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SENEGAL. A conference room: Stakeholder engagement is key for addressing food security.
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The State of Agricultural Commodity Markets 2024

Part 5 STRENGTHENING POLICY COHERENCE FOR TRADE AND NUTRITION

Key messages
  • Governments can implement trade policy measures to address nutrition objectives. WTO rules do not constrain the policy space to pursue these objectives, but they influence the choice of the policy instrument, including ensuring that there is no discrimination between like products of different foreign and domestic origin.
  • Policy instruments, as for example excise taxes on sugar-sweetened beverages, can be effective in addressing nutrition objectives. They apply to both imported and domestically produced foods and beverages.
  • Food labelling conveys the nutritional characteristics and attributes of food products to consumers and can improve diets and health. Discussion in the WTO Committee on Technical Barriers to Trade can ensure that food labelling promotes healthier food choices and facilitates trade.
  • Strengthening policy coherence between trade and nutrition can address the economic, social and health dimensions of sustainable development. Building capacities among trade policymakers and nutrition officials is key to prioritizing nutrition and fostering collaboration.
  • Promoting the engagement of all stakeholders, especially those related to nutrition and public health, and increasing transparency in negotiations for deeper trade agreements can ensure that increased trade will address food security, economic and nutrition objectives.

Domestic support, trade policies and nutrition

Agricultural policies address a broad array of issues, but ensuring food security and nutrition sustainably, and maintaining a level of farm income that keeps pace with the income trends in other economic sectors, are key objectives across both developed and developing countries. In a country, agricultural trade policy and domestic support create a set of incentives and disincentives that can affect food production and consumption, food prices and thus farm incomes and consumer expenditure on food.

Countries provide various types of domestic support to farmers, ranging from direct payments that contribute towards maintaining farm incomes, to subsidies for inputs such as fertilizers, electricity and water. Other forms of domestic support include the provision of services on research and development, and extension, which often address market failures such as constraints faced by farmers in adopting new technologies. Market price support measures create a gap between domestic market prices and border prices of a specific agricultural product. For example, public stockholding programmes combined with trade measures use domestic procurement to stabilize prices within a predetermined range, constituting market price support.224

Trade policies include import tariffs and non-tariff measures (NTMs) as well as export restrictions and export taxes. For example, tariffs can be used to protect local farmers from international competition to promote domestic food production. NTMs include SPS measures that ensure food safety and protect animal or plant health and TBT measures such as labelling that relate to objectives such as nutrient content, environmental protection, labour health and safety, and prevention of deceptive practices.

Both domestic support and trade policy instruments are subject to the WTO rules and disciplines. For example, the WTO Agreement on Agriculture (AoA) places a limit on the use of several domestic support measures while regulating import tariffs that are subject to maximum binding levels that cannot be exceeded by applied tariffs. The Agreement on Technical Barriers to Trade and the Agreement on the Application of Sanitary and Phytosanitary Measures, many of which apply to food, ensure that while the need to constrain trade may arise, any measures taken should not be applied in an arbitrary or discriminatory manner or act as a disguised restriction on international trade.

The WTO disciplines create a transparent and predictable system of international trade rules that promotes competition by minimizing trade distortions and discouraging unfair practices. The AoA includes provisions on market access, domestic support and export competition, and it has encouraged the use of less distorting measures, including the use of support measures with no, or at most minimal, trade-distorting effects such as payments decoupled from production or non-targeted subsidies and a reduction in agricultural import tariff rates (see Box 5.1).

BOX 5.1The Agreement on Agriculture

The World Trade Organization (WTO) Agreement on Agriculture (AoA) is the main legally binding document regulating food and agricultural trade globally and contains disciplines in three main policy areas:

  • Market Access, setting the conditions under which food and agricultural products can access the markets of WTO members;
  • Domestic Support, referring to the support provided to farmers under government programmes; and
  • Export Competition, referring to subsidies and other payments that serve to expand exports.

Other provisions in the AoA deal, inter alia, with the institution of export prohibitions and restrictions on foodstuffs.

