Democratic Republic of Congo

Forced labor and trade — U.S. Congress passes legislation to address China’s treatment of Uyghurs

· December 19, 2021 · forced labor of Uyghurs and other minorities · , , , , , , , , · No Comments

In prior posts I have reviewed how concerns over perceived human rights abuses (particularly forced labor) have trade implications. See, e.g., April 27, 2021:  WTO and forced labor in cotton — Commentary by Amb. Dennis Shea, former Deputy U.S. Trade Representative, https://currentthoughtsontrade.com/2021/04/27/wto-and-forced-labor-in-cotton-commentary-by-amb-dennis-shea-former-deputy-u-s-trade-representative/; March 24, 2021:  When human rights violations create trade distortions — the case of China’s treatment of the Uyghurs in Xinjiang, https://currentthoughtsontrade.com/2021/03/24/when-human-rights-violations-create-trade-distortions-the-case-of-chinas-treatment-of-the-uyghurs-in-xinjiang/; January 25, 2021:  Child labor and forced labor in cotton production — is there a current WTO mandate to identify and quantify the distortive effects?, https://currentthoughtsontrade.com/2021/01/25/child-labor-and-forced-labor-in-cotton-production-is-there-a-current-wto-mandate-to-identify-and-quantify-the-distortive-effects/; January 24, 2021:  Forced labor and child labor – a continued major distortion in international trade for some products, https://currentthoughtsontrade.com/2021/01/24/forced-labor-and-child-labor-a-continued-major-distortion-in-international-trade-for-some-products/.

There have been a number of reports generated by various groups over the years on the depth of the human rights problems in China’s Xinjiang Uyghur Autonomous Region and the treatment of ethnic minorities — particularly the Uyghurs. See, e.g., Australian Strategic Policy Institute and International Cyber Policy Centre, Uyghurs for sale, ‘Re-education’, forced labour and surveillance beyond Xinjiang (authors Vicky Xiuzhong Xu with Danielle Cave, Dr James Leibold, Kelsey Munro, Nathan Ruser), Policy Brief Report No. 26/2020, https://ad-aspi.s3.ap-southeast-2.amazonaws.com/2021-10/Uyghurs%20for%20sale%2020OCT21.pdf?VersionId=zlRFV8AtLg1ITtRpzBm7ZcfnHKm6Z0Ys.

The U.S. State Department releases an annual report on Human Rights issues in other countries, including China. The 2020 report on China contains the following excerpts relevant to the human rights concerns in the Xinjiang Region and the question of forced labor.

“CHINA 2020 HUMAN RIGHTS REPORT

“EXECUTIVE SUMMARY

“* * *

“Genocide and crimes against humanity occurred during the year against the predominantly Muslim Uyghurs and other ethnic and religious minority groups in Xinjiang. These crimes were continuing and included: the arbitrary imprisonment or other severe deprivation of physical liberty of more than one million civilians; forced sterilization, coerced abortions, and more restrictive application of China’s birth control policies; rape; torture of a large number of those arbitrarily detained; forced labor; and the imposition of draconian restrictions on freedom of religion or belief, freedom of expression, and freedom of movement.

“Significant human rights issues included: arbitrary or unlawful killings by the government; forced disappearances by the government; torture by the government; harsh and life-threatening prison and detention conditions; arbitrary detention by the government, including the mass detention of more than one million Uyghurs and other members of predominantly Muslim minority groups in extrajudicial internment camps and an additional two million subjected to daytime-only ‘re-education’ training; political prisoners; politically motivated reprisal against individuals outside the country; the lack of an independent judiciary and Communist Party control over the judicial and legal system; arbitrary interference with privacy; pervasive and intrusive technical surveillance and monitoring; serious restrictions on free expression, the press, and the internet, including physical attacks on and criminal prosecution of journalists, lawyers, writers, bloggers, dissidents, petitioners, and others as well as their family members, and censorship and site blocking; interference with the rights of peaceful assembly and freedom of association, including overly restrictive laws that apply to foreign and domestic nongovernmental organizations; severe restrictions and suppression of religious freedom; substantial restrictions on freedom of movement; refoulement of asylum seekers to North Korea, where they have a well founded fear of persecution; the inability of citizens to choose their government; restrictions on political participation; serious acts of corruption; forced sterilization and coerced abortions; forced labor and trafficking in persons; severe restrictions on labor rights, including a ban on workers organizing or joining unions of their own choosing; and child labor.

“* * *

“Section 7. Workers’ Rights

“* * *

“b. Prohibition of Forced or Compulsory Labor

“The law prohibits forced and compulsory labor. The law provides a range of penalties depending on the circumstances, including imprisonment, criminal detention, administrative blacklisting, and fines. Penalties were commensurate with those for analogous serious crimes, such as kidnapping. The law was not effectively enforced.

“The PRC used state-sponsored forced labor in detention camps, prisons, and factories in and outside Xinjiang.

“There is evidence of forced labor exacted by the use of force, threats of detention or other abusive practices against workers laboring in the camps, large industrial parks, and residential locations in Xinjiang. There are also reports of individuals ‘graduating’ from ‘vocational training centers’ and then being compelled to work at nearby facilities or sent to factories in other parts of China.

“China’s State Council issued a white paper on employment and labor rights in Xinjiang Uyghur Autonomous Region on September 17, 2020, in which it acknowledged that the Chinese Government has provided ‘vocational training’ to an average of 1.29 million workers in Xinjiang every year from 2014 to 2019.

“Xinjiang government documents indicate the existence of a large-scale PRC government plan, known as the ‘mutual pairing assistance’ program, where 19 cities and provinces, mostly in eastern China, have established factories in Xinjiang. There is significant risk that these factories are using camp labor and other exploitative labor practices.

“Persons detained in internment camps in Xinjiang (see section 6) were subjected to forced labor. The detainees worked in factories producing garments, hair accessories, and electronics and in agricultural production, notably picking and processing cotton and tomatoes. In March an Australian Strategic Policy
report stated the PRC government transferred Uyghur and other ethnic minorities from Xinjiang to technology, clothing, and automotive factories across the country; conditions for many transferred workers strongly suggested forced labor. A New York Times investigation published on April 15 stated some Chinese companies used forced labor to produce personal protective equipment. In December a Center for Global Policy report detailed the PRC’s coercive labor training and transfer schemes that led to forced labor of nearly half a million people in the Xinjiang cotton harvest.

