U.S. causing ‘trying times’ for trade

The U.S. is among the nations leading an inward turn around the globe

A recent virtual summit focusing on managing agri- cultural trade in an increasingly chaotic world focused largely on recent actions taken by the United States.

Hosted by the Farm Foundation and the Canadian Agri-Food Policy Institute (CAPI), the conference brought together trade experts from various backgrounds to discuss issues of trade on July 8.

Joe Glauber from the International Food Policy Research Institute said the 2016 election of current U.S. President Donald Trump ushered in a major change for international trade, but noted trade talks around the world had been slowing since 2008, in part because of the financial crisis that took place that year.

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He reminded viewers of Trump’s decision to pull out of the Trans-Pacific Partnership (TPP) deal shortly after his election, as well as the threat to pull out of the North American Free Trade Agreement (NAFTA) and the ongoing trade war between China and the United States.

Glauber said the U.S. decision to effectively render the Appellate Body of the World Trade Organization (WTO) useless by not filling vacancies on the dispute-settling body, combined with Trump’s other actions have resulted in “trying times.”

He also noted the United States is now likely exceeding its WTO limits on domestic support for agriculture in 2019 and 2020.

“Support levels could be well over US$30 billion for 2019 and 2020, which again would be these over domestic support limits,” he said.

While the WTO’s mission is to achieve economic integration for countries around the world, it has faced heavy criticism in recent years from the United States and other nations as protectionist policies pick up steam.

Joseph Glauber.
photo: File

“Hopefully the U.S. administration will return to that, in my view, more positive effort to reform rather than simply criticize,” said Glauber.

Reform efforts are currently underway at the WTO, highlighted by a campaign to replace outgoing director general Roberto Azevedo, who decided to step down one year prior to when his term was set to expire.

Tough economic times spurred by the COVID-19 pandemic combined with more nativist policies around the world have resulted in the long-enjoyed rules-based trading system and multilateralism to be “under threat,” according to John Clarke, director general of agriculture and rural development for the European Commission.

“We would all agree the WTO is in a crisis,” he said. “Certainly, post-COVID, we need to recognize our interdependence. We can’t batten down the hatches and go solo, we need to recognize that economic integration, trade, health policy commitments are very much related and every part of the international community needs to work in synch and in tandem.

“The WTO can’t be isolated from the U.S. system, and vice versa.”

Peter Clark, from Grey, Clark, Shih and Associates, argued domestic supports are largely responsible for causing problems for the WTO.

“If we’re going to deal with the more broadly based membership of the WTO, we have to do a catalogue of the concerns of individual countries to see how we can group them together,” he said, noting the level of domestic support allowed by the WTO has caused problems for India, Canada and the U.S.

“One of my concerns about the support (in the U.S.) is this could become subject to trade remedy disputes, because these are subsidies with respect to agreements coming out of trade wars and trade disputes, where preferential arrangements are made for the supply of agricultural products,” he said. “Canada has not done too well with those because the deals are being made by other countries.”

About the author

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D.C. Fraser

D.C. Fraser is Glacier FarmMedia’s Ottawa-based reporter. Growing up mostly in Alberta, Fraser also lived in Saskatchewan for ten years where he covered politics, including a stint teaching at the University of Regina’s School of Journalism. He is an avid fan of the outdoors and a pretty good beer league hockey player. His passion for agriculture and agri-food policy comes naturally: Six consecutive generations of his family have worked in the industry.

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