Market Access, as per the AoA, prohibits border measures other than ordinary customs duties. According to Article 4.2 of the Agreement, the measures that are prohibited include quantitative trade restrictions, variable import levies, minimum import prices, discretionary import licensing, non-tariff measures maintained by state trading enterprises, voluntary export restraints and similar border measures other than ordinary customs duty. However, Article 4.2 of the AoA does not forbid the use of import restrictions, consistent with the WTO agreements, which are applicable to general trade in goods, including food and agricultural products. Such measures include those falling under the WTO Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT) Agreements.

Domestic Support provisions of the AoA seek to limit the trade distortions caused by domestic agricultural support policies. While the AoA allows WTO members to use subsidies, in derogation from the WTO Agreement on Subsidies and Countervailing Measures, it also introduces commitments intended to curb these policies. In this regard, the AoA classifies the support measures into two basic categories: those that can be used without any limitation; and those that are subject to ceiling commitments and can be used provided that upper support limits are respected. The first category includes:

  • measures that are considered to have no or minimal impact on trade and production and are included in Annex 2 of the AoA (also known as Green Box measures). These include public expenditures on general services (such as research and development, or marketing and promotion services), government spending on public stockholding for food security purposes and on domestic food aid, and direct payments to producers such as income support that is decoupled from production.
  • specific measures taken by developing countries that are an integral part of their development programmes and encourage rural development. These are outlined in Article 6.2 of the AoA (the so-called, “Development Box”) and include, for example, agricultural input subsidies generally available to low-income or resource-poor producers.
  • measures that require farmers to limit their production, thus limiting production distortions. These are included in Article 6.5 of the AoA (the so-called Blue Box).

The second category includes all the measures that do not meet the exception criteria as above and are often referred to as Amber Box (Article 6 of the AoA). The ceiling commitments are based on the Aggregate Measurement of Support (AMS) concept, which is calculated for each basic agricultural product (product-specific AMS) as well as for support in favour of producers in general (non-product-specific AMS). Support, measured in terms of the share of the Value of Production that is below a specific threshold, either product-specific or non-product-specific, is excluded from the AMS calculation under the de minimis rule (Article 6.4 of the AoA).

The Export Competition pillar refers to subsidies that serve to expand exports. The 10th WTO Ministerial Conference, held in Nairobi, Kenya in December 2015, agreed on a Decision on Export Competition that foresaw the elimination of export subsidies in different timeframes for developed and developing countries. Prior to the Nairobi Decision, the AoA did not totally ban export subsidies but did introduce constraints on such policies by imposing ceilings both on expenditures and on the quantities of agricultural exports subsidized.

Finally, Article 12 of the AoA, contains provisions concerning the use of export prohibitions and restrictions on foodstuffs. The AoA requires members who consider imposing new export restrictions to give due consideration to the effects of these measures on the food security of importing members. The AoA also requires members to give an advance notice to the Committee on Agriculture and to consult with affected members if so required. These rules apply to developing countries only in so far as they are net exporters of the foodstuff in question.

NOTE: See The Agreement on Agriculture. https://www.wto.org/english/docs_e/legal_e/14-ag_01_e.htm

Central to WTO agreements is the principle of non-discrimination, aimed at ensuring the fair and equitable treatment of all trade partners. This prohibits discrimination between like products of different foreign origins (Article I of the General Agreement on Tariffs and Trade [GATT]), as well as between like products of foreign and domestic origin (Article III of GATT). Often, WTO rules, and especially the principle of non-discrimination, are seen by many public health experts as constraining the policy space that is available to address nutrition objectives, especially through the use of trade policy instruments.225, 226

Domestic support and nutrition

Domestic support measures can impact nutrition directly, through their effects on food production. In a country, distortive domestic support can affect the quantities of foods produced, the diversity of production and food prices and, therefore, is an important determinant of how much and what foods are available for consumption. Market price support, which together with border measures, create a gap between domestic market prices and border prices of a specific agricultural product, payments based on output, and payments based on the unconstrained use of variable inputs are among the most distortive types of domestic support.