“A December 2020 Jamestown report used evidence from public and nonpublic Chinese government and academic sources indicating that labor transfers of ethnic minorities in Xinjiang to other regions and other provinces are part of a state-run scheme to forcibly uproot them, assimilate them, and reduce their population. Using Chinese government documents, the report estimates that up to 1.6 million transferred laborers are estimated to be at risk of being subjected to forced labor as a result of the government policy that intends to ‘displace’ populations deemed ‘problematic’ by the government.

“Chinese-flagged fishing vessels subjected workers from other countries to forced labor. On August 26, an Indonesian social media outlet posted a video of three Indonesian fisherman pleading for rescue from a PRC-flagged fishing vessel. The fishermen claimed they were subjected to physical violence, forced to work 20-hour days, and not paid for their work.

“Although in 2013 the NPC officially abolished the re-education through labor system, an arbitrary system of administrative detention without judicial review, numerous media outlets and NGOs reported forced labor continued in prisons as well as drug rehabilitation facilities where individuals continued to be detained without judicial process. An August, Epoch Times article stated prison labor was used in apparel, artificial flowers, and cosmetic production in Shenyang, Liaoning. There were reports of forced labor in other provinces in the production of items such as bricks, coal, and electronics.

“Also see the Department of State’s Trafficking in Persons Report at https://www.state.gov/trafficking-in-persons-report/.”

U.S. Department of State, CHINA 2020 HUMAN RIGHTS REPORT, pages 1, 78, 81-82 (March 2021 updated in November), https://www.state.gov/reports/2020-country-reports-on-human-rights-practices/china/.

U.S. law for more than 90 years has banned the importation of goods made with forced labor. The problem of forced labor is not limited to China and the U.S. Customs and Border Protection in recent years has taken action to deny entry to imports from a number of countries of goods suspected of being made with forced labor. See, e.g., Testimony of Jennifer (JJ) Rosenbaum, JD, Executive Director, Global Labor Justice – International Labor Rights Forum, Before the House Committee on Ways and Means Subcommittee on Trade, The Global Challenge of Forced Labor in Supply Chains: Strengthening Enforcement and Protecting Workers, Wednesday July 21, 2021, https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/Witness%203%20Jennifer%20Rosenbaum%20Testimony.pdf (citing various USCBP Withhold Release Orders under Section 307 of the Tariff Act of 1930 on products from Malawi, Democratic Republic of Congo, Turkmenistan, Malaysia as well as China).

With the broader concern about the perceived extreme human rights abuses against the Uyghurs and other ethnic minorities in the Xinjiang Uyghur Autonomous Region and reports of dozens of multinationals apparently “benefitting” from forced labor of Uyghurs, Congress held hearings in 2021 and in December passed legislation directed at improving the enforcement of Section 307 of the Tariff Act of 1930 including creating a presumption of use of forced labor for products coming from Xinjiang Province. See, e.g., Inside U.S. Trade’s World Trade Online, Uyghur Forced Labor Prevention Act heads to Biden’s desk, December 16, 2021, https://insidetrade.com/daily-news/uyghur-forced-labor-prevention-act-heads-biden%E2%80%99s-desk.

The U.S. Trade Representative issued a statement on December 16th about the legislation going to the President.

“This bill represents our country’s commitment to protecting human dignity and leading the fight against forced labor. We have a moral and economic imperative to eliminate this practice from our global supply chains, including those that run through Xinjiang, China, and exploit Uyghurs and other ethnic
and religious minorities.

“This fall in London, the G7 trade ministers released a Joint Statement affirming our belief that there is no place for forced labor in a rules-based multilateral trading system. By passing this bill with strong, bipartisan support, the United States can set an example for the world to follow.

“I am grateful to Congress for its leadership and look forward to continuing this necessary work with our trading partners and allies to ensure every worker is treated with respect and dignity – no matter where they live.”

USTR Press Release, STATEMENT BY AMBASSADOR KATHERINE TAI ON THE PASSAGE OF THE UYGHUR FORCED LABOR PREVENTION ACT, December 16, 2021, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/december/statement-ambassador-katherine-tai-passage-uyghur-forced-labor-prevention-act.

The bill as passed by the House and Senate is enclosed below. It is expected that President Biden will sign the legislation in the coming days.

uyghur-forced-labor-compromise

The legislation consists of six sections. The first is a statement of policy including the strengthening the porhibition against importation of goods made with forced labor, leading international efforts to end forced labor, coordinating with Canada and Mexico implementation of Art. 23.6 of the USMCA prohibiting the importation of goods manufactured with forced labor, working to end human trafficking, regarding the prevention of atrocities as in the U.S. national interest, and addressing gross violations of human rights in the Xinjiang Uyghur Autonomous Region through diplomatic channels, multilateral institutions, by using all authorities available to the U.S. government including visa and financial sanctions, export restrictions and import controls.

Section 2 details a strategy to enforce Section 307 of the Tariff Act of 1930 (prohibiting the importation of goods made through forced labor in Xinjiang). There will be opportunity for public comments, a public hearing and development of a strategy by the Formed Labor Enforcement Task force (established by Sec. 741 of the USMCA Implementation Act) in consultation with the Department of Commerce and the Director of National Intelligence. The strategy will include elements that assess the risk of importing prohibited goods from Xinjiang and procedures to be implemented to reduce the risks, a factual description of various practices in China on forced labor including a list of entities using forced labor or working with the government on forced labor, a list of products made with such labor, a list of entities that exported such goods to the U.S., information on third parties using such goods, a list of high-priority sector (including at a minimum cotton, tomatoes and polysilicon) and other matters including additional resources needed by USCBP to enforce the law and guidance to importers. Within 180 days of enactment of the legislation, the strategy report shall be submitted to the appropriate Congressional Committees. The strategy will be updated annually.

