WTO Export Restriction of Agricultural Commodities and Its Impacts for G-33 Members

Abstract

The discussion of agricultural Export Restriction (ER) at the World Trade Organization (WTO), which is a mechanism to temporarily stop the export of agricultural product that aims to prevent food shortages in exporting countries has been intensively negotiated. However, as a net importer of agricultural products and the member of G33 countries, Indonesia should address the ER policy because it may have potential to increase prices and threaten food security in domestic market and G33 member countries. This study uses a descriptive qualitative statistical analysis to determine Import Dependency Ratio (IDR) and Self-Sufficiency Ratio (SSR) for five main imported agricultural products by G33 countries such as rice, corn, soybean, wheat, and horticulture. The Computable General Equilibrium (CGE) Analysis using GTAP ver.9 is also used to analyze the potential impact of agricultural product export restrictions for five analyzed products on macroeconomic and sectoral indicators. Based on IDR and SSR it can be concluded that almost all G33 countries heavily rely on wheat imports, as many as 36 countries depend on imported wheat with IDR values varying between 70% -215%. On the other hand, several G-33 countries have a fairly good level of fulfillment of consumption from domestic production (SSR) or more than 80%. Moreover, based on the GTAP calculation on the Indonesia case, export restrictions will have a negative macroeconomic impact on Indonesia. However, in sectoral perspective Indonesian farmers/producers can take advantage of the impact of the export restriction policy as an opportunity to increase their production.