WTO Slides Into a Vacuum, EU Slides Into Nationalism

Farm and Food File for the week beginning Sunday, March 10, 2024

On March 2, the 13th World Trade Organization (WTO) ministerial ended like most previous ministerials. After its 164 member-ministers discussed the burning need to change two, key international trade rules, everyone went home without changing any key international trade rules.

This actionless talkfest, however, carried a steeper price than previous gassy gatherings; this one left the WTO, the world’s biggest trade rules-enforcing body, badly weakened and in danger of slipping into irrelevancy.

Putting a pretty face on their ugly failure, WTO Director-General Ngozi Okonjo-Iweala said the meeting had “achieved some important things and we have not managed to complete others.” But, she added, “the glass is half full.”

Nice try but the Abu Dhabi meeting achieved little, managed nothing, and the metaphorical glass, half full or half empty, holds only hemlock.

The outcome wasn’t unexpected. In fact, it would have been breaking news had the ministers agreed on any new rules, let alone the two they gathered to debate, changes in ag trade and overfishing. Both have been huge stumbling blocks since the group called the first WTO ministerial to order in Marrakech, Morocco in 1995.

Despite a generation of continuous bickering, the rise and eventual embrace of the WTO’s neoliberal trade regime–lower or fewer tariffs, integrated regional and global markets, more standardized food safety rules, and meaningful reforms to domestic farm subsidies–did fuel decades of expanded international ag trade.

Now, however, the WTO’s stumbling progress toward freer markets is running out of steam. One cause is the rise in nationalism as exemplified by India’s demand to wall off its domestic stockpiles of food from cheaper American and South American ag imports and the protectionism it breeds.

Another cause, and one that no global organization even talked about in 1995, are the increasing number of individual efforts around the world to tackle ag’s sizable role in climate change. These highly detailed, increasingly strict programs are focusing most nations’ ag interests locally and regionally–rather than globally–as farmers adapt, argue, and fight over the implementation and effect of these changes.

Arguing and fighting is exactly where many European farmers find themselves in the current, months-long protests over the European Union’s new “green” regulations to counter today’s quickly changing climate.

Most protesters see red, not green, when analyzing the new programs. First, they say, new farming rules that slash pesticide use and impose fertilizer limits will cut farm profits. Second, the new regulations are an engraved invitation for low-cost competitors, not burdened by “green” costs, to flood EU markets.

Political leaders see a different worry, rising nationalism. Right wing politicians in France, Italy, and The Netherlands, they claim, already are exploiting rural anger (Sound familiar?) over the new regulations in hopes of expanding their clout through European Parliament elections in June.

To head off that possibility, European “lawmakers have rushed to make concessions to appease farmers,” Foreign Policy reported Feb. 24. In the “sharpest reversal” so far, it explained, “the EU abandoned its major proposal to slash pesticide use by 50 percent…”

In the meantime, few are looking for the WTO to muscle-up and reassert its presence in international markets. For that to happen, trade analysts explain, the WTO needs to stop bleeding authority. For example, just prior to the February ministerial, delegates could not “even agree to ‘formalize’ the talks… to revive the WTO’s top appeals court… which has been idle since 2019…”

After five years of idleness, it’s a safe bet that it’s not that the WTO can’t restart the appeals court so much as key members won’t allow the WTO to restart it. Similarly, the just again-failed ag and overfishing overhaul are more about “won’t” than “can’t.”

The result is a weaker WTO and stronger nationalism, and that’s a bad trade by any measure.

© 2024 ag comm