
EMUN 2017
ECOSOC -The question of the export of agricultural surplus by MEDCs
to Africa and the unfair competition it causes on the national markets
2017
ECOSOC – The question of the export
of agricultural surplus by MEDCs to
Africa and the unfair competition it
causes on the national market
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EMUN 2017
ECOSOC -The question of the export of agricultural surplus by MEDCs
to Africa and the unfair competition it causes on the national markets
Index
Introduction ...................................................................................................................... 3
Definition of key-terms ..................................................................................................... 4
General Overview ............................................................................................................ 6
Major parties involved and their views ............................................................................. 9
Timeline of important events/Documents ...................................................................... 11
UN involvement ............................................................................................................. 12
Possible Solutions ......................................................................................................... 13
List of Sources ............................................................................................................... 14
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EMUN 2017
ECOSOC -The question of the export of agricultural surplus by MEDCs
to Africa and the unfair competition it causes on the national markets
Forum: ECOSOC
Issue: The question of
the export of agricultural surplus by MEDCs to Africa and the
unfair competition it causes on the national markets
Student Officers: Nicolás Urdín and Malena Tarrió
Position: Chairs
Introduction
In what refers to economic development, international trade carries vital importance in
almost all aspects. International trade has, throughout the years, been given several
regulations and specifications in between nations that carried out assorted multigovernmental negotiations, these based on public and private sectors, establishing trade
policies with an aim to reach liberalization. But, as is expected with international trade
regulations there have been several challenges as to their implementation and proceeding.
Countries experience discrimination, which is, in most cases, the general factor that makes
all of these implementations possible, since many MEDCs could take advantage of LEDCs if
it weren`t for the agreements. There are also risks of economic liberalization, and the
division of interests of the most developed countries and the less developed countries in
open trade. Other challenges regarding the implementation of the trade policies and rules
require ample deliberation, and exertion towards the enhancement and evaluation of
measures for the advanced implementation on the international trade ambiance. With all the
latter taken into consideration, the United Nations´ Economic and Social Council will be
tackling with fulfilling the aforementioned requirements for a better understanding of
international trade and sustainable economic development in its prospective endeavours.
The ECOSOC will be focusing on agricultural surplus in international trade, the relations
between developed countries and least economically developed African countries and how
different implementations and policies affect the economic condition of both sides as it is.
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EMUN 2017
ECOSOC -The question of the export of agricultural surplus by MEDCs
to Africa and the unfair competition it causes on the national markets
Definition of key-terms
Agricultural Surplus
An agricultural production that exceeds the needs of the society for which it is being
produced, and may be exported or stored for future times. In the case of MEDCs when the
quota of said produce is reached, they might contemplate the idea of exporting it, as it
leaves the country with an additional amount of money.
MEDCs & LEDCs
MEDC, which stands for More Economically Developed Countries, are countries which have
high levels of development based on economic indicators such as GDP (Gross Domestic
Product). These are countries which focus on secondary industries, such as the
manufacturing of products from raw materials.
LEDCs (Less Economically Developed Countries), on the other hand, are countries with
lower levels of development. Countries such as these focus in primary industries, such as
farming, fishing, and mining, providing the raw materials that MEDCs need. Up to date,
there are 48 countries that were designated as less economically developed countries by
the UN.
Supply & Demand
These are the basic principles of economics, and also being the backbone of Market
Economies. Demand is referring to the amount of a product/service that buyers need or
want. Supply, on the other hand, is the amount of product/service that producers introduce
into the market. When the supply and demand curves meet, the place where they do is
known as the equilibrium point, where the amount supplied is the same as the amount
demanded.
Agricultural Subsidies
A subsidy, in economic terms, is the government paying for imported goods so that the
prices of said goods are lower, making them more accessible. Agricultural Subsidies are
subsidies given to small holder farms in order to facilitate the acquiring of equipment, seeds,
and others, and encourage them to produce more, thus increasing the country`s income.
