Is the WTO broken?

The World Trade Organization (WTO) was created to add stability to global trade by upholding certain rules between trading partners. The organization has been criticized for being too slow, and, at times, ineffective.

But the WTO exists for very good reason, says Brian Innes, past president of CAFTA who also is the head of public affairs for the Canola Council of Canada. The process takes time, too, for very good reason.

The U.S. Trump administration has recently criticized the WTO, and has refused to appoint or approve judges to the WTO’s appellant body in protest.

Innes says that the WTO is incredibly important not just for Canada, but also for the United States and the hundreds of countries around the world that are a part of it, because it creates a framework for rules that create predictability.

“The immediate consequence (to the U.S. not appointing judges) is that there is no appeal body, should a ruling come against a country and they wish to dispute that ruling,” Innes says. “Right now what it means is if there’s a dispute settlement panel set up and there’s a decision made, there’s no mechanism to appeal it. Which could call into question what the utility of taking something to a dispute settlement panel would be … the WTO continues to function despite the challenges with the appeal body or the appellant body.”

The WTO is not perfect, of course, but Innes explains there is an on-going process to evolve the institution and modernize it, which Canada has been a part of. Many of the trade issues internationally surround sanitary and phytosanitary issues, key points of contention for agriculture trade. Rules-based trade is so important for stability, but there are multiple levels of rules.

“In some cases, we have rules in North America, governed by our NAFTA an the new U.S./Mexico/Canada agreement when it comes into force; but the WTO really sets the framework for the world, and it’s the only way that we can address some really critical issues in agriculture related to things like domestic support, or things like the way quotas are filled, or broad issues around sanitary and phytosanitary measures,” he explains. “Whether you’re a Canadian farmer or an American farmer, we want to be able to trade that food around the world in a predictable way. And the WTO really sets that framework, because it’s got everyone at the table, and we’re able to help make rules that enable us to create a predictable trading environment which supports investment.” (article continues below video)

The time it takes for a ruling or an appeal has to be appreciated for what it is, too. “I think there’s a balance between speed and countries making sure that their interests are protected. So whether it’s the WTO, or whether you’re talking about our own legal system or any legal system in the world, neither of those processes are slow – whether we’re suing someone, or whether someone’s going through a criminal trial. I think we’d all appreciate the fact that if we’re accused of something, we’d want to have the ability to defend ourselves, and so the WTO is similar in that sense, where countries want to be able to have the opportunity to defend their ability to regulate in the public interest, for example, when it comes to protecting plant health.”

The organization has come under fire for allowing China to join. “I wouldn’t say that China alone is responsible for the downfall of the WTO: I see it more as a natural need to reassess. Some of those problems are around China and the way that economy functions, but I would also note that what perhaps people miss is that U.S. agriculture has won recent cases against China, and China itself has shown that it adapts and changes its measures based on what happens at the WTO. So those two cases recently were around wheat quotas in China, for example, among other quotas, and also around China’s domestic support. So cases where the U.S. won against China, and we are seeing that China has adapted to make changes based on those rulings.”

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