On average, distortive forms of support are also prevalent in emerging economies. Data from the Organisation for Economic Co-operation and Development (OECD) suggest that, in 2020–2022, for 11 emerging non-OECD economies included in the estimation of support, 10 percent of gross farm receipts were generated by distorting policies, as compared to 7 percent in OECD countries (Figure 5.1).

FIGURE 5.1Potentially most distorting transfers and other support by country, 2020–2022 (percent of gross farm income)

Horizontal bars show that most high-income countries and emerging economies provide various types of support to farmers. Some countries provide relatively more market price support, while others resort to different types of domestic support. Some emerging economies also tax agriculture.
NOTES: The graph shows policy-induced transfers to farmers from taxpayers and consumers as a percentage of gross farm receipts. It includes all Organisation for Economic Co-operation and Development (OECD) countries, non-OECD European Union Member States, and the emerging economies. The producer support estimate measures all transfers to agricultural producers. Market price support arises as a result of domestic or trade policies that raise or lower domestic market prices such as border tariffs, export taxes and price ceilings or floors. Other potentially most distorting support includes payments based on output, are payments made to farmers per unit of production and payments based on use of variable inputs such as subsidies on the use of fertilizer, electricity, animal feed or credit. Other support includes a range of policies that varies across countries such as payments made to subsidize the acquisition of farm equipment, land or breeding stock, payments to reduce the cost of on-farm services such as technical, accounting, commercial, training and sanitary or phytosanitary assistance, or payments can be based on variable input use, but with constraints, limits or restrictions.

SOURCE: Adapted from OECD. 2023. Agricultural Policy Monitoring and Evaluation 2023: Adapting Agriculture to Climate Change. Paris, OECD Publishing. https://doi.org/10.1787/b14de474-en

Countries differ in how support is provided. Some high-income countries such as European Union Members and the United States, provide a large part of domestic support through direct payments that result in minimal distortions on production. Other high-income and middle-income countries such as Norway, the Republic of Korea and the Philippines implement market price support measures and payments based on production output (Figure 5.1).

At the same time, many emerging economies tax agriculture. For example, while India provides high levels of payments to farmers for the use of inputs, national and state-level agencies operating on behalf of the Food Corporation of India can procure wheat, rice and coarse grains at minimum support prices, which suppresses the domestic prices of these foods relative to global market levels, resulting in negative market support to the benefit of the consumers (Figure 5.1). China provides almost all its support to the sector in the form of positive market price support.227

Domestic support measures are often food specific and can promote the production of certain foods relative to others. Globally, the highest levels of support are observed for rice, maize, sugar and meats (Figure 5.2).228 Such food-specific support can lead to increased production and lower prices of these foods relative to others, aiming at increasing availability and ensuring food security. For example, in China, the combined production of rice, wheat and maize grew by nearly 38 percent between 2005 and 2015 as a result of support.229

FIGURE 5.2Support to specific commodities, 2020–2022 (percent of gross farm income)

Horizontal bars show the distribution of commodity-specific domestic support in many high-income countries and emerging economies. On average, sugar, maize, and rice receive most market price support. Some commodities are also taxed, including milk, oats, and sunflower. In some countries, eggs are strongly supported, in others they are taxed.
NOTES: The graph shows policy-induced transfers to farmers from taxpayers and consumers as a percentage of gross farm receipts. It includes all Organisation for Economic Co-operation and Development (OECD) countries, non-OECD European Union Member States, and the emerging economies shown on Figure 5.1.

SOURCE: Adapted from OECD. 2023. Agricultural Policy Monitoring and Evaluation 2023: Adapting Agriculture to Climate Change. Paris, OECD Publishing. https://doi.org/10.1787/b14de474-en

Domestic support can have significant economic impacts on agricultural markets, altering prices and production levels, thus affecting incentives for farmers and consumers and leading to market distortions. Food-specific support can result in a misallocation of resources, as farmers may choose to produce supported foods instead of those for which they have a comparative advantage. This may affect the composition of food production towards the foods that are supported, reducing food diversity and impacting relative prices. As distortive support is mainly targeted on food staples, meat and sugar and not on fruits and vegetables, it is often seen as having negative implications for nutrition (see Figure 5.2 and Box 5.2 on repurposing support to food and agriculture).

