US and Europe rush to improve food supply chains after India bans wheat exports

PARIS – The United States and the European Union are exploring how to improve food supply chains with export restrictions from India and other countries accentuating global problems, the trade chief of the EU.

G-7 foreign ministers warned over the weekend that the war in Ukraine is increasing the risk of a global hunger crisis. Indeed, Ukraine has been unable to export grain, fertilizer and vegetable oil, while the conflict is also destroying cultivated fields and preventing a normal planting season.

This has increased the dependence on countries in other parts of the world for these products. But some of these countries, concerned about supplying their own citizens, have imposed restrictions on exports. This is the case of India, for example, which announced on Saturday a ban on wheat sales “to manage the country’s overall food security”.

“This is something that is very concerning,” Valdis Dombrovskis, the EU’s trade chief, told CNBC on Sunday of the new export measures.

“We have agreed with the United States to cooperate and coordinate our approaches in this area, because … in response to Russia’s aggression against Ukraine and a corresponding increase in food prices and food security concerns, countries are starting to take restrictive export measures. And we believe this is a trend that can only make the problem worse,” Dombrovskis said.

He added that such measures, such as Indonesia’s ban on palm oil exports, “make matters worse”.

Export limits are likely to drive up commodity prices, and therefore also food prices. For the EU, it’s a matter of food accessibility, Dombrovskis explained.

transatlantic link

The United States and the EU are having talks in France on Monday for their Joint Trade and Technology Council, or TTC. The group was formed in 2021 to restore transatlantic ties, after Trump-era trade tariffs and disagreements.

However, the TTC’s work has now gone beyond its target, such as semiconductor shortages, to mainstream and find solutions to current geopolitical issues.

Its first meeting, in late 2021, was overshadowed by the US deal to sell nuclear submarines to Australia – where Canberra decided to scrap a trade deal with France, upsetting European officials. Now its second gathering deals with supply shocks 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 hadn’t anticipated this. I thought the TTC would be much more focused on all the other issues…like, for example, how do we coordinate in standards organizations, how do we make sure we can create a coalition for people to be elected into organizations, how to work on supply chains,” Vestager said.

“I think with the geopolitics that we have in front of us that we find ourselves in now, you know, if we hadn’t had the TTC, we would have had to invent it,” Vestager said.

The EU’s competition chief has previously been dubbed by former US President Donald Trump Europe’s “tax lady” and often criticized for going after Big Tech. However, she says she has noticed a shift in the transatlantic relationship recently.

“Things are very different from what we saw 2, 4, 6 years ago,” she said.

When asked if Russia’s invasion of Ukraine had rekindled the transatlantic bond, she replied: “I really think so.”

“It clearly showed that like-minded people [nations] must unite,” she said.

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