Section 3 creates a rebuttable presumption that imports of goods mined, produced or manufactured in the Xinjiang Uyghur Autonomous Region is produced with forced labor. There are exceptions but CBP needs to submit a report to appropriate Congressional Committees within 30 days after determining an exception applies. The section takes effect 180 days after enactment of the legislation.

Section 4 deals with having a diplomatic strategy to address forced labor in the Xinjiang Uyghur Autonomous Region. The Secretary of State will submit a strategy within 90 days to the appropriate Congressional Committees including plans to enhance bilateral and multilateral coordination among other matters.

Section 5 deals with sanctions relating to forced labor in the Xinjiang Uyghur Autonomous Region. The President is to identify any official of China’s Government who is determined to be responsible for serious human rights abuses in connection with forced labor in the Xinjiang Uyghur Autonomous Region and shall impose sanctions on such individuals.

Section 6 sunsets Sections 3-5 eight years after enactment or when the President determines the Chinese Government has ended the human rights abuses in the Xinjiang Uyghur Autonomous Region, which is earlier.

Comments

Historically, human rights issues have not been viewed through a trade lense. Many human rights abuses are not easily addressed through trade and may have marginal trade effects. That is not true of the issue of forced labor which affects the costs of goods and services where such labor is involved either in an end product or service or in an upstream product or service.

The United States under the Biden Administration is working to address some of the trade distortions flowing from forced labor as can be seen in the ongoing Fisheries Subsidies negotiations. The human rights issues reportedly flowing from treatment of Uyghur and other minorities in the Xinjiang Uyghur Autonomous Region have caused concerns in many countries. Treasury, Commerce, Customs and Border Protection are all taking actions to address trade distortions caused by forced labor whether from China or elsewhere. The legislation sent to the President last week (that will likely be signed by President Biden by the end of the year) is an important step in raising awareness and trying to address the underlying situation in the Xinjiang Uyghur Autonomous Region.

While China is reacting negatively and now has legislative tools to take retaliation (regardless of WTO inconsistency), the U.S. and other countries have to address the human rights problems flagged in the Xinjiang Uyghur Autonomous Region and ensure that trade distortions from forced labor are neutralized.

U.S. commences two investigations into Vietnam under Sec. 301 of the Trade Act of 1974, as amended — on currency and on use of illegally harvested timber

· October 12, 2020 · Uncategorized · , , , , , , , , · No Comments

On October 2, 2020, the U.S. Trade Representative announced the launch of two investigations on Vietnam’s acts, policies and practices. One involves whether Vietnam through the State Bank of Vietnam has intervened to undervalue the Vietnamese currency. The other investigation looks at whether the timber used by Vietnam to generate furniture and other products is from illegally harvested or trade timber. The USTR statement from October 2 is copied below:

“At the direction of President Donald J. Trump, the Office of the U.S. Trade Representative (USTR) is initiating an investigation addressing two significant issues with respect to Vietnam. USTR will investigate Vietnam’s
acts, policies, and practices related to the import and use of timber that is illegally harvested or traded, and will investigate Vietnam’s acts, policies, and practices that may contribute to the undervaluation of its currency and the resultant harm caused to U.S. commerce. USTR will conduct the investigation under Section 301 of the 1974 Trade Act. As part of its investigation on currency undervaluation, USTR will consult with the Department of the Treasury as to issues of currency valuation and exchange rate policy.

“United States Trade Representative Robert E. Lighthizer said, ‘President Trump is firmly committed to combatting unfair trade practices that harm America’s workers, businesses, farmers, and ranchers. Using illegal timber in wood products exported to the U.S. market harms the environment and is unfair to U.S. workers and businesses who follow the rules by using legally harvested timber. In addition, unfair currency practices can harm U.S. workers and businesses that compete with Vietnamese products that may be artificially lower-priced because of currency undervaluation. We will carefully review the results of the investigation and determine what, if any, actions it may be appropriate to take.’

“USTR will issue two separate Federal Register notices next week that will provide details of the investigation and information on how members of the public can provide their views through written submissions.”

https://ustr.gov/about-us/policy-offices/press-office/press-releases/2020/october/ustr-initiates-vietnam-section-301-investigation.

The two Federal Register notices were published on October 8. Initiation of Section 301 Investigation: Vietnam’s Acts, Policies, and Practices Related to Currency Valuation, 85 Fed. Reg. 63637-68 (Oct. 8, 2020); Initiation of Section 301 Investigation : Vietnam’s Acts, Policies, and Practices Related to the Import and Use of Illegal Timber, 85 Fed. Reg. 63,639-70 (Oct. 8, 2020).

In each notice of initiation, USTR reviews the concerns leading to the 301 investigation, indicates that consultations with Vietnam have been requested, provides a timeline for the public to submit written comments and indicates that because of uncertainties from COVID-19, USTR is not scheduling a public hearing but “will provide further information in a subsequent notice if it will hold a hearing”. Public comments in both investigations are due on November 12, 2020.

The currency investigation flows from the following concerns identified in the notice of initiation.

“The Government of Vietnam, through the State Bank of Vietnam (SBV), tightly manages the value of its currency—the dong. The SBV’s management of Vietnam’s currency is closely tied to the U.S. dollar. Available analysis indicates that Vietnam’s currency has been undervalued over the past three years. Specifically, analysis indicates that the dong was undervalued on a real effective basis by approximately 7 percent in 2017 and by approximately 8.4 percent in 2018. Furthermore, analysis indicates that the dong’s real effective exchange rate was undervalued in 2019 as well.

“Available evidence also indicates that the Government of Vietnam, through the SBV, actively intervened in the exchange market, which contributed to
the dong’s undervaluation in 2019. Specifically, the evidence indicates that
in 2019, the SBV undertook net purchases of foreign exchange totaling
approximately $22 billion, which had the effect of undervaluing the dong’s
exchange rate with the U.S. dollar during that year. Analysis suggests that
Vietnam’s action on the exchange rate in 2019 caused the average nominal
bilateral exchange rate against the dollar over the year, 23,224 dong per dollar, to be undervalued by approximately 1,090 dong per dollar relative to the level consistent the equilibrium real effective exchange rate.” 84 FR 63637-38.

