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The WTO is dead, long live agricultural multilateralism !

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This December 11, 2019 will remain as an important date for trade multilateralism: the Appellate Body within the World Trade Organization (WTO) has ceased to function following the United States blocking the renewal of its members. Twenty-five years after its creation, twenty years after the Seattle summit, the WTO is in a very delicate situation.

The reasons for this setback for free traders feature agriculture and food security, which never managed to comply with the sole logic of trade expansionpromoted by the GATT for other sectors since the post-war period. To paraphrase the title of one of economist Jacques Berthelot’s works, agriculture has been the Achilles heel of neoliberal globalization. Not having properly assessed the structural instability of agricultural markets, the software built during the Uruguay Round crashed against the 2007/08 food crisis that reminded everyone that food security is at the core of the stability of all political regimes.

Should we stop there? No, certainly not, and Agriculture Strategies tackled the subject by publishing the note “For a reform of multilateralism: a challenge for the European institutions and a solution for the CAP” in February 2019.

To overcome this failure, a lucid realization is essential in order not to fall into the usual shortcomings and to prevent bad fairies from looking into attempts to renew multilateralism. That is why we disagree with the article “Can agriculture save the WTO from ‘brain death’?” Recently signed by Stefan Tangermann, a very influential agricultural economist in the 1990s and former director of the Trade and Agriculture Division at the OECD. Of course, he calls for a new beginning in the consideration of agricultural issues at the WTO, with the prospect of the next WTO Ministerial in Kazakhstan in June 2020. However, his proposals offer no novelty and perpetuate injunctions that many countries have abandoned by strengthening their agricultural policies: to him, “what is now needed is not a revolution in agricultural trade, but further progress in terms of reducing subsidies and improving market access”. Bis repetita place.

On the economic aspects alone, no mention is made of food security, the cost of instability in agricultural markets, institutionalized dumping of agricultural prices or the increasing monopolization of the agro-supply, food and distribution sectors. Climate change is just mentioned to talk about the difficulties facing governments … which will be put back on track via trade reform, that is to say, thanks to more trade openness! When will we take the realize the agronomic limits to the productive specialization of agricultural regions? The “international division of labor” applied to agriculture and natural resources is harmful to our planet. And the theories of international trade are obsolete with two fixed factors of production: this is the case of agriculture with agricultural land and agricultural labor.

In the same article, Stefan Tangermann indicates that the Doha Round was on track to be concluded in 2008, but he does not mention the soaring of agricultural prices that occurred mid-2007 and the episodes of food crises that it started! In fact, the lack of reaction for more than a decade to the major resensitization to food matters that has been observed since, tends to show that the WTO is already in a state of brain death. Agriculture is multidimensional, the only approach by trade is too restrictive. It is all the international organizations that must be involved in the aggiornamento of multilateralism regarding agriculture and food security.

Because sometimes you have to know how to start from a blank page: the WTO is dead, long live agricultural multilateralism!

 

Frederic Courleux, Director of studies for Agriculture Strategies

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