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EMUN 2017
ECOSOC -The question of the export of agricultural surplus by MEDCs
to Africa and the unfair competition it causes on the national markets
Comparative Advantage
This is the term used to refer to the ability of economics actors to supply goods and services
at lower opportunity costs than other suppliers. This concept in economic theory suggests
that all producers can, always, have a mutual benefit by cooperating and trading voluntarily.
Tariffs
Tariffs are the ability of an economy of making their national produce be more accessible
than produce from other countries. These are tax regulations which set taxes for imported
goods high. The governments are left with a gain by this extra money entering the country
because of the surplus charges. Tariffs are thought up with two main aims: tax revenue for
the government and for the protection of national producers against the risk of being
economically dependent to other countries.
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EMUN 2017
ECOSOC -The question of the export of agricultural surplus by MEDCs
to Africa and the unfair competition it causes on the national markets
General Overview
The international trade has a controversial history in means of content, facing with various
ups and downs and reverse of balances both in regulations, agreements and tariffs. The
history of international trade starts with the barter system which is the general exchange of
products from one producer to another without charges, owning or payment, which was
used mainly during the Dark, Feudal, and Medieval ages and is considered the origin of
regulations under the terms of trade. With the rise of scientific economy, the theory in
economics and international trade began to be dominated by Mercantilism, where
governments were open to export, but reductive and limited for importing. Mercantilism was
more of an aggressive theory rather than nationalistic. It was often referred to the economic
version of warfare in general rivalry between nations by using trade economics as a tool for
politic and military purposes. By the end of 18th century, mercantilism began to collapse
whereas nations led the course of events with the rise of a new ideology: liberalization of
international trade.
The ideology of economic liberalism is the freedom in trade, production and capacity, where
the government supports private property sector to run the trade regulations accordingly to
the balance between supply and demand in the economic rules without any restriction made
by a third party. Liberalization carried the international trade out to a new era in means of
economic growth and common understanding in trade regulations. The 19th century
witnessed the freest period of international trade when the international currency for trade
was gold. This currency was easily converted, and establishing businesses and finding
employment was effortless and professionalism dominated the regulations. The course of
international trade changed after the World War I when countries built walls around their
borders for security and protection. This nearly caused the demolition of the fluency of
international trade. The post-war era passed with efforts of reaching normalcy regarding the
trade regulations and the downfall of trade during those past years. On the other hand, the
recession of 1929 has changed the flow of trade once again were countries began to take
protective measures as adopting to raise customs duties and tariffs.
In May 1927, in order to reduce the pressures of economic conditions of countries and
simplify the international trade, a conference called World Economic Conference was held
between nations, organized by the League of Nations. This conference has outcomes
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EMUN 2017
ECOSOC -The question of the export of agricultural surplus by MEDCs
to Africa and the unfair competition it causes on the national markets
regarding new regulations with international trade and created the Multilateral Trade
Agreement. The following events occurring afterwards had resulted with the GATT in 1947.
The GATT was signed with 23 countries and took 9 rounds of meetings and gatherings for
further negotiation upon international trade. However, due to the period’s circumstances and
the modernization of trade both with technologic and scientific development, the
governments were in need of a multinational and institutional body and the discussions
accordingly were held in the Uruguay Round of GATT, where it led to the establishment of
World Trade Organization (WTO).
Agricultural subsidy began to introduce itself to the world in early 1930s, formed by the
implementations of MEDCs upon trade law. The reason why governments have applied this
policy has been the aim to protect the country and its agricultural sector from any potential
damages brought by high prices in import. Subsidies have varied from country to country as
countries had different policies in specification of their trade implementations. All forms have
different impacts on the economy and agriculture. Subsidies were mainly held as;
1. Direct payments to farmers and landlords,
2. Price supports implemented with government purchases and storage,
3. Regulations that set minimum prices by location, end use, or some other
characteristic,
4. Subsidies for such items as crop insurance, disaster response, credit, marketing, and
irrigation water,
5. Export subsidies,
6. Import barriers in the form of quotas, tariffs, or regulations.
African countries, according to historical statistics, just as most of the LEDCs, were mostly
and tremendously affected by the farm subsidy implementations held by miscellaneous
developed countries. At this point, there are two perspectives upon the issue which makes
the question; the supporters of form subsidies and the strict and negative criticism that the
farm subsidies receive.