The public is asked to provide written comments on six issues:

“• Whether Vietnam’s currency is undervalued, and the level of the
undervaluation.

“• Vietnam’s acts, policies, or practices that contribute to undervaluation of its currency.

“• The extent to which Vietnam’s acts, policies, or practices contribute to the
undervaluation.

“• Whether Vietnam’s acts, policies and practices are unreasonable or discriminatory.

“• The nature and level of burden or restriction on U.S. commerce caused by the undervaluation of Vietnam’s currency.

“• The determinations required under section 304 of the Trade Act, including what action, if any, should be taken.” 85 FR at 63638.

In the timber investigation, the background information which led to the initiation of the investigation is described as follows:

“Vietnam is one of the world’s largest exporters of wood products, including
to the United States. In 2019, Vietnam exported to the United States more than $3.7 billion of wooden furniture. To supply the timber inputs needed for its wood products manufacturing sector, Vietnam relies on imports of timber harvested in other countries. Available evidence suggests that a significant portion of that imported timber was illegally harvested or traded (illegal timber). Some of that timber may be from species listed under the
Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).

“Evidence indicates that much of the timber imported by Vietnam was
harvested against the laws of the source country. Reports indicate that a
significant amount of the timber exported from Cambodia to Vietnam was harvested on protected lands, such as wildlife sanctuaries, or outside of and
therefore in violation of legal timber concessions. Cambodia nevertheless
remains a significant source of Vietnam’s timber imports. Similarly, timber sourced from other countries, such as Cameroon and the Democratic Republic of the Congo (DRC), may have been harvested against those countries’ laws.

“In addition, Vietnamese timber imports may be traded illegally. For
example, it appears that most timber exported from Cambodia to Vietnam crosses the border in violation of Cambodia’s log export ban. In addition, aspects of the importation and processing of this timber also may violate Vietnam’s domestic law and be inconsistent with CITES.” 85 FR 63639.

Public comments are sought on the following six issues:

“• The extent to which Vietnamese producers, including producers of
wooden furniture, use illegal timber.

“• The extent to which products of Vietnam made from illegal timber,
including wooden furniture, are imported into the United States.

“• Vietnam’s acts, policies, or practices relating to the import and use
of illegal timber.

“• The nature and level of the burden or restriction on U.S. commerce caused by Vietnam’s import and use of illegal timber.

“• The determinations required under section 304 of the Trade Act, including what action, if any, should be taken.” 85 FR 63639.

USTR must make a determination within twelve months of the initiation of the two investigations. USTR can seek agreement with Vietnam to address the U.S. concerns.

The investigations are being started roughly one month before the November 3 U.S. elections. Obviously, if President Trump is reelected, the investigations will continue. If former Vice President Biden is elected, it is unclear what his Administration would do with the pending investigations (if USTR has not completed them by January 20, 2021)., although presumably the investigations would be continued and completed.

The two Federal Register notices are embedded below.

2020-22271

2020-22270

Food security and COVID-19 — how World Trade Organization Members could fill a pressing need

· August 15, 2020 · COVID-19, food security · , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , · No Comments

In 2020 as the world has been dealing with the health and economic consequences of the COVID-19 pandemic, the World Trade Organization has focused attention on keeping markets open by urging Members to provide notifications of trade restrictive and trade liberalizing measures taken not just on medical goods but also on agricultural products. The G20 countries and various groups of WTO Members have made commitments to impose restrictions only under limited circumstances and only temporarily, consistent with WTO obligations. Some Members have urged countries to agree not to impose export restraints on agricultural goods to limit worsening challenges during the COVID-19 pandemic. On agricultural export restrictions, a number of countries have applied some restrictions despite information that global food supplies are sufficient which should make restrictions unnecessary. The attention paid to the issue by the WTO and its Members have limited the number of countries engaged in agricultural export restraints which is a positive development.

With the steps many countries have taken to limit the spread of the COVID-19, there has been enormous economic pain incurred by most countires, with tens of millions of people in countries temporarily unemployed, schools closed, food distribution disrupted with the closure of restaurants which constitute a large part of food shipped from processing plants and farms.

The UN, World Bank and others have projected huge increases in the number of people pushed into extreme poverty because of the effects flowing from the pandemic. Extreme poverty brings with it food security issues as people suffering extreme poverty don’t have the means to procure basic food needs.

The United Nation’s World Food Programme (WFP) has long been involved in helping address food security needs around the world. In the COVID-19 pandemic, the WFP is mobilizing to provide assistance to some 138 million people in 83 countries. With most countries occupied with dealing with the needs of their own populations, countries and private citizens have been slow to respond to the humanitarian challenges facing so many around the world. The WFP has appealed for US$4.9 billion to let them perform their stepped up function during COVID-19 through the end of 2020. As of August 6, they had received only 9 percent of what they need, $US440 million.

The WFP during the pandemic has been involved in facilitating services by many NGOs and international organizations. For example, “Over 16,500 health and humanitarian personnel from 288 organizations have now been transported to destinations throughout Africa, Asia, the Middle East and the Commonwealth of Independent States countries by WFP’s air passenger service since its launch on 1 May. 53 destinations are now being served, with approximately 2,500 passengers using WFP’s service per week.” WFP, COVID-19, Level 3 Emergency, External Situation Report #12 (6 August 2020)(emphasis in original). The latest situation report is embedded below and reviews the wide array of services provided as well a review of some of the countries with acute needs. It also provides a link to contribute to the WFP.

WFP-0000118265

The External Situation Report indicates that there are 27 countries (based on an FAO-WFP hotspot analysis) which “are at risk of significant food security deterioration in the next six months”. (page 2). Countries at risk are Guatemala, Honduras, El Salvador, Nicaragua, Haiti, Peru, Ecuador, Colombia, Venezuela, Burkina Faso, Mali, the Niger, Sierra Leone, Liberia, Nigeria, Cameroon, Central African Republic, Democratic Republic of the Congo, Lebanon, Sudan, South Sudan, Mozambique, Zimbabwe, Somalia, Yemen, Ethiopia, Iraq, Syrian Arab Republic, Afghanistan and Bangladesh (total is 31, though Peru, Ecuador, Colombia appear to be at a lower level of risk based on coloration used on page 2). FAO – WFP early warning analsyis of acute food insecurity hotspots, https://docs.wfp.org/api/documents/WFP-0000117706/download/.