BOX 5.2Repurposing support to food and agriculture

Some agricultural support policies have increased global food production, particularly of staple crops, contributing towards food security. However, there are serious concerns about their role in promoting sustainable, healthy and efficient agrifood systems. Agricultural support largely targets staple foods, dairy and other animal source protein-rich foods, especially in high- and upper-middle-income countries, while fruits and vegetables are less supported overall or even penalized in some low-income countries.287

Several recent studies have recommended that “repurposing” agricultural support towards investments and incentives that encourage the sustainable production of more diverse and traditional crops that are rich in nutrients and better adapted to environments can significantly contribute towards the economic, environmental and social dimensions of sustainable development. Repurposing existing fiscal subsidies to producers, which are based on factors of production, and other subsidies decoupled from production towards nutritious foods could have nutritional benefits. That is because under-investment in agricultural research and development has been particularly significant for non-staple nutritious crops such as fruit and vegetables, and under-investment in rural infrastructure, particularly transport and storage, differentially impacts perishable nutritious foods.

A recent simulation exercise indicated that if existing global subsidy budgets (USD 233 billion globally in 2017) were more evenly distributed across countries and directed towards nutrition-sensitive and low-greenhouse gas emitting food commodities (vegetables, fruits, legumes and nuts), the consumption of fruits and vegetables could increase by 10 percent in the Organisation for Economic Co-operation and Development (OECD) countries and 5 percent in non-OECD countries, resulting in health benefits.288

Similarly, an analysis undertaken by FAO and other international organizations that estimated the impact of repurposing price incentives through border measures and market price support to promote healthy diets, found that there would be a 0.64 percentage point increase in the proportion of the global population for whom a healthy diet is affordable. The move towards less costly and more affordable healthy diets is accompanied by a decline in global agricultural production that, in turn, is reflected in lower greenhouse gas emissions in agriculture. However, it is critical that repurposing is also accompanied by investments in resources (including skills and human capital) to ensure that farmers, particularly small-scale farmers, women and youth, can switch to specialize in these more nutrient-rich and environmentally appropriate crops.289

SOURCE: Adapted from Thow, A.M. (forthcoming). Note on the impacts of domestic support and trade policy instruments on nutrition – Background paper for The State for Agricultural Commodity Markets 2024. Rome, FAO.

Input subsidies, especially in low- and lower-middle-income countries, can lead to lower production costs and subsequently lower prices could benefit consumers by making food more affordable and accessible. There is some evidence that, in low- and lower-middle-income countries, subsidies for fertilizers and seeds have been shown to have a positive impact on nutrition. The key pathway of impact appears to be increased food production and, in some cases, food production diversity. If targeted to nutrient-rich foods, subsidies can support improvements in nutrition by increasing food availability and promoting dietary diversity.

In sub-Saharan African countries, input subsidies for fertilizer and seeds have increased the volume and diversity of agricultural production, and subsidies for legume seeds, in turn, increased dietary diversity.230, 231 For example, in Malawi, the input subsidy programme, which provided farmers with vouchers for seeds and fertilizer, resulted in an increased consumption of maize and legumes, leading to improvements in dietary diversity and child nutrition.232 The Mali fertilizer programme, targeting rice, maize, millet and sorghum, was associated with a higher likelihood of an adequate diet among women plot managers.233 However, household consumption is influenced by multiple factors. For example, fertilizer subsidies in Mali were positively associated with dietary diversity in one region, but negatively associated in another region where fertilizer use for cash cropping has been suggested to result in less fertilizer use for food, thus undermining food security.234

The combination of public stockholding and public distribution to support the food price stability of staple foods has been analysed in Ghana and India, as well as more broadly for developing countries.235, 236 These programmes can promote food security where there are high rates of malnutrition, as a complement to social welfare measures. Their nutrition impacts could depend on which foods are targeted. For instance, in India, the public distribution system has been expanded under the 2013 Food Security Act to include the administered prices and distribution of other crops, including legumes. This expansion has had positive implications for dietary diversity and nutrition.237

