EDMONTON, AB, Aug 18, 2014/ Troy Media/ – Global food security rarely comes up for political debate in the western world, but that doesn’t mean it isn’t important. And it is the West’s ignorance of the issue that is at the heart of India’s delay in ratifying the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA).
The WTO requires consensus among its members, so India’s decision not to ratify could jeopardize the existing system of international trade and lead to a more fragmented global trading system. While this is unlikely, it shows the trilemma of globalization that all nations face, and one that Canada will need to address as we enter into the “next generation” of free trade agreements.
The TFA is the first new multilateral trade agreement in two decades. It aims is to improve customs procedures and facilitate the movement of goods across borders by simplifying and standardizing the rules for shipping goods internationally.
The OECD estimates that the TFA, once implemented, will generate over $1 trillion in new trade and create 21 million jobs worldwide as it reduces trade costs by up to 15 per cent and boost exports, particularly by small and medium-sized enterprises (SMEs), which are often hesitant to export because of the inherent complexities of trade regulations.
While India supports the TFA, its issue is the parallel issue of food security. India’s Commerce Minister, Nirmala Sitharaman, stated “India is not standing in way of implementation of Trade Facilitation but seeking an equal level of commitment and progress in working on the issue of public stockholding.”
Stockholding is the system where the Indian government buys Indian farmers’ rice and wheat at “administered prices”, which are generally above market prices and sells it to India’s poorest people at a lower price.
The United States and others developed nations, including Canada, argue that stockholding in India constitutes a trade-distorting agricultural subsidy. But rather than seeking a solution at the Bali Conference where the TFA was finalized, the developed countries choose to “kick the can” down the road. This has become an all too common approach by politicians in this country and throughout the western world.
Princeton Academic Dani Rodrik coined the term “globalization trilemma” – the mutual irreconcilability of economic globalisation, political democracy, and national determination – which can be used to describe what India and all nations must go through as globalization increases. “If we want globalisation while retaining the nation state, we must jettison democracy. And if we want democracy along with globalisation, we must shove the nation state aside and strive for greater international governance.”
The Indian government has shown that it is unwilling to forfeit food security for its own people so that “hyperglobalisation” can thrive. India understands that in order to reduce globalization’s risk for its own farmers, new and permanent regulations are essential.
Unfortunately, our own government appears to have chosen economic globalization over democracy. Canada released a statement that said “at a time when the global economic recovery remains fragile, the TFA – an increasingly rare example of international cooperation to boost trade flows – should not be held hostage.”
A troubling statement for democracy, especially when juxtaposed with comments from Dr. Kanayo F. Nwanze, the head of the International Fund for Agriculture Development, who said: “Creating jobs for some other country, while people are still hungry, doesn’t make sense . . . If I was in the position of feeding my own family or creating jobs for someone else, what would I do? What would you do?”
Canada’s “principled stand” comes at a time when we are negotiating the Trans-Pacific Partnership and have an agreement in principle with the EU on free trade. Both of these agreements have been kept secret, which leads me to wonder how our government is addressing the globalization trilemma.
With a trade agreement as important as the TFA we cannot afford to contemplate it not being ratified. All nations should work together to find a permanent solution to food security in the developing world, not take the position that we are being “held hostage.”
In Canada we should look to India’s example and hold our own government democratically hostage until they reveal how they are addressing the globalization trilemma in trade agreements.
The only secrets that should be kept from Canadians are those in little girl’s diaries, not ones in major trade deals.
Ryan Lijdsman is a Canadian-based international business consultant. Follow Ryan on twitter @ryanlijdsman
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