FAO UPDATE TO THE TBT COMMITTEE

INFORMATION PROVIDED BY THE FOOD AND AGRICULTURE ORGANIZATION

This document contains information provided by the FAO for consideration at the TBT Committee meeting of 25‑27 June 2025 under Agenda Item 7.a on Updates by Observers.

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1  THE STATE OF AGRICULTURAL COMMODITY MARKETS 2024

1.1.  The 2024 edition of The State of Agricultural Commodity Markets (SOCO), a flagship report of the Food and Agriculture Organization of the United Nations (FAO), explores the complex interplay between food trade and nutrition. It presents new insights into how trade can shape a country's food environment, influence dietary patterns, and affect nutritional outcomes. Trade enhances food availability and diversity, supports the more equitable distribution of nutrients, and lowers food prices, particularly in low- and middle-income countries. Not all countries have adequate natural resources, such as land and water, and favourable climate to produce sufficient quantities of diverse foods to support food security and nutrition. By facilitating food imports, trade broadens consumer access to a greater variety of foods, which is essential for achieving balanced and nutritious diets.

1.2.  However, the report also underscores that trade can have heterogeneous impacts across countries. While it can help fill nutritional gaps, trade can also accelerate the nutrition transition, characterized by a shift from traditional, staple-based diets to those higher in processed and ultra‑processed foods rich in fats, sugars, and salt. These dietary shifts have contributed to the rising burden of overweight, obesity, and diet-related non-communicable diseases (NCDs), highlighting the need for complementary policy measures that promote healthier food choices.

1.3.  One key policy tool is nutrition labelling, particularly front-of-package labelling (FoPL), which provides consumers with accessible, simple information about the nutritional content of food products. These labelling policies aim to empower individuals to make healthier dietary choices. However, while driven by public health goals, such measure must also comply with international trade regulations.

1.4.  Under the framework of the World Trade Organization (WTO), the Agreement on Technical Barriers to Trade (TBT) supports Members' ability to implement regulations for health purposes, provided such measures are appropriately balanced with trade considerations. It allows for discussions on whether these measures are necessary and proportionate.

1.5.  Between 1995 and 2023, WTO members raised 77 specific trade concerns related to food and beverage regulations, with labelling requirements accounting for more than two-thirds: 52 cases in total. The 2024 SOCO report examines these requirements in detail and features case studies that illustrate how such concerns have played out in practice. A widely cited example is Chile's 2016 front-of-package labelling regulation, which mandated prominent warnings on high-sugar foods. Several members raised concerns about the measure's design, potential trade impacts, and implementation costs. In response, Chile modified the size of the label.

1.6.  Despite the concerns, the policy proved effective. Between 2015 and 2017, average per capita calorie purchases declined by 3.5%, and sugar purchases fell by 10.2%. The labelling requirements also prompted many food manufacturers to reformulate their products to avoid the warning label, demonstrating the policy's influence on both industry practices and consumer choices.

1.7.  This case demonstrates that well-designed public health measures, when grounded in evidence and aligned with trade obligations, can achieve significant nutritional benefits without creating trade barriers. SOCO 2024 also underscores the importance of coherence between trade and nutrition policy objectives. As more countries consider adopting similar regulations, transparent policymaking, intersectoral coordination, and constructive dialogue at the WTO will be essential to advancing nutrition goals in a manner that is both effective and consistent with international trade commitments.

Link: The State of Agricultural Commodity Markets 2024

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