As part of the Canadian Agri-Food Policy Institute and Farm Foundation’s series “Managing Agricultural Trade in an Increasingly Chaotic World,” a panel of speakers was convened to speak about international trade and the World Trade Organization.
These experts from the U.S., Canada, the European Union and Australia focused their remarks on the current trade disruptions, what those disruptions mean for agri-food markets, the ability of the current multilateral system to achieve solutions, and the future of the multilateral system of trade.
In a pre-recorded address from Australia, Alan Oxley, of the European Centre for International Political Economy, began with the question of the future of multi-lateral, global trade. He said he does not think the COVID-19 pandemic will have a significant effect. Oxley said that there is still hope for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership to attract other countries, despite the fact that the 2016 signing was rendered mute when the U.S. backed out of the partnership under President Donald Trump.
Oxley said that the CPTPP needs to be reworked with more advanced trade agreements, recognition of electronic commerce, encouragement of national markets, liberalized services and adapted to digital trade. Oxley defended China’s engagement in the WTO, stating that China’s compliance has been better than many member nations, including India, which has chaotic trade agreements made on the state level.
He said the requirement for unanimous approval of all measures is “out of place” among these diverse international trade partners. There should be different levels and methods of agreeing to trade arrangements based on the member nations’ investment in the negotiated outcomes.
International Food Policy Research Institute senior research fellow Joe Glauber discussed the “sea change” in U.S. trading policy under the Trump administration. The U.S. pulled out of the Trans-Pacific Partnership and renegotiated NAFTA.
Within 12 months “the U.S. was at war with its trading partners,” Glauber said.
While the actions of the administration included a variety of trade areas, the retaliations from former trade partners were primarily directed at U.S. agriculture. In July of 2018, for example, China levied tariffs on U.S. soybeans, and South America took over the Chinese soybean market from U.S. farmers.
In an effort to alleviate the damage, the administration provided American farmers with $28 billion in assistance.
Additionally, the refusal to appoint U.S. representatives to the pro-U.S. agriculture appellate body of the WTO endangered the once-powerful system for adjudicating trade disputes, Glauber said.
Prior to this, 80% of the cases brought before the WTO appellate body were decided in favor of the U.S.
John Clarke, European Commission director for international relations, said “the WTO is in crisis.” Nativists and populist leaders across the globe have brought suffering and a huge gap between the richest and the poor, he said, adding that the WTO is affected and must respond.
The WTO is where the struggle for dominance between the U.S. and China has played out. Clarke said that now and post-pandemic, international trading partners and competitors need to “realize our interdependence and economic integration.” The WTO cannot be isolated from the rest of a national policy system. Finally, multi-national relations must be restored.
International trade practitioner Peter Clark picked up on the disintegration of the WTO. He said that the collapse began in 2001 with the failed Doha Round of Trade Talks.
While the Doha talks attempted to lower trade barriers, international trading partners and competitors were losing support domestically in the idea. Clark said the WTO must look at fresh approaches to regain clout in the international trade area — subsidies and preferential deals between nations choked off the spirit of cooperation. Fixing the WTO can’t happen in a vacuum. Nations will try to super-impose their agendas on solutions and agendas among the trade partners, Clark said.
The panel discussed what the WTO will need to do to continue when it is split between the nations that wish to move forward and those that do not.
Glauber said that the WTO can retain its pluralistic approach, but that approach should not be exclusionary.
Clark said to get rid of the consensus basis for decision making. He added that there can be multilateral agreements tailored to each member state, those adjustments built into the WTO negotiations.
Overall, the WTO will have to try a variety of more inclusive negotiation methods.