On a recent visit to Florida I bought the “quintessential globalization specimen”.  On arrival at our condo, I noticed two basketball courts nicely tucked away in front of the complex.  Me being a basketball aficionado, I couldn’t believe my luck.  I might have never made the NBA, but I’ve sure had a good time trying to get there.

The only problem was the basketballs provided were a bit short of air, more like a basketball pancake.  So off I go to the local Wal-Mart store in search of a needle to blow those basketballs up.  However, I got much more than I bargained for.  After a bit of searching I came upon an air pump made specifically for blowing up balls complete with an enclosed needle all for $3.99.  I couldn’t believe my luck.  I took it back to the complex, blew up all the balls and I was away.  Somebody in far off China had made that little gizmo, shipped it over seas and satisfied a need on this side of the Pacific at a fraction of a price.  What was the world coming to!

Some people might take that for granted, going down to the local Wal-Mart store and grabbing a cheap do dad.  However, in your loyal scribes mind, it had a lot more to do with “globalization” which in my mind has to do with a world economic order coming together to trade goods and services among nations at least cost.  That cheap air pump with a needle should serve as a poster of what global liberalized trade can do.

I bring that up this week to illustrate the importance of liberalized trade to our individual lives.  Also too I bring it up because as shining as an example as that is, last week the WTO talks first started at Doha, seven years ago ended in failure.  Despite the many successes GATT and the WTO had before in liberalizing world trade, talks once again broke down on the question of agricultural subsidies.

“Liberalized trade” is just another name for freer trade around the world.  It is controversial, as most nations have their “scared cows” within their own economy, which are politically sensitive.  The rice economy in Japan for instance is always a non-starter for the Japanese.  In Canada it’s always our supply managed agricultural commodities because Quebec dairy farmers can mass overnight to defeat governments.  So “liberalized trade” or “freer trade” has always sent shockwaves through western political capitals.  Despite that, there are iPhones in Japan and Volkswagens in the United States.  Aside from agricultural subsidy problems, the WTO has been fairly successful enhancing trading networks around the world.

The hope has always been to get that done with agriculture too.  However, last week China and India said no to the United States and Europe.  Toronto Business columnist David Olive described the breakdown in the following way.

What has ended is the ability of the great industrial powers, led by the U.S. and the European Union, to dictate terms of trade to less-affluent nations.
Both the U.S. and EU came into this trade round armed with substantial concessions, notably a pledge to significantly reduce subsidies to their own farmers to help farmers in developing nations where populations are far more dependent on agriculture for their livelihood.
Yet, India and China were not satisfied, insisting on the right to raise tariffs dramatically in the event of “surges” of Western agricultural imports that might jeopardize their farmers. The U.S., in particular, balked at that, rightly noting that no such provision existed in WTO provisions and would be a step backward. And so the talks collapsed. (David Olive Toronto Star, WTO Spells Failure Aug 4, 2008)

I find it quite interesting in western circles regarding farm subsidies as the cause of WTO breakdown.  David Olive is a great columnist and his reflection on the facts is not a lot different than other western writers.  It’s always about European, US and Canadian farmers not wanting to give something up so their markets will be flooded with foreign imports, driving down prices.  There is never any admittance that food might very well be different than for instance an air pump with a built in needle.  However, it would seem the Chinese and Indian negotiators do and the talks collapsed.

Of course the end of this story doesn’t mean worldwide collapse of our global trading system.  For instance more bi-lateral trade agreements will surely be on their way in the vacuum of the WTO failure.  However, when I think of this I always think of the poor bugger in China who made that air pump with the built in needle.  He’s probably starving to death and me at the other end buying it, is just making it worse.

So there are no easy answers when it comes to fairness and equity in our global trading system.  Canada is surely not an island; we need to trade with everybody.  However, remember the next time you buy a cheap do dad at a Wally World or purchase some “Canadian ice cream” with a cheap imported butter oil blend. Are you really being served or should there be a better way?  The equity of the situation surely proves illusive.