Tariffs, non-tariff measures and nutrition

Over the past two decades, tariffs have declined substantially.238 Tariff reductions are associated with decreases in consumer prices, which can contribute to increased food consumption and improved nutritional outcomes depending on which foods are subject to these tariff reductions and on how consumers respond to them.239, 240 For instance, additional trade costs associated with Brexit in the United Kingdom of Great Britain and Northern Ireland were estimated to increase the price of foods, leading to a decrease in energy intake from fruit and vegetable consumption of 15 kcal per person, per week. However, analysis suggests that eliminating tariffs on fruits and vegetables could mitigate this effect.241 In the Pacific, tariffs on fruits and vegetables not grown in Fiji were reduced in 2012 from 32 percent to 5 percent specifically to promote healthier diets.242

Nevertheless, in Canada, during the period 1976–2006, tariff reductions and changes in non-tariff measures due to the North American Free Trade Agreement (NAFTA) led to an increased supply of caloric sweeteners, particularly high-fructose corn syrup, equivalent to over 40 kcal per capita per day.243 Another study suggests that, for low- and middle-income countries, a 1 percent reduction in tariff rates on sugar, confectionery products, fats and oils was correlated with an increase of 0.3 in BMI.244 In 2012, Fiji increased the tariff on palm oil from 15 to 32 percent to reduce consumption and lower the population’s saturated fat intake, however, there are no studies assessing the impact.245

In general, there is limited evidence to date for nutritional benefits from tariff changes. It is difficult to identify the impact of import tariff changes on nutrition. Most of the studies report association rather than causality between tariff changes, food availability and nutritional outcomes without taking into consideration other nutrition transition drivers or the context within which tariff changes are applied. For example, if primary products such as sugar are subject to a tariff increase, the likely direct effect on nutrition may be limited. A large part of the sugar supply is used as an input in the production of processed and ultra-processed foods, and the impact of the tariff increase on their retail prices will be proportional to the sugar content (see Part 3 on the impact of trade barriers on food prices). At the same time, a tariff increase on soft drink imports may benefit the domestic industry, which can scale up soft-drink production, lower domestic prices and contain the effect of the tariff on consumption.

NTMs are policy measures, other than ordinary customs tariffs, that can potentially have an economic effect on trade in goods by changing quantities traded, or prices or both. NTMs relevant to nutrition include standards and technical regulations that place requirements on traded foods. For example, fresh fruit and vegetables but also ultra-processed foods are often subject to NTMs in the form of SPS measures, which can act as barriers to trade due to high compliance costs. However, SPS measures are vital in providing appropriate information on the sanitary characteristics of a product and ensuring food safety, which is critical for nutrition.246 Other NTMs relevant to nutrition include TBT measures such as food labelling that provides information on nutritional characteristics and attributes of food products (see next section on nutrition labelling).

The impact of NTMs on the food trade is context-dependent. They can either facilitate or impede trade.247 NTMs can limit food trade through increased trade costs resulting from compliance, affecting diet affordability and diversity. At the same time, they can also expand trade as they strengthen the demand for a product through better information (see also Part 4). Regulations on NTMs under the Agreement on Technical Barriers to Trade and the Agreement on the Application of Sanitary and Phytosanitary Measures, many of which apply to food products, must be supported by scientific evidence and should follow good regulatory practices.