Where is the food aid?

For many countries, agricultural production has remained reasonably strong but large volumes of agricultural products have been destroyed based on lack of domestic markets, typically flowing from the collapse of the restaurant trade and the challenges in redirecting product, packaging and labeling into retail channels. See, e.g., New York Times, April 11, 2020, Dumped Milk, Smashed Eggs, Plowed Vegetables: Food Waste of the Pandemic, https://www.nytimes.com/2020/04/11/business/coronavirus-destroying-food.html.

At the same time, there have been huge increases in internal-country demand for help from food banks in some countries. See, e.g., for the United States: Feeding America, The first months of the food bank response to COVID, by the numbers, https://www.feedingamerica.org/hunger-blog/first-months-food-bank-response-covid-numbers.

It would seem that coordinated action by major agricultural goods producers in the WTO with the WFP and other groups should be able to provide large quantities of agricultural goods to those in need globally in the remaining months of 2020, goods which might otherwise simply be destroyed.

Similarly, while all countries are financially stretched during the pandemic, helping WFP obtain the needed financial resources to provide a coordinated pledging event should be of interest to WTO Members and many of the multilateral organizations working on COVID responses, as well as the business community and the general public.

While the WTO has grappled with limiting/eliminating export subsidies for agricultural goods, the WTO has always recognized the need to maintain the flow of humanitarian need particularly in agricultural goods. Consider these paragraphs from the 2015 Nairobi Ministerial Conference Decision on Export Competition (WT/MIN(15)45, WT/L/980 (21 Dec. 2015) at 6-7):

“International Food Aid

“22. Members reaffirm their commitment to maintain an adequate level of international food aid, to take account of the interests of food aid recipients and to ensure that the disciplines contained hereafter do not unintentionally impede the delivery of food aid provided to deal with emergency situations. To meet the objective of preventing or minimizing commercial displacement, Members shall ensure that international food aid
is provided in full conformity with the disciplines specified in paragraphs 23 to 32, thereby contributing to the objective of preventing commercial displacement.

“23. Members shall ensure that all international food aid is:

“a. needs-driven;

“b. in fully grant form;

“c. not tied directly or indirectly to commercial exports of agricultural products or other goods and services;

“d. not linked to the market development objectives of donor Members;
and that

“e. agricultural products provided as international food aid shall not be re-exported in any form, except where the agricultural products were not permitted entry into the recipient country, the agricultural products were determined inappropriate or no longer needed for the purpose for which they were received in the recipient country, or re-exportation is necessary for logistical reasons to expedite the provision of food aid for another country in an emergency situation. Any reexportation in accordance with this subparagraph shall be conducted in a manner that does not unduly impact established, functioning commercial markets of agricultural commodities in the countries to which the food aid is re-exported.

“24. The provision of food aid shall take into account local market conditions of the same or substitute products. Members shall refrain from providing in-kind international food aid in situations where this would be reasonably foreseen to cause an adverse effect on local13 or regional production of the same or substitute products. In addition, Members shall ensure that international food aid does not unduly impact established, functioning commercial markets of agricultural commodities.

“25. Where Members provide exclusively cash-based food aid, they are encouraged to continue to do so. Other Members are encouraged to provide cash-based or in-kind international food aid in emergency situations, protracted crises (as defined by the FAO14), or non-emergency development/capacity building food assistance environments where recipient countries or recognized international humanitarian/food entities, such as the United Nations, have requested food assistance.

“26. Members are also encouraged to seek to increasingly procure international food aid from local or regional sources to the extent possible, provided that the availability and prices of basic foodstuffs in these markets are not unduly compromised.

“27. Members shall monetize international food aid only where there is a demonstrable need for monetization for the purpose of transport and delivery of the food assistance, or the monetization of international food aid is used to redress short and/or long term food deficit requirements or insufficient agricultural production situations which give rise to chronic hunger and malnutrition in least-developed and net food-importing developing countries.15

“28. Local or regional market analysis shall be completed before monetization occurs for all monetized international food aid, including consideration of the recipient country’s nutritional needs, local United Nations Agencies’ market data and normal import and consumption levels of the commodity to be monetized, and consistent with Food Assistance Convention reporting. Independent third party commercial or non-profit
entities will be employed to monetize in-kind international food aid to ensure open market competition for the sale of in-kind international food aid.

“29. In employing these independent third party commercial or non-profit entities for the purposes of the preceding paragraph, Members shall ensure that such entities minimize or eliminate disruptions to the local or regional markets, which may include impacts on production, when international food aid is monetized. They shall ensure that the sale of commodities for food assistance purposes is conducted in a transparent, competitive and open process and through a public tender.16

“30. Members commit to allowing maximum flexibility to provide for all types of international food aid in order to maintain needed levels while making efforts to move toward more untied cash-based international food aid in accordance with the Food Assistance Convention.

“31. Members recognize the role of government in decision-making on international food aid in their jurisdictions. Members recognize that the government of a recipient country of international food aid can opt out of the usage of monetized international food aid.

“32. Members agree to review the provisions on international food aid contained in the preceding paragraphs within the regular Committee on Agriculture monitoring of the implementation of the Marrakesh Ministerial Decision of April 1994 on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-developed and net food-importing developing countries.

“13 The term ‘local’ may be understood to mean at the national or subnational level.

“14 FAO defines protracted crises as follows: ‘Protracted crises refer to situations in which a significant portion of a population is facing a heightened risk of death, disease, and breakdown of their livelihoods.’

“15 Belize, the Plurinational State of Bolivia, Ecuador, Fiji, Guatemala, Guyana, Nicaragua, Papua New Guinea and Suriname shall also have access to this provision.

“16 In the instance where it is not feasible to complete a sale through a public tender, a negotiated sale can be used.”

It is believed that the current WTO provisions on food aid should not pose hurdles to countries providing in kind aid where there are needed food products that can be exported during the pandemic. If that is not the case, then the WTO Members should agree to a temporary waiver of relevant restrictions to permit food aid during the pandemic.

