaced by a flexible system.