As an effective trade-negotiating forum, the WTO is dead
Friday, December 5, 2014
When trade negotiators proclaimed the 2013 trade talks in Bali a success, they spoke too soon. One country, India, has scuppered the deal and, with it, any hopes that the World Trade Organization can end trade-distorting rules and export subsidies
by BARRY WILSON
Ontario's export-oriented farmers should simply give up on the dream that the World Trade Organization (WTO) will be able to deliver new protectionist-busting multilateral trade deals in the foreseeable future.
Conversely, Ontario's protectionist supply-managed sectors should quit worrying about a WTO Trojan Horse deal that will undermine their industries.
As a relevant trade-negotiating forum capable of making a difference, the WTO is dead.
Funeral arrangements will follow, although family members in denial may wait for years to confirm the death and arrange the burial. The stages of grieving will be extended.
The WTO as a cutting-edge trade-negotiating forum has been on life support for many years, following its birth amid much hoopla and a precedent-setting world trade deal in 1993.
Since then, it has been failure after failure until late 2013, when representatives from 160 member countries agreed in Bali, Indonesia, to a modest deal that would have helped food producers escape trade-distorting import border regulations and end export subsidies. There were potential gains for Canadian food exporters with the promise of slimmed down border bureaucracy.
Then, just months ago, one country, India, reversed its support because of perceived restrictions on farm supports. Only unanimity can carry a deal to implementation, so the deal collapsed. To quote a famous Monty Python skit, this parrot is dead – not just sleeping, dead!
The Geneva-based WTO bureaucracy lives on and does good work administering existing rules and adjudicating trade disputes between members. It certainly is the best hope Canadian beef and hog industries have to finally get rid of the trade-suppressing and distorting U.S. country-of-origin labelling rules that have cost Canadian farmers billions of dollars in recent years.
In October, the WTO once again ruled in favour of Canadian and Mexican complainants and the Americans are running out of hidey holes from which to launch appeals.
But as a trade deal-negotiating forum, the WTO has run out of steam and credibility. It wasn't supposed to be this way a short year ago.
In the early dawn hours of Dec. 7, 2013, after four days of meetings and an all-night bargaining session in Bali, Indonesian trade minister Gita Wiriawan declared victory. "We have proven the WTO and the multilateral system can deliver," he told bleary-eyed journalists and negotiators. "It moves the WTO back to centre stage." New WTO director general Roberto Azevedo proclaimed that the organization had reclaimed its title as a world trade organization.
Canadian farm leaders at Bali joined in the chorus with Canadian Federation of Agriculture president Ron Bonnett and the Canadian Agri-Food Trade Alliance (CAFTA) lauding the rebirth of multilateral farm trade deals.
"The Bali ministerial meeting has proven that, with the necessary resolve, countries can work through seemingly impossible issues and find a path forward," said CAFTA. Except it didn't. What went wrong?
In part, the WTO always was a free trader's fantasy. While free traders castigated Canada for its defence of supply management protections, the United States, Europe, India, Japan and many players bigger than Canada had no intention of giving up their protections and subsidies worth multiple times Canada's protectionist benefit.
The billions of dollars in U.S. farm supports embedded in the latest Farm Bill illustrate the point.
More importantly, the WTO works on consensus (read unanimity), so one country can kill a deal supported by 159 others. In the latest case, the dissident is India with a huge agricultural economy, but it easily could have been an island country with an economy smaller than Stratford, Ont.
That unanimity rule will not change.
WTO, RIP. BF
Barry Wilson is a member of the Parliamentary Press Gallery specializing in agriculture. He has covered nine WTO meetings around the world since 1988.