PARIS – The United States and the European Union are looking at how to improve food supply chains, exacerbating global problems with export restrictions from India and other countries, the EU’s head of commerce told CNBC.
G-7 foreign ministers warned over the weekend that the war in Ukraine was increasing the risk of a global hunger crisis. This is because Ukraine has been unable to export grain, fertilizer and vegetable oil, while conflict is destroying crop fields and disrupting a normal planting season.
This has increased the dependence on countries in other parts of the world for these products. However, some of these countries, concerned about the supply of their own citizens, have imposed restrictions on exports. This is the case in India, for example, which on Saturday banned the sale of wheat “to manage the overall food security of the country”.
“This is something that is very worrying,” EU trade chief Valdis Dombrovsky told CNBC on Sunday.
“We have agreed with the United States to co-operate and coordinate our views in this area, because … in response to Russia’s aggression against Ukraine and similar rise in food prices and concerns about food security, countries have begun to restrict export.” Let’s face it – this is a trend that could really exacerbate the problem, “said Dombrowski.
He added that measures such as Indonesia’s ban on palm oil exports “make matters worse.”
Restrictions on exports can push up commodity prices, and therefore food costs. For the EU, it’s a matter of food capacity, Domrovsky explained.
The United States and the European Union are due to hold talks in France on Monday for a joint trade and technical council, or TTC. The group was reunited in 2021 to restore transatlantic relations after Trump-era trade tariffs and disagreements.
However, TTC’s work has now shifted beyond its objective focus, such as the lack of semiconductors, to include and find solutions to current geopolitical problems.
Its first meeting, in late 2021, was overshadowed by the US agreement to sell nuclear submarines to Australia – where Canberra decided to cancel a trade deal with France, annoying European officials. Now, its second assembly is working on a supply push in the wake of Russia’s unprovoked attack on Ukraine.
Speaking to CNBC on Sunday, Margaret Vesteger, head of European competition, said she had never thought the TTC would discuss sanctions against Russia.
“I did not anticipate it coming. I thought TTC would focus more on everything else – how to coordinate in standard setting companies, how to ensure that we can build an alliance for the people. It will work, “said Vesteger.
“I think in geopolitics we’re in front of what we’re in now, you know, if we didn’t have TTC we would have to invent it,” Vesteger said.
The head of the EU’s competition was once described by former US President Donald Trump as Europe’s “tax lady” and often criticized for following the Big Tech. However, he said he noticed recent changes in transatlantic relations.
“Things are very different from what we saw 2, 4, 6 years ago,” he said.
Asked if Russia’s aggression in Ukraine had revived transatlantic ties, he said: “I think so.”
“It simply came to our notice then [nations] We have to come together, “he said.