The EU trade chief told CNBC that the US and EU are looking at how to improve food supply chains with export restrictions from India and other countries exacerbating global problems.
The foreign ministers of the Group of Seven major powers warned at the weekend that the war in Ukraine was increasing the risks of the global hunger crisis. This is because Ukraine was unable to export grain, fertilizer, and vegetable oils, while the conflict also destroyed crop fields and prevented the normal growing season.
This has led to an increased dependence of countries from other parts of the world for these products. But some of these countries, concerned about supplies to their citizens, have imposed export restrictions. This is the case in India, for example, which on Saturday announced a ban on wheat sales “to manage the country’s general food security”.
“This is something that is very concerning,” Valdis Dombrovskis, the EU’s chief trade officer, told CNBC Sunday about these new export measures.
“We agreed with the United States to cooperate and coordinate our approaches in this area, because … in response to Russia’s aggression against Ukraine and the corresponding increase in food prices and concerns about food security, countries have begun to take export restrictive measures,” Dombrovskis said. It will only actually make the problem worse.”
These measures, such as Indonesia’s ban on palm oil exports, “are making matters worse,” he added.
Export restrictions are likely to drive up commodity prices, and thus food costs as well. This is an issue of food affordability for the EU, Dombrovskis explained.
The United States and the European Union are holding talks in France on Monday for the Joint Trade and Technology Council, or TTC. The group was formed again in 2021 to restore transatlantic relations, after tariffs and trade disputes under Trump.
However, TTC’s work has now gone beyond its intended focus, such as the shortage of semiconductors, to integrate and find solutions to current geopolitical issues.
Their first meeting, in late 2021, was overshadowed by a US agreement to sell nuclear submarines to Australia, with Canberra deciding to abandon a trade deal with France, angering European officials. And now, her second gathering deals with the shocks of the show in the wake of Russia’s unprovoked invasion of Ukraine.
Speaking to CNBC on Sunday, European competition chief Margrethe Vestager said she never thought the TTC would discuss sanctions against Russia.
“I didn’t expect that to happen. I thought the TTC would be more focused on all the other issues…like, for example, how to coordinate in standard-setting organizations, how to make sure that we can create a coalition of people to get elected into the organizations, how to work on supply chains “.
“I think with the geopolitics in front of us, now, you know, if we didn’t have a TTC, we had to invent it,” Vestager said.
Former US President Donald Trump has dubbed the EU competition chief the “tax lady” of Europe, and he is often criticized for going after big tech companies. However, she says she has noticed a change recently in the transatlantic relationship.
“Things are very different from what we saw two, four, six years ago,” she said.
When asked if Russia’s invasion of Ukraine had revived transatlantic ties, she said, “I definitely think so.”
“I made it abundantly clear that like-minded [nations] They should meet,” she said.
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