The globalization of trade was to bring people the world and the good of the world to the people. Open and advanced trade agreements were to allow for a variety of products to flow in and out of countries, jobs were to be created and the poor to be lifted from poverty.
What happened? Today, commodity prices do not reflect a global demand and in fact, many prices are victim to downward global pricing based on the excessive availability of product outside of our borders. Active conflict continues and this limits the reach of food and other goods to those who are in need. The $53 trillion estimated to fix the infrastructure to ensure the delivery of food and technology to the most marginalized has not been spent and the centralization of processing has evaporated much promised jobs. It’s a tough stage on which to start the new year.
The World Trade Organization (WTO) was established in 1995, following the General Agreement on Tariffs and Trade (GATT) to govern the trade of goods and services between member countries of which there are 164. It is a platform to ensure equal trade opportunities for developed, developing and least developed countries. Trade, however, has not been equally distributed and although developing and least developed countries hold the majority of the memberships, they experience only a portion of the action.
It is Canada, the United States, Japan, China and the EU that control 68 per cent of trade in the WTO. In saying this one would expect robust economies in all of these countries and a reciprocal effect in their minor trading partners. Instead, food price on the farm has been victim to volume, jobs have been centralized or eliminated and there is little measurable value to the external trading partners which are still developing.
The rapid and aggressive deals that are the norm of the day are now largely regional or bilateral. The free trade discussions between China and Canada are an example of a bilateral trade agreement.
When there is dispute on a trade agreement, the WTO does not monitor or mitigate risk for the trading partners but receives and rules on complaints. The price tag of $500,000 to bring forward a complaint has not dissuaded the U.S. who is listed in 2017 as bringing forward 114 cases as complainant, is named in 130 cases and is third party in 171 cases — all while failing to pay their membership fees. This constricts equal attention to members.
Another tactic is to impose non-tariff trade barriers called sanitary or phytosanitary measures (SPS) such as the EU’s application of SPS on Canadian beef. Although the WTO ruled with Canada, the WTO cannot impose their ruling on a member country. That means that sovereignty is always protected and it is up to individual countries to implement the rulings if they desire. More than 50,000 of these non-tariff barriers have been put in place since 1995.
Globalization is more than just tactical trade and includes intellectual property, e-information and technology, an area in which the WTO is stumbling as it struggles to keep up with the pace of sophisticated systems and legally answer the question of “who owns what.” Unfortunately the swift changes have also opened the door for global crime, particularly the trade of persons. Farm families in destitution are often victims of both food price devaluation and human trafficking; and no country is immune to this reality.
It appears that the very core of globalized crime is member countries have focused on the reaction to the crime rather than collectively blocking or suppressing it. As countries are sovereign, everything from illegal food additives to tainted medicine, the suppression of farm income, illegal mining, human trafficking through to the extensive increase in the drug trade has grown.
Centralization for the purpose of export logistics has ripped apart rural communities and the pressure to produce more to fill these international orders has pushed farmers to use every available tool to keep in the game. Input costs and debt rise while companies such as Agrium Inc. mine phosphate in the disputed Western Sahara, while paying for the spoils to Morocco and shipping to Canada. Mining in disputed territory has been deemed as illegal by several countries and is most certainly marginalizing of the Western Saharans.
Despite Canada’s dominance on the world trade scene, many rural communities are torn between supporting the farm or working at the factory, feel vulnerable and lament that they are far removed from centralized decision processes.
Now that consumers are addicted to a variety of goods at a low cost, it is admittedly going to be difficult to change patterns of behaviour. Fortunately, technology is our friend in rural Canada allowing for access to information, inputs and markets. New approaches to farming and value adding to commodities will continue to grow and these sparks in the countryside will capture further investment. Consumers will feel closer to their food source.
Creating solutions at the community level will be important. One must recognize that globalization is not all to our advantage or in our immediate control and that the economy of choice is regional and often rural. A regenerative model includes creating a culture where great ideas are encouraged and met with community support, and local governments focus on nurturing the human capital, that being the health, safety and other social needs of their constituency.
The measure of a robust economy is found in the strength of its middle class. Protecting this through rural community growth will enhance our lives even as we look through the window of the world.