To ensure that regulations do not create unnecessary barriers to trade, both agreements strongly encourage WTO members to use international standards, guidelines and recommendations as the basis for their measures. Modern RTAs go beyond market access and tariff reductions and aim at deeper trade integration, focusing on harmonizing NTMs and domestic regulations. Deeper trade agreements can reduce trade costs related to compliance with multiple and different standards and facilitate trade among signatories (see also Part 4 on the impact of SPS and TBT measures and their harmonization on food trade).248

Recent RTAs include extended TBT and other provisions related to nutrition labelling. In 2018, the agreements between the United States, Mexico and Canada, which replaced the North American Free Trade Agreement, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, both include extended coherence provisions for TBT measures.249, 250 Among trading partners, there have been important efforts toward harmonization in labelling. For example, European Union Members have harmonized their labels by adopting Regulation 1169/2011 on the provision of food information to consumers. In Latin America, MERCOSUR, a common market including Argentina, Brazil, Chile, Paraguay, the Plurinational State of Bolivia and Uruguay, developed a joint regulation on food labelling that is included in each country’s national law.251

WTO agreements, which discipline domestic support and trade barriers, as well as RTA provisions, which include tariff reductions and NTM-related provisions, promote trade by making it freer and more predictable. One of the most fundamental rules of the WTO, the principle of non-discrimination, results in less distorted global markets. However, there are concerns that WTO rules and RTA provisions impose potential constraints on the ability of a government to pursue nutrition policies to achieve its own national goals – the policy space available for nutrition. These constraints are seen to arise from the application of WTO trade rules and principles, including that of non-discrimination, but also from the regulatory coherence provisions in RTAs with respect to the policy instruments that are applied to achieve nutrition objectives.252, 253

Samoa: Quantitative import restriction on turkey tails to excise tax and import tariffs

For instance, in 2007 Samoa implemented a ban on imported turkey tails – an inexpensive fatty meat – in response to concerns regarding high rates of NCDs. A 2008 survey found that in response to the ban, less than half of consumers switched to other more affordable meats such as chicken cuts, sausage or mutton about a quarter opted for healthier options such as fish, and some reduced their consumption of meat.254

During the accession process of Samoa to the WTO, some members raised concerns regarding the compliance of this measure with the WTO Agreement on Agriculture, which prohibits the use of import restrictions, including import bans. Moreover, its compliance with GATT Article XX was also raised. Some members argued that while this article allows for measures to protect human health to be taken as an exception, its preamble stipulates that this should not be a disguised restriction to international trade. They argued that the import ban only on turkey tails is discriminatory as it does not apply to all foods with high-fat content.255

As part of the Government of Samoa’s WTO accession agreement, implemented in 2011, the ban was removed and replaced with a 300 percent import duty as an interim measure. The Agreement also included the commitment to conduct a study on policy options that aim at improving nutrition. Following the study, in 2018, Samoa imposed a 10 percent excise tax on fresh and chilled turkey tails. The import duty was set at 20 percent, in addition to the 15 percent value added goods and services tax. In 2019, the tariff on frozen turkey tails imports was set at 100 percent.ae, 256

Tonga: Sugar-sweetened beverages import tariffs to excise tax

In 2013, Tonga replaced a 15 percent import tariff on sugar-sweetened beverages with an excise tax at TOP 0.50 per litre, a rate that increased to TOP 1.50 in 2017 (see Box 5.3 on fiscal measures such as taxes on saturated fats and sugar-sweetened beverages). According to one study, import volumes of sugar-sweetened beverages declined, perhaps due to the need to develop capacity in the implementation of the tax. The excise revenue collection did not start for domestically manufactured sugar-sweetened beverages until later.257 As a result, local soft drinks sales increased by 20 percent in 2016.258 Although the share of the domestic industry in sugar-sweetened beverages was very small, about 5 percent of total sales, this demonstrates that trade policy instruments, in this case the excise tax that was applied only on imports, although aimed at improving nutrition provided protection to the local food processing sector to scale up production, thus weakening the effectiveness of the policy.