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EMUN 2017
ECOSOC -The question of the export of agricultural surplus by MEDCs
to Africa and the unfair competition it causes on the national markets
Supporters do defend the policies of MEDCs regarding the subsidies that they believe the
goodwill of them; all in all, the subsidies do decrease the bankruptcy risk, they do stabilize
both the economic condition of the aforementioned countries and the agricultural market that
they have, they do protect the consumer. The controversy lies beneath the fact that
subsidies are a minor problem to the MEDCs, especially when the advantages and
disadvantages they bring to the consumers are considered; however, they are a crucial
issue for the African small-scale agriculture workers.
The farm subsidies are transferred from taxpayers, consumer, or by the direct government
expenditure to the recognized farmers of production. Even though all farmers are officially
producers of the exported commodities, the money that is used as a subsidy is often
transferred to only one class of the society which is the wealthy farmers among the
producers. The subsidized farmers refer to the wealthy landowners that the MEDCs often
relate farm subsidies with them. The social benefit of subsidies is widely questioned as well.
Controversially, they are claimed to cause severe losses in small-scale agriculture. The farm
subsidies are also criticized to cause overproduction in the occasional cases where the
subsidized price goes even further down below the cost of production. Final and one other
utter issue upon the severe contexts of the effects of the farm subsidies is its consequences
upon international trade and how it reflects the flow of international trade by means of
agreements with a special emphasis upon multinational agreements. The subsidy programs
that countries follow as a policy foreclose and complicate the potential multinational trade
agreements that are discussed and proposed under the WTO or as free trade agreements
(FTAs), due to the variety of demands, harsh increase of globalization and failure in
reaching a common ground where all parts benefit for the trade. The negatives and positives
are undeniably analyzed and have certainly reached to realization, however, there are
further points to discuss upon since it is also an undeniable fact that common benefits are
hard to be found.
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EMUN 2017
ECOSOC -The question of the export of agricultural surplus by MEDCs
to Africa and the unfair competition it causes on the national markets
Major parties involved and their views
African Economic Community
The African Economic Community (AEC) is the name given to the organization of the
African Union states dedicated to establishing grounds for a mutual economic development
in between the African states. The goals of this organization are the creation of free trade
areas, customs unions, a single market, a central bank, and a common currency (the last
two goals are also taken care by the African Monetary Union), thus establishing an
economic and monetary union. The pillars of the AEC are the CEN-SAD, the COMESA, the
EAC, the ECCAS/CEEAC (which has the subgroup CEMAC), the ECOWAS (subgroups:
UEMOA, WAMZ), the IGAD, the SADC (subgroup: SACU), and the UMA
United States of America
The US, despite always being a target of claims and appeals of other in their trade relations,
is a leader in both economy and the WTO platform among the international community, as
well as the agricultural market. The US has a different policy with trade where it’s blamed by
most of the countries of which it holds trade negotiations with, as it tries to impose itself in
the decision-making bodies of WTO and the imposing of taxes and tariffs during trades. If
the situation were to consider subsidies, not much would change, as the USA is one of the
countries which have the highest number of subsidies along with the European Union.
World Trade Organization
The WTO is the UN´s institutional body which regulates international trade, and the place
where countries have the opportunity to come to agreements or solve problems that they
face with each other while trading. There is a set of rules, which, among others, include the
reduction of discrimination and legitimacy and trade barriers that occur between countries.
The WTO helps and supports the international trade so that it can liberalize, but not to
overdo that as well, it also deals with the protection of consumers. The WTO also
establishes a common ground for countries carrying economic division; Most Economically
Developed (MEDCs), Developing, and Least Economically Developed Countries (LEDCs).
