In a recent virtual agriculture symposium titled "Illicit Trade in Food and Food Fraud," Deputy Director-General of the World Trade Organization (WTO), Jean-Marie Paugam, highlighted the crucial role of WTO rules in addressing the issue of illegal food trade. Paugam emphasized that the WTO's rulebook provides a legal framework for international food trade, making it a key player in the fight against illicit trade.
Paugam stated, "By definition, our DNA is legal trade. Strengthening the WTO is the first way to combat illicit trade," underscoring the organization's commitment to promoting open and legal trade practices. He explained that WTO rules empower member countries to exercise control over their borders and enforce their trade laws, leaving little room for illegal trade activities. Using an analogy from physics, he stated, "Like in physics where you have matter and antimatter, we (the WTO) are the matter of legal trade, and illicit trade is the antimatter."
Illegal food trade encompasses various activities, including food fraud, which involves the sale of sub-standard food products and ingredients, and food smuggling, often done to evade high import and export tariffs in certain economies. According to the Transnational Alliance to Combat Illicit Trade, food fraud alone results in annual economic losses ranging from USD 30 to 50 billion.
Paugam also emphasized that one of the key strategies to reduce the incentive for illegal trade is to encourage WTO member countries to lower trade barriers, resulting in lower prices for legal goods. However, he acknowledged that a one-size-fits-all approach may not be suitable for all countries.
Several WTO agreements play a pivotal role in combating illegal food trade, including the Agreement on Sanitary and Phytosanitary Measures (SPS), the Agreement on Technical Barriers to Trade (TBT), and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). These agreements enable governments to regulate food imports based on scientific and risk assessment techniques, address illegal practices like false food labels, and protect the intellectual property content of traded goods.
Paugam also highlighted the importance of other WTO agreements, such as the Customs Valuation Agreement, the Pre-Shipment Inspection Agreement, and the Trade Facilitation Agreement, which regulate various border operations and aim to facilitate trade while combating fraud.
In his closing remarks, Deputy Director-General Paugam stressed the need to update the WTO rulebook and strengthen open trade practices to effectively combat illegal food trade. He emphasized the ongoing agriculture negotiations, which seek to reduce high tariffs and trade-distorting subsidies, as well as address import and export restrictions. By opening up trade opportunities, the WTO aims to diminish incentives for smuggling and illegal trade.
Looking ahead, Paugam noted that the upcoming 13th Ministerial Conference in February 2024 is expected to provide valuable insights into the future direction of negotiations, particularly in terms of market opening and other measures aimed at minimizing the costs of legal trade while maximizing its benefits.