There has been much discussion within the G20, WTO, WHO and other groups that collective action on the medical front is critical to see that medical goods, vaccines, are therapeutics are available equitably and at affordable prices. What one hasn’t seen is the same focus on ensuring that the world’ populations have access to food equitably and at affordable prices. During the pandemic, WTO Members have the opportunity to work together to see that food is not wasted and that food aid is supplemented to the extent possible to alleviate the unique challenges to food security presented by the COVID-19 pandemic.

Food Security Complications from COVID-19 – Recent UN Information and G20 and WTO Member Statements

· April 23, 2020 · COVID-19 · , , , , , , , , , , , , , , , , , , , , , , , · No Comments

With the global health crisis flowing from the COVID-19 pandemic ongoing, the world is also facing the specter of mass starvation flowing from a combination of ongoing armed conflicts, weather events, export restraints on food and potential disruptions in food supply. Export restraints and disruptions in food supply are increasing based on actions to address the COVID-19 pandemic.

Governments of the world are understandably focused on the health pandemic where known deaths since December are approaching 200,000 with confirmed cases over 2.5 million and continuing to increase. To date Europe and the United States and a few other countries account for the vast majority of confirmed cases and deaths from COVID-19, though nearly all countries have some cases and many other countries could see rapidly growing cases in the weeks and months ahead.

In contrast, the number of people in the world facing acute hunger and possible starvation is staggering with death projections for 2020 in key months of likely shortage as high as 300,000/day or more without concerted efforts to prevent! On April 21, David Beasley, the UN World Food Programme Executive Director made a virtual presentation to the UN Security Council. https://www.wfp.org/news/wfp-chief-warns-hunger-pandemic-covid-19-spreads-statement-un-security-council. His statement is reproduced below.

“Forgive me for speaking bluntly, but I’d like to lay out for you very clearly what the world is facing at this very moment. At the same time while dealing with a COVID-19 pandemic, we are also on the brink of a hunger
pandemic.

“In my conversations with world leaders over the past many months, before the Coronavirus even became an issue, I was saying that 2020 would be facing the worst humanitarian crisis since World War II for a number of reasons.

“Such as the wars in Syria and Yemen. The deepening crises in places like South Sudan and, as Jan Egeland will no doubt set out, Burkina Faso and the Central Sahel region. The desert locust swarms in Africa, as Director General Qu highlighted in his remarks. And more frequent natural disasters and changing weather patterns. The economic crisis in Lebanon affecting millions of Syrian refugees. DRC, Sudan, Ethiopia. And the list goes on. We’re already facing a perfect storm.

“So today, with COVID-19, I want to stress that we are not only facing a global health pandemic but also a global humanitarian catastrophe. Millions of civilians living in conflict-scarred nations, including many women and children, face being pushed to the brink of starvation, with the spectre of famine a very real and dangerous possibility.

“This sounds truly shocking but let me give you the numbers: 821 million people go to bed hungry every night all over the world, chronically hungry, and as the new Global Report on Food Crises published today shows, there are a further 135 million people facing crisis levels of hunger or worse. That means 135 million people on earth are marching towards the brink of starvation. But now the World Food Programme analysis shows that, due to the Coronavirus, an additional 130 million people could be pushed to the brink of starvation by the end of 2020. That’s a total of 265 million people.

“On any given day now, WFP offers a lifeline to nearly 100 million people, up from about 80 million just a few years ago. This includes about 30 million people who literally depend on us to stay alive. If we can’t reach these people with the life-saving assistance they need, our analysis shows that 300,000 people could starve to death every single day over a three-month period. This does not include the increase of starvation due to COVID-19.

“In a worst-case scenario, we could be looking at famine in about three dozen countries, and in fact, in 10 of these countries we already have more than one million people per country who are on the verge of starvation. In many places, this human suffering is the heavy price of conflict.

“At WFP, we are proud that this Council made the historic decision to pass Resolution 2417 in May 2018. It was amazing to see the council come together. Now we have to live up to our pledge to protect the most vulnerable and act immediately to save lives.

“But this is only in my opinion only the first part of the strategy needed to protect conflict-riven countries from a hunger pandemic caused by the Coronavirus. There is also a real danger that more people could potentially die from the economic impact of COVID-19 than from the virus itself.

“This is why I am talking about a hunger pandemic. It is critical we come together as one united global community to defeat this disease, and protect the most vulnerable nations and communities from its potentially devastating effects.”

“Lockdowns and economic recession are expected to lead to a major loss of income among the working poor. Overseas remittances will also drop sharply – this will hurt countries such as Haiti, Nepal, and Somalia just a name a couple. The loss of tourism receipts will damage countries such as Ethiopia, where it accounts for 47% of total exports. The collapsing oil prices in lower-income countries like South Sudan will have an impact significantly, where oil accounts for 98.8% of total exports. And, of course, when donor countries’ revenues are down, how much impact will this have on life saving foreign aid.

“The economic and health impacts of COVID-19 are most worrisome for communities in countries across Africa as well as the Middle East, because the virus threatens further damage to the lives and livelihoods of people already put at risk by conflict.

“WFP and our partners are going all-out to help them we’ll do everything we possibly can. For example, we know that children are particularly vulnerable to hunger and malnutrition, so we are prioritizing assistance to them.

“Right now, as you may now 1.6 billion children and young people are currently out of school due to lockdown closures. Nearly 370 million children are missing out on nutritious school meals – you can only imagine when children don’t get the nutrition they need their immunity goes down. Where nutritious school meals have been suspended by school closures, we are working to replace them with take-home rations, wherever possible.

“As you know, WFP is the logistics backbone for the humanitarian world and even more so now for the global effort to beat this pandemic. We have delivered millions upon millions of personal protective equipment, testing kits and face masks to 78 countries on behalf of the World Health Organization. We are also running humanitarian air services to get frontline health professionals doctors, nurses, and humanitarian staff into countries that need help, especially while passenger air industry is basically about shut down.

“But we need to do so much more, and I urge this Council to lead the way. First and foremost, we need peace. As the Secretary-General recently said very clearly, a global ceasefire is essential.