This common ground was made to share and to hold negotiations without discrimination,
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EMUN 2017
ECOSOC -The question of the export of agricultural surplus by MEDCs
to Africa and the unfair competition it causes on the national markets
economic barriers and to support LEDCs to aid their trade. It was established in 1994, to
replace the GATT.
European Union
The EU, which, as the US, is a most crucial economic bloc, as its GDP was of US$ 16.315
trillion. Just like the US, most of the agricultural produce of the EU is exported to other
countries, especially African countries. The EU-28 accounts for around 15 % of the world’s
trade in goods. The value of international trade in goods significantly exceeds that of
services (by about three times), reflecting the nature of some services which makes them
harder to trade across borders.
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EMUN 2017
ECOSOC -The question of the export of agricultural surplus by MEDCs
to Africa and the unfair competition it causes on the national markets
Timeline of important events/Documents
1947……………………………..Establishment of GATT
1950……………………………..Large agricultural surpluses implemented by United States
1980……………………………..Resolution passed by the UN about the agricultural situation
in Africa
1981……………………………. International Conference of Trade Unions on Sanctions
against South Africa
1990……………………………. Final review and appraisal of the implementation of the
United Nations Programme of Action for African Economic Recovery and Development
1994……………………………..Establishment of WTO
1995……………………………..Agreement on Agriculture
2000..........................................The UN passes several agreements for funding aid missions
in Ethiopia, Eritrea, and Sierra Leone.
2005..........................................UN reaffirms aid to the victims of the 1994 Rwandan
genocide in terms of food and mmedical aid.
2010..........................................There is a reffirmation in cooperation between the United
Nations and the African Union.
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EMUN 2017
ECOSOC -The question of the export of agricultural surplus by MEDCs
to Africa and the unfair competition it causes on the national markets
UN involvement
Establishment of GATT
The General Agreement on Tariffs and Trade was a multilateral agreement regulating
international trade. Its preamble stated that their purpose was the “substantial reduction of
tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually
advantageous basis." It was agreed upon during the United Nations Conference on Trade and
Employment and was the product of a failed negotiation attempt to create the International Trade
Organization. This agreement was signed by 23 nations in Geneva on the 30th October, 1947 and
was effective since January 1st 1948. When during the Uruguay Round Agreements the World Trade
Organization was signed to be created by 123 nations on April 14th 1994, the GATT was disbanded.
1980 resolution of the Agricultural Situation in Africa
During the 36th session of the UN´s General Assembly, an agreement was reached
regarding Africa, since the situation of food and agriculture there had undergone a drastic
deterioration, resulting in a decline of food production per capita and a reduction of dietary
standards below essential requirements. During the same year, the World Food Day was
established, being held for the first time on October 16th 1981, by decree of the Food and
Agriculture Organization.
Establishment of the WTO
This Intergovernmental body had the same objective as the GATT, to regulate international
trade. The WTO officially commenced on 1 January 1995 under the Marrakesh Agreement, signed
by 123 nations on 15 April 1994, replacing the General Agreement on Tariffs and Trade (GATT),
which commenced in 1948. The WTO deals with regulation of trade between participating countries
by providing a framework for negotiating trade agreements and a dispute resolution process aimed at
enforcing participants' adherence to WTO agreements, which are signed by representatives of
member government and ratified by their parliaments. Most of the issues that the WTO focuses on
derive from previous trade negotiations, especially from the Uruguay Round (1986–1994).
