Trading Up the Food Chain

With regard to food security, trade is part of the solution, not the probtem

Trade and aid are the twin pillars of EU development policy, with trade acting as a catalyst for economic growth and poverty reduction in developing countries. Free trade is a vital part of the EU development strategy that has already lifted hundreds of millions of people in the developing world out of poverty.The EU is the world's biggest exporter of agricultural products—primarily high-quality farm products and processed agricultural goods. The EU is also the leading importer of agricultural products globally and from developing countries, importing mostly basic agricultural commodities.The agricultural sector plays a crucial and often dominant role in many developing economies, which is why the EU grants extensive market access to developing countries for their agricultural exports to the EU. The Everything but Arms (ERA) initiative allows duty-free, quota-free access to the EU market for all products, except arms and ammunition, from the world's 49 poorest nations. Countries from the African, Pacific, and Caribbean regions that have signed Economic Partnership Agreements (EPA) also benefit from free access for their agricultural products to the EU. Through its preferential trade policy and its Aid for Trade (AfT) program, the EU ensures that developing countries can benefit from access to European markets and an increasingly open global economy. AfT helps developing countries take advantage of trade opportunities by helping improve technical facilities in ports, assisting exporters in meeting EU health and safety standards, and supporting entrepreneurial ism at every level. The EU is a strong advocate of pro-development measures in the World Trade Organization's current round of global trade negotiations, known as the Doha Development Agenda (DDA). The EU believes that further liberalization of trade in agricultural products is an important contribution to sustainable economic growth.

The EU is pursuing specific food-related priorities for the DDA:

• Agriculture Sector.
• Geographic Indications.

The EU wants to advance the protection of geographical indications through the Doha Round to globally safeguard the legal identity of products such as Parma Ham and Roquefort cheese that are closely linked to a particular locale and production tradition.

Success Stories: Trade Working for Development Dominica. An EU program helped four local bakeries form a "Collective Efficiency Group" to benefit from economies of scale. Equipment was relocated to a single bakery, allowing the bakers to boost production, reduce costs, and venture into new markets. The group subsequently made a successful bid to supply airlines at the nearby airport with bread and sponge cake for long-haul flights to Europe. After meeting the airlines' exacting quality standards, this cooperative now supplies Air France, Iberia, and American Airlines, and has doubled it`s combined working capital, sales, and profits. Madagascar. More than a decade of EU support to develop the lychee trade has helped enhance product quality to meet the EU's high food safety standards. Technical assistance, access to quality plants, and specific support to help exporters meet commercial norms and standards has resulted in the tripling of exports to the EU in ten years. Thirty producer cooperatives are on track to achieve commercial certification and gain access to a new market segment for extra high-quality products. Ukraine. Following the collapse of the Soviet Union, the Ukraine's traditional food producers are adapting slowly to the new economic landscape and need technical advice and assistance on markets, food quality, safety, trace-ability, and logistics. The EU's Agrilogistics project has helped improve logistical services and marketing channels for small and medium-sized agricultural producers. Supply channels for vegetables have been established through selected supermarkets; deliveries of tomatoes, onions, and cucumbers have been organized to a local cannery; links have been set up with a distribution center for beetroot, pickles, and other vegetables; and the supply chain has been organized for a grain collective.