How Could Trade Policy Better Address Food System Shocks?

The report analyzes three types of food system shocks—the COVID-19 pandemic, the 2015–2016 Southern African drought, and the US-China trade war—to argue that existing WTO rules are insufficient to prevent harmful trade measures during crises. It highlights how climate change will increase the frequency of extreme weather events, further destabilizing food markets. The authors propose 13 recommendations centered on four objectives: ensuring food access for the poor, safeguarding farmer livelihoods, improving market functions through sustainable resource allocation, and restoring multilateral trust. Key proposals include banning export restrictions on humanitarian aid, cutting high tariff peaks, and establishing a special safeguard mechanism for low-income countries.

• The COVID-19 pandemic caused multi-faceted shocks to the food system, including supply chain disruptions, panic buying, and significant impacts on the livelihoods of informal and temporary workers, though it did not lead to generalized global food shortages due to abundant harvests.
• During the COVID-19 pandemic, nearly two dozen countries imposed export restrictions on food, which raised concerns about reduced food availability and higher prices for low-income food-importing countries.
• The 2015–2016 El Niño-induced drought in Southern Africa reduced regional grain production by approximately 30% and led to sharp price increases for maize, with some countries seeing increases up to 177%.
• The United States–China trade war serves as a primary example of a policy-induced shock, where retaliatory tariffs caused U.S. agricultural exports to China to fall by an average of 71% in certain product lines.
• Climate change is projected to decrease food supply stability by increasing the magnitude and frequency of extreme weather events, particularly droughts in southern Africa and the Mediterranean region.
• Existing WTO rules are criticized for having significant loopholes regarding export restrictions and for failing to meaningfully constrain trade-distorting domestic support provided by wealthy nations.
• The report recommends that WTO members ban export restrictions on foodstuffs purchased for non-commercial humanitarian purposes by the World Food Programme to ensure timely emergency assistance.
• To improve market predictability, the report argues for the reduction of 'tariff peaks'—unusually high tariffs on key farm goods in major importing countries such as the EU, China, the US, and Japan.
• The authors propose a new special safeguard mechanism (SSM) to allow developing countries, especially those with lower bound tariffs, to impose temporary duties to protect producers from sudden price depressions.
• The report calls for the harmonization of domestic support by establishing new WTO ceilings and gradual cuts to trade-distorting support, while allowing a minimal level of support for all countries.
• The crisis in multilateralism, exemplified by the US blocking appointments to the WTO Appellate Body, has left trade disputes unresolved and undermined the stability of global food markets.

APA

Hepburn, J., Omari-Motsumi, K., Smaller, C., & Zoundi, Z. (2021). How Could Trade Policy Better Address Food System Shocks? International Institute for Sustainable Development. https://www.iisd.org/system/files/2021-04/trade-policy-address-food-system-shocks-en.pdf

Chicago

Hepburn, Jonathan, Kulthoum Omari-Motsumi, Carin Smaller, and Zakaria Zoundi. How Could Trade Policy Better Address Food System Shocks? International Institute for Sustainable Development, 2021. https://www.iisd.org/system/files/2021-04/trade-policy-address-food-system-shocks-en.pdf.

Wikipedia

{{cite report |last1=Hepburn |first1=Jonathan |last2=Omari-Motsumi |first2=Kulthoum |last3=Smaller |first3=Carin |last4=Zoundi |first4=Zakaria |title=How Could Trade Policy Better Address Food System Shocks? |publisher=International Institute for Sustainable Development |date=March 2021 |url=https://www.iisd.org/system/files/2021-04/trade-policy-address-food-system-shocks-en.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{hepburn2021how, author = {Hepburn, Jonathan and Omari-Motsumi, Kulthoum and Smaller, Carin and Zoundi, Zakaria}, title = {{How Could Trade Policy Better Address Food System Shocks?}}, institution = {International Institute for Sustainable Development}, year = {2021}, month = mar, url = {https://www.iisd.org/system/files/2021-04/trade-policy-address-food-system-shocks-en.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }