U.S., Europe to improve food chains after India bans wheat exports
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PARIS — The United States and the European Union are looking at how to improve food supply chains with export restrictions from India and other nations accentuating global problems, the EU’s trade chief told CNBC.
G-7 foreign ministers urged caution over the weekend about the danger of a worldwide hunger crisis as a result of the conflict in Ukraine. Because Ukraine cannot export grain, fertilizers, or vegetable oil while conflict has also caused destruction to crop fields and prevented normal growth seasons.
This has led to a greater dependence on countries from other regions of the globe for these goods. Some of these countries have placed restrictions on exports to ensure that they are able to supply their citizens. India announced Saturday that it will ban all wheat sales to “manage the overall food security”
CNBC’s Valdis Dombrovskis said Sunday that this is a concern because of the new EU export rules.
“We had agreed with America to work together and coordinate our approach in this region, as Russia’s aggression against Ukraine has prompted a rise in food prices and worries about food security and countries have begun to implement export restriction measures. Dombrovskis stated that they believe this can actually worsen the problem.
He said that such measures as the ban in Indonesia on palm oil exports “make things worse.”
Export limits are likely to cause an increase in commodity prices and, therefore, food prices. Dombrovskis explained that this issue is one of food affordability for the EU.
Transatlantic bond
On Monday, the U.S. and EU met in France to discuss their Joint Trade and Technological Council (or TTC). After Trump-era tariffs and disputes, the group was established in 2021.
The TTC’s work has led to the incorporation and finding solutions to current geopolitical problems.
Its first meeting, in late 2021, was overshadowed by the U.S. agreement to sell nuclear submarines to Australia — where Canberra decided to ditch a business deal with France, upsetting European officials. Its second meeting is now dealing with the effects of supply shocks following Russia’s unexpected invasion of Ukraine.
CNBC’s Sunday interview with Margrethe Vestager, Europe’s Competition chief, said that she had never imagined the TTC discussing sanctions against Russia.
I didn’t see this coming. I thought the TTC would be much more focusing on all the other issues … like, for instance, how to coordinate in standard setting organizations, how to make sure that we can create a coalition for people to be elected in organizations, how to work on the supply chains,” Vestager said.
Vestager said, “I believe that with the geopolitics ahead of us that are in now, you can see that without the TTC, it would have been necessary to invent them.”
Former US President Donald Trump once called the EU’s competition chief Europe’s “tax lady”. She was often criticised for pursuing Big Tech. She claims that she’s noticed a shift in transatlantic relations recently.
She said, “Things have changed a lot from what was seen 2, 4, and 6 years ago.”
She said that Russia’s invasion in Ukraine had helped to restore the transatlantic connection.
“It is abundantly evident that like-minded people exist,” [nations]”They must all come together,” she stated.
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