Post on 28-Jun-2020
transcript
Whither Multilateralism?
Joseph W. GlauberInternational Food Policy Research InstituteKraft LectureUniversity of Manitoba21 October 2016
Or wither multilateralism…
Making America Great Again?
US net exports as percent of GDP
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%1
85
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18
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20
15
Surplus driven by productivity growth (Gordon)
Growth in global agricultural trade
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200
400
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20001
98
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81
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14
Bil USD
Source: WTO
Launch of Doha Round
Growth in trade volumes, selected product
groups
0%
50%
100%
150%
200%
250%
300%
Oilseeds
Wheat
Rice
Feed grains
Beef and veal
Swine
Poultry
Source: USDA, PSD database
Growth of South-South Ag Exports
0
50
100
150
200
250
300
350
400
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
South-South North-South
Bil USD
Source: UNCTAD
Growing share of developing country exports go to
other developing markets
0
50
100
150
200
250
300
350
400
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Exports to Developed Markets Exports to Developing Markets
Bil USD
Source: UNCTAD
Largest Developing Country Exporters
2013 ExportsBillion USD
Change from 2009 Share to Developing Markets
Brazil 84.6 +59% 66%
China 46.1 +65% 56%
India 41.8 +188% 79%
Argentina 40.6 +50% 74%
Indonesia 34.7 +67% 68%
Thailand 32.7 +53% 67%
Malaysia 26.5 +47% 76%
Mexico 22.0 +52% 12%
Ukraine 16.1 +83% 59%
Turkey 16.1 +58% 56%
World 1,502.7 +49% 39%
Source: Flake and Flake (2015) and UNCTAD (2015)
Doha Development Agenda, RIP
• 2001: Launch post 9/11• 2003: Cancun ministerial => emergence of G20/G33/C4• 2004: Framework Agreement => tradeoffs (CCPs for SSM/SP)• 2005: Hong Kong ministerial => elimination of export subsidies• 2006: Geneva meltdown => EU market access v US domestic
support• 2007: G4 process => Potsdam (EU/US v BZ/India)• 2008: July ministerial => breakup over SSM (India v US)• 2013: Bali ministerial => trade facilitation; public stockholding• 2015: Nairobi ministerial => export competition
Nairobi Package
• Export subsidies eliminated– Developed countries: 2020– Developing countries: 2023– Dvlping use of marketing and internal transportation subsidies (Art 9.4): 2028– Volume standstill based on average of previous 5 years
• Export credits—repayment period restricted to 18 months– Developed: end of 2017– Developing: end of 2020
• Food aid– Best efforts on cash versus in kind
• State Trading Enterprises– Best efforts
Nairobi Package
• Special Safeguard Mechanism– Recognizes right of developing countries to have SSM (HK ministerial)– Committee on Agriculture will have special session to discuss
• Public Stockholding for Food Security Purposes– Reaffirmed Bali declaration—peace clause for stockholding practices; vulnerable to SCM
challenge– Permanent solution to be found by MC11 (2017)
• Cotton– Market access—Developed and developing countries “in position to do so”: duty free/quota free
access to LDCs– Domestic support—recognize efforts to reform policies; more to be done– Export competition—immediate phase out for dvlpd; by 2017 for dvlpng
• Market Access—• Domestic support—
Average bound MFN tariffs for agricultural products
Source: WTO
Average applied MFN tariffs for agricultural products
Source: WTO
Applied versus bound tariffs
0
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150
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250
0 50 100 150 200 250
Ap
plie
d M
FN R
ate
Bound MFN Rate
Tariff overhang
Source: WTO
Impact of DDA reduction formula on applied tariff
rates
Most market access gains concentratedin key developed countries
Minimal access in developing countries due to high tariff binding overhang
Source: Laborde 2014.
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0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Tari
ff R
ate
(%
)
Implementation Year
Japan’s Beef (Chilled/Frozen) Import Tariffs But, far from comprehensive
• Sensitive products remain protected under TPP
– Dairy
– Sugar
– Rice
• More access for SeP under Rev4?
– Limited tariff lines
– TRQs
DDA v TPP
WTO bound
Current applied
TPP (-82%)
DDA (-57%)
• Labor
• Environment
• Cross border services trade
• E-commerce
• SPS
• Dispute settlement
• GMO approvals
• SPS harmonization
• Growth hormones
• Geographical indications
“Deep” agreements => standardization and
harmonization of standards
TPP TTIP
Domestic support levels
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45
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Producer Subsidy Equivalentas percent of value of farm production
Source: OECD
Composition of domestic support
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90%
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
OECD Average
Tied to output Tied to inputs Decoupled from production
Source: OECD
Producer Subsidy Equivalents
0
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20
30
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60
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PSE Coupled PSE
Source: OECD, calculations by author
Percent of value of production
Composition of Domestic Support2014
Source: OECD
percent
0%
10%
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30%
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100%
Brazil Russia Mexico China Turkey Indonesia Korea
Output Input other coupled decoupled
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1980 1990 2000 2010 2020
World
Growth of Agricultural Insurance ProgramsPremium volume
Source: Glauber 2015
$ billion
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China US
Source: Glauber 2015
$ billion
China corn support
Source: Gale 2015
China corn
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Harvested area Ending stocks
Source: USDA, PSD database
Thous ha Thou tonnes
Estimated change in outlays, FY 2014-23, by WTO
classification under 2014 farm bill
-50
-40
-30
-20
-10
0
10
20
$ billion
Green Amber
Net change:Green: - $52.8 bilAmber: +$32.3 bil
Source: Glauber and Westhoff 2016
Implications for the WTO
• Do new mega-regionals establish standards for global trade?
• Multi-lateralize mega-regionals?
– Expansion to TPP: Indonesia, Philippines, Korea, …
– China? India??
– Brazil
– LDCs
• If inclusive, brought into the WTO
• If exclusive, does WTO primary role becomes dispute resolution?
• What if TPP fails to be ratified?
With no agreement on domestic support, dispute settlement
likely venue for addressing adverse trade effects
• US—Upland Cotton
• US—Country of Origin Labeling
• 2014 farm bill:
– Peanuts
– Soybeans
– ARC/PLC for cottonseed
• Developing country subsidies
Conclusions
• Rise of protectionist sentiments—hopefully temporary? – In US, failure to address adverse effects of globalization
• For agriculture, growth in demand is outside of US and Canada• US and Canada are well poised to take advantage of that growth, but the degree of
access to those markets must not be limited by the demand of sensitive commodities within our countries
• While most gains of liberalization are in market access, the other pillars must not be ignored (indeed the exchange rate may be quite high)
• Bilateral agreements and mega-regionals like CETA, TPP, TTIP and NAFTA have potential to provide significant market access gains and progress in resolving NTBs, BUT unless plura-lateralized through WTO have potential to weaken the multilateral system and risk leaving many members (particularly developing countries) disadvantaged
• Important for world for US to retake a leadership role in Geneva