BOX 5.3Fiscal measures: Taxes and subsidies to promote healthier food choices

The affordability of food is crucial in influencing nutritional choices. Fiscal policies such as taxes on energy-dense foods high in fats, sugars and/or salt and subsidies for nutritious foods are recommended to encourage healthy diets. These policies aim to enable the consumer to opt for the consumption of healthy diets by making energy-dense foods high in fats, sugars and/or salt more expensive through taxes and making nutritious foods more affordable through subsidies.290

From a public health standpoint, excise taxes are generally preferred over sales taxes and value-added tax (VAT). This is because excise taxes are specifically applied to certain products, making them less affordable compared to other products. On the other hand, VAT and sales taxes typically apply to a wide range of goods and services and do not impact the relative pricing of the product.291

Imposing taxes on energy-dense foods and drinks high in fats, sugars and/or salt could lead to positive changes in dietary habits. Health-related food taxes are relatively rare, primarily due to the political and administrative challenges of implementing them, as well as the difficulty in predicting consumer behaviour changes. In 2011, Denmark introduced the world’s first tax on saturated fat. After the policy was implemented, there were significant price changes such as a 20 percent increase in the price of a standard pack of butter. Despite being in effect for only 15 months, the tax led to a 4 percent reduction in saturated fat consumption and increases of 7.9 percent and 3.7 percent in the consumption of vegetables and fibre, respectively.292

However, in recent years, there has been a growing momentum in favour of implementing taxes on sugar-sweetened beverages with the goal of reducing their consumption. Between 2017 and 2019, the percentage of World Health Organization (WHO) members implementing such taxes rose from 23 percent to 38 percent. A systematic review revealed that a tax on sugar-sweetened beverages could effectively reduce their consumption, as well as decrease the prevalence of overweight and obesity. The impact of such a tax would be greater if it were higher, applied per beverage volume, and covered all types of sugar-sweetened drinks.293

Implementing fiscal policies to promote healthy diets – whether through introducing a new tax or subsidy or increasing the rate of an existing tax – can be challenging. However, monitoring and evaluation are crucial for understanding the effectiveness of fiscal policies in promoting healthy diets.

Ghana: Using food standards to curb the availability of fatty meats

In the 1990s, Ghana – a WTO member since 1995 – as a response to concerns about the low quality and high fat content of imported meats, particularly turkey tails, introduced food standards mandating maximum percentages for fat in meat cuts such as poultry, beef, mutton and pork. Such standards do not violate the WTO principle of non-discrimination as they do not discriminate between imports and domestically produced meats and apply to the main types of meat available.259 The measure has been reported in WTO Trade Policy Reviews as both a TBT and SPS measure, likely since it employs food standards but with an objective to address NCDs rather than food safety.260

Mexico: Tax on sugar-sweetened beverages

Taxes on sugar-sweetened beverages have been widely adopted and have been found to be effective in reducing consumption.261 A tax on sugar-sweetened beverages proposed by Mexico in 2006 was challenged at the WTO on the basis of discrimination, as it was limited to only beverages containing sweeteners other than cane sugar (which include beet sugar and high-fructose corn syrup, both of which are largely imported). The selection of this limited target was deemed inconsistent with the evidence regarding the impact of sugar and sugar-sweetened beverage consumption on health. The dispute was upheld and the tax was removed.262

Policy space for nutrition measures

In general, WTO rules do not constrain the policy space of countries to pursue nutrition objectives. Within this policy space, WTO’s trade rules have resulted in the evolution of policy instruments, as for example from import quantitative restrictions to import tariffs or from border measures to excise taxes or food standards. The WTO agreements recognize the importance of non-economic objectives, notably through Article XX of GATT on General Exceptions, which allows members to take all necessary measures “to protect human, animal or plant life or health.”af However, these measures may not be applied “in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade.”ag

Ghana’s policy choice to implement food standards related to fat in meat is compliant with the principle of non-discrimination, as these standards are applied uniformly to domestically produced and imported cuts of meat containing high levels of fats, while at the same time address concerns about human health.

The standards were developed by the Ghana Standards Authority, while the Ministry of Health played a key role in identifying their need. The percentages of fat given in the standards were based on the association of high-fat meat consumption with NCDs, particularly cardiovascular disease, and the threshold levels for what constitutes “high-fat” were derived from an analysis of the fat content of local and imported meats (carcasses and cuts of pork and beef shall contain no more than 25 percent fat, poultry no more than 15 percent fat and lamb no more than 30 percent fat).263

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