Doug Hedley and Al Mussell of the Agri-Food Economic Systems Associates, are warning that world trade agreements are unraveling, posing perils for Canada’s agriculture industry that relies heavily on exports.
“The global trade system under WTO (the World Trade Organization) has allowed small countries like Canada to be protected from the overwhelming power of large countries, facilitating an opening up of world trade,” said Douglas Hedley, Agri-Food Economic Systems Associate and co-author of the report.
“Current tensions are bringing to a head issues that are of concern to many market-oriented, open-economy WTO members, including Canada. But the extent of pressure being exerted and the nature of disputes also risks the unraveling of the system.”
Al Mussell, leader of Agri-Food Economics Systems Research, said “If the largest countries begin to operate outside of WTO jurisdiction, or flaunt it, others will question why they subject themselves to the restraints of international trade rules.
“The risk of increased international transaction costs, difficulties in global agricultural market arbitrage, discrimination among national suppliers of agri-food products, and increased domestic agricultural support is very real- and very serious for Canada,” he said.
I say that tariffs that U.S. President Donald Trump has imposed, and retaliation by China, Canada and many others, broke the WTO rules, but so far there has been no WTO discipline applied.
Lacking discipline, and seeing the devastating impact of the Chinese and U.S. tariffs, leaves countries such as Canada quaking in their economic boots.
I find it worrisome that recent moves by China seem to be breaking the WTO rules for Canadian canola exports and China’s suspension of pork imports from two companies and inspection harassment of upcoming pork shipments.