Mediterranean Economies 2023
DOI: 10.1401/9788815411167/c5
The ad-valorem equivalent of
NTMs at the product level is illustrated in figure 6. The highest ad-valorem
equivalents (exceeding 80 per cent) of TBT are found in dairy products, cocoa, and
meat. Grains and some processed food products, such as prepared cereals, sugar,
prepared vegetables, oils, cereals, malt and wheat also face substantial NTMs with
an ad-valorem equivalent ranging from 60 per cent to 80 per cent. As for SPS
measures, the highest ad-valorem equivalents are imposed on cereals vegetables, fats
and oils, dairy products, malt and wheat, ranging from 64 per cent to 50.1 per cent.
Some of these products are not only relevant from a nutritional point of view (such
as grains, cereals, and meat) but are also among the top imported food items by MENA
countries and are critical for their food security. Surprisingly, tobacco imports
are subsidized (with a negative ad-valorem equivalent of SPS measures), despite the
adverse health effects of tobacco consumption and its irrelevance to the question of
food security. A potential reason behind that might be due to the political economy
of the trade in tobacco and the lobbies of large firms who are exporting this good.
¶{p. 156}
¶
¶
3.3. Behind-the-Border Costs
Trade barriers are not the only
policy measures that can be negatively associated with food security in the MENA
region. Behind-the-border measures, including the logistical process of exporting
and importing can be substantially burdensome and costly. In Figure 7, the cost and
time to export and import are compared across several regions. Overall,
behind-the-border costs in the MENA region are among the highest worldwide. For
example, the cost of documentary compliance to export is by far the highest
worldwide (259$) and compared to other developing countries in Asia and Latin
America. The cost of documentary compliance to import in the MENA region is the
second highest (285$) after Sub-Saharan Africa (296$).
Concerning the cost of border
compliance, the MENA region is the third most costly region to export and import,
after Sub-Saharan Africa and Latin America and the Caribbean (446$ and 524$ to
export from and import into the MENA region respectively). In terms of time, the
region also ranks third after Sub-Saharan Africa and South Asia with the longest
waiting times, with as long as 67 days for border compliance conditions to export
and 75 days to import. The same conclusion can be made for the time needed for
border compliance, where it would take as long as 51 days and 91 days to achieve
border compliance for exports and imports, respectively.
High costs and lengthy
behind-the-border procedures to export and import have a huge impact on trade in
food, and, consequently, on the region’s food security. Not only do such impediments
increase the cost to trade, but can also result into substantial losses of goods and
waste along the value chain, given the perishable nature of many food
items.¶{p. 159}
3.4. Trade Agreements
The MENA region is the least
integrated region in the global trading system. Out of 19 countries, nine have not
yet joined the ¶{p. 160}WTO. Although liberalization of trade in
agriculture has been delayed under the WTO, other WTO commitments, such as MFN
tariffs, national treatment, market liberalization, privatization, and deregulation
can affect trade in agriculture [Keulertz and Byiringiro 2022] and increase local
competitiveness and efficiency.
At the bilateral level, several
MENA countries have preferential trade agreements with the USA and the EU. For
example, the EU has signed Association Agreements with several South-Mediterranean
Countries, including Tunisia, Morocco, Egypt, Lebanon, and Jordan under the umbrella
of the Euro-Mediterranean Partnership. However, trade in agriculture remains largely
excluded from these agreements, as their primarily focus is the manufacturing sector
[Aboushady and Zaki 2021]. In selected agricultural goods, trade takes place under
quotas, NTMs are heavily used by importers on both shores of the Mediterranean.
In 1997, 17 MENA countries
signed the agreement on the establishment of the Greater Arab Free Trade Area
(GAFTA), and Algeria joined the agreement in 2009. The objective was to achieve full
liberalization of intra-Arab trade by 2008. However, regional trade in agriculture
remains largely hampered by the excessive use of NTMs. The lack of harmonization of
food safety regulations also makes it more difficult to liberalize trade in
agriculture within the region. Overall, the progress of regional trade under GAFTA
is undermined by divergent political interests, political upheavals, and armed
conflicts in the region.
4. Challenges for Trade Policy and Food Security
4.1. Challenges in Turbulent Times
Over the past three years, two
major global shocks put MENA’s food security at stake: the COVID-19 pandemic and the
Russian war on Ukraine. Both shocks had widespread effects on global supply and
demand of food, caused major supply chain disruptions and substantial price surges.
The effects on the MENA region are adverse, given its heavy dependence on imports of
food, especially from Russia and Ukraine.
COVID 19
Impact. The COVID-19 pandemic had a substantial impact on the global
markets for food and agriculture. Supply and
¶{p. 161}demand shocks
took place, global supply chains were disrupted. The use of export restrictions to
ensure food security re-emerged in a similar way to the quantitative restrictions
during the price spikes of 2007-2008 [Martin and Glauber 2020], in addition to
governmental support to the farming sector, and more flexible import restrictions
[Hepburn et al. 2021]. In heavy net food importing
countries(such as Egypt, Jordan, Palestine and Yemen), food prices surged because of
the heavy import dependency, especially in cereals. The burden is heavier for
countries that subsidize wheat flour and bread (such as Egypt), as they will have to
increase their subsidies due to rising import prices. In several MENA countries,
households had to face several challenges that affected their food purchase and
consumption. According to the household survey results on difficulties related to
getting food summarized in figure 8, 81 per cent of surveyed households in Tunisia
reported being unable to buy the usual quantity of food because its price had
increased and 77 per cent because household income decreased. Moreover, 60 per cent
of the households had to cope by reducing their food consumption. At the same time,
59 per cent reported reduced food purchases due to supply shortages and 39 per cent
due to restrictions imposed by the government on the mobility of people and/or
market closures. In Morocco, the impact of COVID-19 on food security appears to be
less severe, with only 9 per cent of the surveyed households reporting shortages in
markets. In Morocco, the government responded to the crisis by adopting a more
liberal approach, compared to other countries in the region. Tariffs were reduced on
wheat, lentils, chickpeas, and beans [Mandour 2021]. Despite these measures, 50 per
cent of the surveyed households reported an increase in prices, and 54 per cent
reported a drop in their income that led to decreased food purchases. Nearly one
third of the surveyed households had to adopt negative coping mechanisms by reducing
their food intake. In the case of Jordan, shortages in markets and mobility issues
also appear to be less of a challenge, while reduced food purchases due to increase
in food prices and decrease in household income affected 50 per cent and 54 per
cent, respectively. Among the surveyed households, 39 per cent had to cope with the
effects of the pandemic by reducing their food intake. The picture looks slightly
better for Egypt, where 10 per cent reported having difficulties accessing food
because {p. 162}of mobility restrictions and 21 per cent reported
shortages in the market. Egypt has implemented some export prohibitions on beans and
lentils, expanded cash transfers and increased consumer subsidies to tackle both
availability and access to food (ibidem). However, a share of
43 per cent and 46 per cent of the surveyed households reported a reduction in food
consumption due to price surges and income drops, respectively. Finally, 44 per cent
had to adopt negative coping mechanisms.
Note