Appropriate trade policy reform can lead to poverty reduction

The Committee on Commodity Problems, an intergovernmental Committee of the UN Food and Agriculture Organization, opened a three-day meeting to review recent agricultural commodity market developments and policy issues.


New factors affecting commodity prices

Many agricultural commodity prices have increased recently, but while this is mainly the result of market fundamentals FAO warns that a number of new factors affecting commodity prices have become increasingly apparent. Among these are the impact of the rapid economic growth of China and India and the effect of crude oil prices on those agricultural products that can be used to produce biofuels.

According to FAO, despite the recent increases in commodity prices the long-term trend is still downward and short-term fluctuations are still significant.


Trade talks could have positive effect

The Committee will also review recent trade policy developments, particularly the resumption of the Doha Development Round of the World Trade Organization (WTO) negotiations. FAO highlighted the need in the Doha Round “to put in place effective instruments to allay the fears of some developing countries that they might suffer as a result of further global trade liberalization.”

FAO’s Deputy Director-General David Harcharik said in opening remarks: “Trade policy reform aimed at providing a fair, market-oriented, global trading system and at reducing trade-distorting subsidies and trade barriers can make a positive contribution to trade and development and the reduction of poverty and hunger. The UN Millennium Declaration committed to an open, equitable, rule-based, predictable and non-discriminatory trading system, and multilateral trade negotiations provide the most promising route to achieve this.”


Trade policy reform is no panacea for poor countries

However, FAO warned in a recent report that trade policy reform is not a panacea, and the gains from freer trade will not be evenly distributed either between developing countries or within individual countries.

The Committee will examine the latest position in the WTO Doha trade negotiations and study a range of topical issues – notably special products, special safeguards and aid for trade.