“Second, we need all parties involved in conflicts to give us swift and unimpeded humanitarian access to all vulnerable communities, so they can get the assistance to them that they need, regardless of who they are or where they are. We also need in a very general sense humanitarian goods and commercial trade to continue flowing across borders, because they are the lifeline of global food systems as well as the global economy. Supply chains have to keep moving if we are going to overcome this pandemic and get food from where it is produced to where it is needed. It also means resisting the temptation to introduce export bans or import subsidies, which can lead to price hikes and almost always backfire.

“WFP is working hand in glove with governments to build and strengthen national safety nets. This is critical right now to ensure fair access to assistance and help maintain peace and prevent rising tensions among communities.

“Third, we need coordinated action to support life-saving humanitarian assistance. For example, WFP is implementing plans to preposition three months’ worth of food and cash to serve country operations identified as priorities. We are asking donors to accelerate the (US) $1.9 billion in funding that has already been pledged, so we can build stockpiles and create these life-saving buffers, and protect the most vulnerable from the effects of supply chain disruptions, commodity shortages, economic damage and lockdowns. You understand exactly what I’m talking about.

“We are also requesting a further USD350 million to set up a network of logistics hubs and transport systems to keep humanitarian supply chains moving around the world. They will also provide field hospitals and medical evacuations to the frontline humanitarian and health workers, as needed and strategically.

“Excellencies, two years ago the Security Council took a landmark step when it recognized, and condemned, the devastating human toll of conflict paid in poverty and hunger. Resolution 2417 also highlighted the need for early warning systems, and today I am here to raise that alarm.

“There are no famines yet. But I must warn you that if we don’t prepare and act now – to secure access, avoid funding shortfalls and disruptions to trade – we could be facing multiple famines of biblical proportions within a short few months.

“The actions we take will determine our success, or failure, in building sustainable food systems as the basis of stable and peaceful societies. The truth is, we do not have time on our side, so let’s act wisely – and let’s act fast. I do believe that with our expertise and partnerships, we can bring together the teams and the programs necessary to make certain the COVID-19 pandemic does not become a humanitarian and food crisis catastrophe. So Mr. President, thank you, thank you very much.

Emphasis added. See also https://news.un.org/en/story/2020/04/1062272.

The 2020 Global Report on Food Crises mentioned in Mr. Beasley’s statement can be found here and is embedded below. https://docs.wfp.org/api/documents/WFP-0000114546/download/?_ga=2.200353390.1965067900.1587648297-1190105299.1587648297.

GRFC_2020_ONLINE_200420

Fifty-six countries or territories are listed as at various levels of concern for hunger in 2019 and potentially for 2020 and are summarized on pages 214-215 of the report. Eleven of the fifty-six countries or territories are categorized as at a phase 4 level (emergency) for the country as a whole or for particular parts. These include Afghanistan, Angola, the Central African Republic, the Democratic Republic of Congo, Haiti, Nigeria, South Sudan, Sudan, Yemen, Zambia, and Zimbabwe. Twenty-one others are categorized as phase 3 (crisis). These include Burkino Faso, Cameron, Chad, Eswatini, Ethiopia, Guatemala, Honduras, Lesotho, Madagascar, Malawi, Mali, Mauritania, Mozambique, Namibia, Niger, Pakistan, Senegal, Sierra Leone, Somalia, Uganada, and the United Republic of Tanzania. Eight countries or territories were ranked phase 2 (stressed). These included Cabo Verde, Cote d’Ivoire, El Salvador, Gambia, Guinea, Guinea-Bissau, Kenya and Nicaragua. Two countries or territories were listed as phase 1 (minimal)(Burundi and Rwanda). The remaining fourteen countries or territories had not been given a specific phase, some because the problem related to the presence of large numbers of refugees and what might happen during the year; for others the descriptions of the hunger challenges would suggest serious problems. These countries or territories include Bangladesh, Colombia, Djibouti, Ecuador, Iraq, Lebanon, Liberia, Libya, Myanmar, Palestine, Syrian Arab Republic, Turkey, Ukraine, and Venezuela.

While the bulk of the concerns raised in the report go to ongoing conflicts and weather problems, trade restrictions are potentially important contributors. As reviewed in an earlier post, a number of countries have imposed export restraints on certain agricultural goods. With the exception of Myanmar and Ukraine who are listed in the 2020 Global Report on Food Crises, the other countries reviewed in my earlier post are not included in the report. These countries include Russia, Kazakhstan, Vietnam, Malaysia, the Philippines, Thailand, Indonsia and Cambodia. The earlier post is linked below.

COVID-19 – WTO report on medical goods; FAO report on food security

G20 Agriculture Ministers Communique

Following a virtual meeting on April 21, G20 Agriculture Ministers released a Ministerial Statement that reaffirmed “the importance of working to ensure the continued flow of food, products and inputs essential for agircultural and food production”. The Statement can be found here. https://g20.org/en/media/Documents/G20_Agriculture%20Ministers%20Meeting_Statement_EN.pdf. The statement covers a fair amount of ground but doesn’t prohibit export restraints per se in agriculture but rather repeats the limitations (reflecting existing WTO flexibilities) that trade ministers articulated for medical supplies – any restraints should be targeted, proportionate, transparent, and temporary. The full statement is reproduced below.

“We, the G20 Agriculture Ministers, are deeply saddened by the devastating human losses and suffering caused by the spread of COVID-19. We commit to cooperating closely and taking concrete actions to safeguard global food security and nutrition.

‘We reaffirm the importance of working to ensure the continued flow of food, products, and inputs essential for agricultural and food production across borders in line with our Leaders’ Statement on COVID-19 of March 26, 2020. We acknowledge the challenges of minimizing the risk of COVID-19 while keeping food supply chains functioning. We will continue to work to ensure the health, safety, welfare, and mobility of workers in agriculture and throughout the food supply chain.

