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APEC summit failure - Is the WTO finished?


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Well, the APEC summit ended in disarray, with the U.S. and China unceremoniously packing their bags without any agreement on the fundamental problems facing global trade. My suspicion is that the U.S. and China will pursue and reach their own accommodation on trade outside of the WTO rules. But where does that leave Canada, with our federal government apparently slavishly committed to a multilateral strategy that may simply have reached its end? For Canada, I believe the best approach would be to develop a common response among developed economies to China's apparent resistance to give up some of the benefits it gains under the current WTO rules. Trudeau doesn't have the gravitas, nor likely the credibility or insight, to pursue such a strategy. 

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On 11/19/2018 at 10:44 AM, turningrite said:

Well, the APEC summit ended in disarray, with the U.S. and China unceremoniously packing their bags without any agreement on the fundamental problems facing global trade. My suspicion is that the U.S. and China will pursue and reach their own accommodation on trade outside of the WTO rules. But where does that leave Canada, with our federal government apparently slavishly committed to a multilateral strategy that may simply have reached its end? For Canada, I believe the best approach would be to develop a common response among developed economies to China's apparent resistance to give up some of the benefits it gains under the current WTO rules. Trudeau doesn't have the gravitas, nor likely the credibility or insight, to pursue such a strategy. 

Where does it leave the world? We dump all the dispute mechanisms when it comes to trade and it becomes a free for all? The WTO is going to review the US mental tariffs. If they find against the US will it get rid of them? If they find for the US, that means every country in the world will be free to use national security as an excuse to impose tariffs. Trump claims to want a tariff free world but his actions are achieving the opposite, which I suspect is what he really wants.

Edited by Wilber
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China has grown like a cancer using unfair dumping and currency fixing strategies to create huge trade imbalances in its favour. China and the US being the two biggest manipulators of free trade were bound to come head to head.

 

 

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10 hours ago, Rue said:

China has grown like a cancer using unfair dumping and currency fixing strategies to create huge trade imbalances in its favour. China and the US being the two biggest manipulators of free trade were bound to come head to head.

 

China and Trump, ironically, adhere to the same mercantilist philosophy.  Mercantilism, which was largely the economic logic of colonialism, promotes the export of a country's products while protecting its domestic markets from foreign competition in order to amass large trade surpluses. This is clearly not consistent with a viable global free and open trading system, particularly when such practices are adopted by the largest economies. Since joining the organization, China has benefited from WTO rules that permit 'developing' countries to adopt and maintain protectionist policies. Trump is correct to hold that this situation has created a massive trade imbalance between China the U.S., as it has between China and many other countries. The most logical solution, of course, is WTO reform, however Trump is utterly disdainful of multilateralism and therefore apparently seeks relief just for his own country. If the Americans and Chinese reach some sort of truce between themselves on trade, as appears increasingly likely, the entire WTO regime could well become redundant as other countries would be incentivized to similarly negotiate their own deals. Those that would be most hurt are smaller trading economies, like Canada's, that rely heavily on foreign trade.

Edited by turningrite
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4 hours ago, bush_cheney2004 said:

 

Dairy products are not made of metal.

97% of the US dairy market is protected by an average 20% tariff.

Over 10% of the Canadian market is open to foreign competition tariff free.

Edited by Wilber
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2 hours ago, SpankyMcFarland said:

The WTO agreement has brought tremendous prosperity to the world, and Canada has a huge stake in keeping a multilateral rule-based order alive. Trump should have built a coalition to confront China on its numerous abuses. Instead, he has chosen to fight with everybody. 

The WTO model isn't a panacea but does offer a roadmap of sorts to fair trade. However, it's in need of major reform. Obviously, Western countries underestimated the impact of the exemptions created for developing countries and the lack of an appropriate mechanism to adjust these exemptions. All of us would have been better off if Trump and other Western countries agreed to a united front on needed WTO reform. Trump simply believes that the U.S. can and should be able unilaterally dictate the conditions for access to its markets regardless of WTO provisions. With China and the U.S. (our two biggest trading partners) both steadfast in their respective exceptionalist positions, however, there's little hope for multilateral reform. In this environment it's hard to imagine that Canada's current trade strategy is realistic.

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