THE G20 SUMMIT PROVIDES AN OPPORTUNITY FOR COORDINATION
The stream crisis is more diffuse – these are fuels, fertilizers and food, including wheat and vegetable oils. At the same time, the crisis is now more acute. All of these products are experiencing low inventories, reduced production and disrupted supply chains.
Stopping this crisis, let alone returning to more normal business models, will not be easy. Coordination among the world’s major economies will be needed to make progress.
Fortunately, an opportunity for such coordination is on the horizon, the next Group of Twenty (G20) summit meeting in Bali in November. With Indonesia in the chair, there is an opportunity for this country and for the Association of Southeast Asian Nations (ASEAN), as a major regional trade organization, to secure a formal commitment from G20 members to focus on food security and roll back trade restrictions.
Russia’s possible participation in the G20 will complicate this agenda, but there is room for active diplomacy, ideally led by Indonesia, to circumvent this problem. If at all possible, the elements of a “G20 Bali Commitment on Trade Normalization” are quite simple.
This will require a firm commitment to avoid any further restrictions on the export of essential products, in particular wheat, vegetable oils and fertilizers. Leaders will also have to agree to reduce, and eventually eliminate, export restrictions on these essential products. Each country can have considerable leeway to plan its actions according to its local political situation.
To ensure the commitment, it is important to establish a small secretariat, with Indonesia at the helm, to monitor and publish the details of the implementation of the commitments. Transparency is the best enforcement mechanism.
Unfortunately, neither the United Nations nor the World Trade Organization can play a credible role here. But other organizations, such as the Agricultural Market Information System and the International Food Policy Research Institute, could help fill the void.