Mediterranean Economies 2023
DOI: 10.1401/9788815411167/c5
Figure 3 depicts the share of trade
in food in total merchandise trade in selected MENA economies. On the exports side,
Morocco has the highest share of food exports in total merchandise exports (23.1 per
cent), followed by Palestine (21.2 per cent), Lebanon (19.6 per cent), and Egypt (18.1
per cent). Despite the high prevalence of food insecurity in these countries, the share
of food exports in total merchandise exports is higher than the same average in low-and
middle-income countries (10.4 per cent), and the share of the MENA region altogether
(3.8 per cent). These exports are mainly exports of fruits and vegetables [Keulertz and
Byiringiro 2022]. In contrast to these south Mediterranean economies, higher income
countries in the region such as Israel, Saudi Arabia, and other Gulf countries have
negligible shares of total merchandise exports that are concentrated in food exports.
¶{p. 151}
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Before 2008, declining food prices
encourages MENA countries to increasingly rely on food imports. When food prices spiked
in 2007-2008, many MENA countries tried to increase their self-sufficiency from local
food production to reduce their volatility to global shocks [Christoforidou et
al. 2022]. However, while all countries in the region are net importers
but at different level, the MENA region remains globally one of the most food-import
dependent regions in the world [Keulertz and Byiringiro 2022]. Politically unstable
countries like Yemen and Palestine depend heavily on food imports, which represent more
than one third of their total merchandise imports. This share is lower in other
countries in the region, ranging from 23.9 per cent in Jordan to as low as 10.5 per cent
in Tunisia. The MENA average share of food imports in total merchandise imports (13 per
cent) is higher than the same share in low-and middle-income countries (9.4 per cent).
At the same time, MENA’s share of food exports in total merchandise exports (3.8 per
cent) is significantly lower than the same share for low-and middle-income countries
(10.4 per cent). The comparison of both shares gives a preliminary idea of the MENA
economies relatively modest food exports performance compared to their growing needs to
import food.
3. How does trade policy in MENA countries affect food security?
3.1. Tariffs on Agriculture
Figure 4 depicts the
correlation between tariffs on agriculture and food security in MENA countries.
Using data from FAO and the World Development Indicators, our findings suggest a
positive association between tariffs and the prevalence of moderate and/or severe
food insecurity. Indeed, tariffs are harmful to food security as they raise the
price of imported food, making it less affordable. The consequences of restrictive
trade policies on national welfare extend beyond typical price and quantity effects.
Trade restrictions, such as tariffs, provide artificial protection to domestic food
suppliers, and result into a domestic food price-quantity (and quality) combination
that is worse than that under free trade. On the one hand, domestic resources are
allocated inefficiently towards the production of specific food varieties that
¶{p. 153}enjoy protection, while in the case of trade
liberalization, these resources could be more efficiently used in other sub-sectors.
On the other hand, consumers see their welfare reduced as they must spend a larger
sum on food that could have been imported at cheaper prices. Hence, the real income
of consumers declines.
¶
Second, tariffs reduce the
quantity of food imports, hence affect the availability and the variety of food in
the domestic market, which has potentially negative implications on the quantity and
nutritional content and can have severe health implications. Moreover, restrictions
on the imports of food increases domestic food price volatility, should any local
shocks take place.
Third, tariffs can have an
adverse impact on the imports of seeds, inputs, and equipment used in agriculture.
This undermines productive capacities and potential for innovation in crops and
farming techniques and reduces the available quantities and varieties, with
potentially dangerous implications for food security.
3.2. Non-Tariff Measures
Tariffs are not the only trade
policy tools that could be used to restrict imports. Globally, tariffs were
substantially reduced over the past three decades. However, non-tariff measures
(NTMs) are an alternative tool often excessively used by authorities to protect the
domestic market from foreign competition. NTMs have more adverse effects on food
security, given that these are substantially costly, compared to tariffs. NTMs
include all policy measures (excluding tariffs and tariff-rate quotas) that can have
an impact on international trade, such as sanitary and phytosanitary (SPS) measures,
technical barriers to trade (TBT), quotas, and import licensing. SPS measures are
designed to protect human, plant, and animal health against potential risks
contained in imported food (such as bacterial contamination or excessive
pesticides). TBT are measures that relate to mandatory and voluntary technical
regulations and standards that imports should comply with (such as size, shape,
labeling, packaging, etc.).
Figure 5 illustrates the
ad-valorem equivalents of TBT and SPS measures imposed on imports by some countries
in the MENA region. The ad-valorem equivalent of NTMs is the estimated impact on the
price of imports that is equivalent to ¶{p. 155}a tariff. For TBT,
the highest ad-valorem equivalent is found in Lebanon (equivalent to a tariff rate
of 85 per cent). Such a figure is chiefly due to certification and testing
requirements that are imposed on vegetable, animal and food products. This is higher
than the world average, which is currently at 66.7 per cent. Other countries such as
Jordan, Oman, and Morocco also impose relatively costly NTMs that are equivalent to
over 50 per cent tariff rate. Interestingly, the ad-valorem equivalent of TBT in
Qatar is negative (–42.1 per cent), meaning that the country subsidizes imports by
nearly 42 per cent of their price.
As for SPS measures, the world
average of the ad-valorem equivalent stands currently at 45.9 per cent. Out of 12
MENA countries, 7 countries have a higher-than-average ad-valorem equivalent. These
include some of the most food insecure countries in the region, such as Lebanon,
Jordan, and Morocco.
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}
Note