ASEAN KEY DESTINATIONS
Curbs on Indonesia's exports bring concern
As World Trade Organization (WTO) members stoke efforts for a new trade agreement, soaring food and raw material prices have raised a question of export restrictions.
While WTO members haggle over the extent to which tariffs come down, countries spooked by the memory of the 2008 food crisis that sparked riots around the globe are slashing import duties to let food come in as cheaply as possible.
Food inflation was one of the hot topics at the meeting of the World Economic Forum in Davos. French President Nicolas Sarkozy, who currently chairs the G-20, called for more regulation to curb speculation and volatility.
Just as in 2008, trading partners have asked whether one is allowed to halt exports without regard to the rest of the world. But the rules-based trading system built up since World War II and umpired by the WTO concentrates primarily on removing barriers to imports.
Trade officials say there is no reason why exports cannot be regulated in the same way as imports. Barriers to exports would be illegal, but countries would have safeguards - a safety valve allowing them to block exports temporarily to ensure vital food supplies at home.
During the 2008 crisis, Japan proposed introducing some tentative rules along those lines, but developing country food exporters shot down the idea.
Now it is time to look at the question again, said Anabel Gonzalez, foreign trade minister of Costa Rica - a small, developing country that exports tropical products like bananas, pineapples and coffee but relies on imports for staples such as wheat and soybeans.
"This is a pending issue for a future agenda that certainly needs to come into play," Gonzalez said. "All of the provisions of the WTO are more concerned with imports. Whatever you have on export restrictions is very limited."
Indonesian Trade Minister Mari Elka Pangestu agrees. The archipelago is a major commodity producer, but as well as growing rice, it imports the staple to ensure steady food supplies and keep prices down.
Indonesia is one of the promoters of the special safeguard mechanism - an instrument that would allow developing nations to raise tariffs temporarily to block a flood of food imports that could hurt their local farmers.
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