“We will guard against any unjustified restrictive measures that could lead to excessive food price volatility in international markets and threaten the food security and nutrition of large proportions of the world population, especially the most vulnerable living in environments of low food security. We agree that emergency measures in the context of the COVID-19 pandemic must be targeted, proportionate, transparent, and temporary, and that they do not create unnecessary barriers to trade or disruption to global food supply chains, and are consistent with World Trade Organization (WTO) rules. We recognise the importance of transparency and commend the Trade and Investment Ministers’ commitment to notify the WTO of any trade-related measures taken, including those related to agriculture and essential foodstuffs. We reaffirm our agreement not to impose export restrictions or extraordinary taxes on food and agricultural products purchased for non-commercial humanitarian purposes by the World Food Programme (WFP) and other humanitarian agencies.

“We emphasize the work of the G20 Agricultural Market Information System (AMIS) and take note of AMIS’ assessment that at present global food supplies are adequate and food markets remain well balanced. As members, we commit and call on other members to continue providing timely and reliable information on global food market fundamentals to help markets, countries, and consumers make informed choices. Where appropriate, we will coordinate policy responses, supported by the AMIS Global Food Market Information Group and the AMIS Rapid Response Forum. We call for continued support for AMIS, including through voluntary financial contributions.

“We will work together to help ensure that sufficient, safe, affordable, and nutritious food continues to be available and accessible to all people, including the poorest, the most vulnerable, and displaced people in a timely, safe, and organized manner, consistent with national requirements. Acknowledging the critical role of the private sector in food systems, we call for enhanced cooperation between the public and private sectors to help mobilize rapid and innovative responses to impacts of this pandemic on the agriculture and food sectors.

“Under the current challenging circumstances, we stress the importance of avoiding food losses and waste caused by disruptions throughout food supply chains, which could exacerbate food insecurity and nutrition risks and economic loss. We stress the need to strengthen the sustainability and resilience of food systems globally, including to future shocks from disease and pest outbreaks, and to the global challenges that drive these shocks. In line with the One Health approach, we call for strengthened mechanisms for monitoring, early warning, preparedness, prevention, detection, response, and control of zoonotic diseases, and developing science-based international guidelines on stricter safety and hygienic measures for zoonosis control.

“We deeply thank farmers and workers, and small, medium and large scale agri-food businesses for their continuous efforts to ensure our food supply. We will intensify our efforts, in line with WTO rules and the 2030 Agenda for Sustainable Development, to support them to sustain their activities and livelihoods during the crisis and to assist their recovery afterwards. Our efforts will support rural communities, especially small-scale farmers and family farms, to be more economically prosperous, resilient and sustainable, and to have improved food security and nutrition, giving special attention to the needs of developing and low-income countries.
We will continue our cooperation with relevant international organizations and within their mandates work to: reinforce international cooperation; identify additional actions to alleviate the impacts of COVID-19 on food security and nutrition; share best practices and lessons learned, such as addressing barriers to supply chains; promote evidence and science-based information and combat misinformation; provide capacity building and technical assistance; and promote research, responsible investments, innovations and reforms that will improve the sustainability and resilience of agriculture and food systems. This work could build on the Food and Agriculture Organization’s (FAO’s) evolving response to COVID-19, the International Fund for Agricultural Development’s (IFAD’s) evolving efforts to support a strong recovery from the effects of COVID-19, policy monitoring and analysis by the OECD, and other relevant initiatives, such as the preparation for the 2021 UN Food Systems Summit.

“We will continue our close cooperation and as necessary update our response to the COVID-19 pandemic and our broader G20 agriculture and food agenda. We stand ready to reconvene as required.” (Emphasis added)

The virtual meeting of G20 Agriculture Ministers included information received from the various UN organizations with expertise. See http://www.fao.org/news/story/en/item/1272058/icode/

The Ministerial Statement is helpful in encouraging nations to maintain open markets, to not tax humanitarian food aid and to provide transparency in actions taken. But the Ministerial Statement does not commit the G20 members to avoid trade restrictions where such restrictions are temporary, targeted, transparent and proportionate. Based on actions taken by China and India during the 2007-2008 food crisis, it is not surprising that the G20 could not get hard commitments to avoid agriculture export restrictions from all G20 members.

As international organizations are serving as transparency fora and are encouraging joint action, it is not surprising that the Ministerial Statement was warmly received by the WTO as the statement supports transparency and WTO consistency of any actions taken.. https://www.wto.org/english/news_e/news20_e/dgra_21apr20_e.htm.

Communique from Various WTO Members

On July 22, twenty-three WTO Members (including the EU) submitted a joint statement to the WTO entitled RESPONDING TO THE COVID-19 PANDEMIC WITH OPEN AND PREDICTABLE TRADE IN AGRICULTURAL AND FOOD PRODUCTS, WT/GC/208, G/AG/30. The statement is embedded below.

WTGC208

The statement cautions countries to avoid actions to address the COVID-19 pandemic that would adversely affect trade in agricultural goods. Absent from the joint statement are important Members who have in the past used or who at present are using export restraints on certain agricultural products including China and India (past export restraints) and Russia, Kazakhstan, Vietnam, Malaysia, the Philippines, Thailand, Indonesia, Myanmar and Cambodia (current export restraints).

The joint statement has strong language on keeping markets open (including the negative effects of export restrictions on agriculture and agri-food products), avoiding waste, maintaining effective transport and logistical services, the importance of transparency in actions taken as well as food production and stocks. Nonetheless, because of existing WTO flexibilities provided to Members, the commitments made by the 23 Members include one which maintains the right to emergency measures that are “targeted, proportionate, transparent and temporary, and not create unnecessary barriers to trade or disruption to global supply chains”.

The joint statement is certainly a positive step with eight specific commitments taken by WTO Members who account for 63% of global agricultural exports and 55% of global agricultural imports. Time will tell if the list of supporters of the commitments expands to other major Members.

Conclusion

Based on current and projected food supplies, there should be no crisis in food supplies to the world if there is collective efforts to keep markets open, provide food aid for populations experiencing severe shortages due to conflict, adverse weather events and any adverse effects from the COVID-19 pandemic. Much of what the UN and its World Food Programme seek (cease fires; access to people regardless of conflicts or sanctions) is not likely to happen based on actions by certain major countries. But keeping world markets open and food aid funded hopefully will occur. The consequences of failure in this regard would greatly exacerbate the health and economic costs already experienced from COVID-19.