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EMUN 2017
ECOSOC -The question of the export of agricultural surplus by MEDCs
to Africa and the unfair competition it causes on the national markets
Possible Solutions
The essential solution of this issue is utterly the reduction of the amount of subsidies;
however, the ECOSOC should remain highly realistic upon the question of the relevant
exports, and should not understate the policies of the MEDCs as well. Ergo, the best
solution upon the issue would be reaching to a common ground by imitating a win-win
situation and if not, create one. However, the committee should firstly accept that reaching a
common ground may be harder as ever before. So we should also be focusing on shorttermed solutions as well –supporting small scale farmers without making them economically
dependent on financial aids but providing them the needs and implementations to avoid the
negative consequences that the subsidies bring to their life. As an example, many people
cannot even afford their basic needs in Africa and even though many implementations have
made progress in achieving the relevant SDGs upon the matter regarding ending poverty
and hunger, the statistics desire a faster and more significant decrease in amounts of
people without access to basic needs. So the humanitarian part should be analyzed and
focused on as well with innovative ideas that could take one more step towards SDG 1 and
2.
Another possible solution is to reach an agreement in which the African Economic
Community, including all of its subdivisions, should reach at an agreement with MEDCs that
wish to export their surplus produce to Africa, in which there were a tax imposed on all
imported agricultural goods, providing they were already harvested, and not including items
such as seeds, tools, and/or machines, to protect the national economies. Such tax would
prove to be acceptable by both parties, with an agreed price for each item, and should any
country wish to adhere to the agreement, there shall be a committee, with representants
from the current members and the countries which wish to become members, to discuss
possible entry terms and to agree, if needed, on a new tax value for the items in question.
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ECOSOC -The question of the export of agricultural surplus by MEDCs
to Africa and the unfair competition it causes on the national markets
List of Sources
https://en.wiktionary.org/wiki/agricultural_surplus
http://www.bbc.co.uk/schools/gcsebitesize/geography/development/contrasts_development_
rev2.shtml
http://www.investopedia.com/terms/c/comparativeadvantage.asp
http://www.independent.co.uk/news/world/europe/eu-wins-right-to-impose-4bn-fine-onunfair-us-exports-175279.html
https://www.vice.com/en_uk/article/american-lobbyists-are-fighting-to-halt-the-availability-ofaffordable-medicine-to-the-3rd-world
http://www.alternet.org/rss/breaking_news/98942/us_says_'playing_leadership_role'_at_wto
http://www.un.org/en/ga/search/view_doc.asp?symbol=A/RES/35/69
https://en.wikipedia.org/wiki/African_Economic_Community
http://www.econlib.org/library/Enc/AgriculturalSubsidyPrograms.html
https://en.wikipedia.org/wiki/General_Agreement_on_Tariffs_and_Trade
http://freakonomics.com/2008/07/24/the-illogic-of-farm-subsidies-and-otheragriculturaltruths/https://globalawareness1212.wordpress.com/what-is-ledc/
http://www.ictsd.org/downloads/2012/08/changing-perspectives-small-scalefarmersmarkets-and-globalisation-murphy-iied.pdf
http://www.investopedia.com/terms/c/comparativeadvantage.asp
http://www.jstor.org/stable/4403965?&seq=1#page_scan_tab_contents
http://www.ncpa.org/pub/ib126http://www.ngopulse.org/article/small-scale-agriculture
http://www.theguardian.com/global-development/poverty-matters/2013/nov/27/farmingsubsidies-distort-advantages-food-insecurityhttp://www.ucsusa.org/sites/
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ECOSOC -The question of the export of agricultural surplus by MEDCs
to Africa and the unfair competition it causes on the national markets
default/files/legacy/assets/documents/global_warming/
UCS_DriversofDeforestation_Chap9_Small-scaleFarming.pdf
http://www.alternet.org/rss/breaking_news/98942/us_says_'playing_leadership_role'_at_wto
adresinden alınmıştır
http://www.bbc.com/news/uk-politics-21703018
https://www.wto.org/english/thewto_e/whatis_e/tif_e/dev1_e.htm
https://www.wto.org/english/tratop_e/agric_e/ag_intro01_intro_e.htm
http://thediplomat.com/2013/02/china-america-and-the-wto/
//www.wto.org/english/docs_e/legal_e/14-ag_01_e.htm
http://www.fao.org/docrep/w7814e/w7814e07.htm
http://data.worldbank.org/region/european-union
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