After a year marked with volatility, trade disputes and continued erosion of faith in rules based trade, panelists at the Canadian Crops Conference, held in Toronto in March, explained challenges in the international trade order and what Canada can do to improve its standing.

How can Canada stand out in a globalized market?

“The rest of the world, the rest of the sectors of the global economy, are finally getting to know what it felt like to be agriculture for a number of years,” said Jeff Mahon, director of StrategyCorp.

He pointed to non-tariff barriers and the weaponization of trade.

Canada has sought to overcome challenges through diversification, but Mahon said this may not be as easy as some are making it out to be.

“This whole movement is driven by, you know, roughly 75 per cent of our exports going to the United States. But the last I checked, Canadian agriculture is already pretty diversified,” he said.

“Telling Canadian agriculture it needs to diversify further is like telling a cayenne pepper it needs to be spicy.”

The questions are — how Canada can grow its market share and how reliant Canada should be on bigger markets like China and India. Mahon said it will be important to recognize there may not be alternatives to those markets and Canada will likely need to continue trading in both.

Win-win thinking

In a global market currently favouring buyers, Mahon said Canada may need to find new strategies to stand out.

“In some cases, that might mean selling more processed or value-added goods,” He said. “In other cases, particularly when we’re looking at new markets in developing countries, we might want to think about bringing a bigger Canadian value proposition to them,” he said.

For example, instead of just offering commodities, Canaa can offer access to a network of capability and research.

This is already happening — for example, Prime Minister Mark Carney’s recent trip to India saw the promise of a Canada-India pulse research centre.

“Now you’re using empathy,” Mahon said. “You’re going to a developing country, India, and you’re saying, ‘what do you need from us?’”

In a country like India, where nutritional security is a concern, Mahon said this type of win-win-thinking could be part of Canada’s strength as a partner.

He added that he’d heard a former Indonesian ambassador suggest Canada could help countries build processing capacity, leading to “mandatory supply chains” with Canadian exports at the centre.

Mahon said he would like to see governments rephrase requests to industry to diversify and rather ask what the industry needs to grow market share.

“Diversification and growing exports isn’t going to work unless Canada fixes some of the supply side problems,” he said.

These may not be entirely an industry issue.

“The government might want to look in the mirror a little bit more if it wants to be able to figure out how to help grow agricultural exports.”

Barriers within international trade

One barrier for Canadian agri-food trade in the EU has been the challenge of adapting to regulatory frameworks. The effects of European policies, like the Green Deal, Farm to Fork strategy, can sometimes be felt in Canada.

For example, The European Commission has proposed a bill that would effectively set pesticide tolerances at zero on imported grains, oilseeds, pulses and other agricultural commodities if those pesticides haven’t been approved for use in the EU.

The EU isn’t a primary destination for Canadian grain, oilseeds and pulses, but exports can be significant some years.

European politicians have argued that this levels the playing field so growers outside of Europe don’t have a competative advantage.

The Canadian government is lobbying for predictability said Greg MacDonald, a counsellor with the Mission of Canada to the EU.

Prime Minister Mark Carney is seen as a close friend in many countries, and now the government is attempting to leverage that, MacDonald said.

People shouldn’t think the EU is “closed for business on agriculture trade,” he added.

MacDonald suggested Canada could continue to work with the EU on regulatory alignment.

“How do we make the regulatory frameworks work for Canada with the broad political overview we have that we’re the trusted and reliable partner, and the EU calls us and asks, how can Canada provide product X?”

A loss of faith in rules-based trade

The past year has also seen attacks on the role of rules-based trade.

Edwini Kessie, director of the agriculture and commodities division at the World Trade Organization (WTO) said he felt the core principles of his organization are “under attack.”

He said the non-discrimination principle and the security and predictability of market access have come into question for some.

“These have been the binding core principles of the WTO, but I think increasingly there are questions as to the effectiveness of the WTO rules in creating a level playing field,” Kessie said.

“We see in the EU specifically, regulatory and policy developments that may be shifting away from some core tenants of WTO rules, which adds to uncertainty in the grains and oilseeds trade,” MacDonald said.

Kessie said the solution is not for the global trade system to turn its back on the existing rules and encouraged stakeholders not to give up on the WTO.

“There are changes which have to be made,” he said. “And I do hope that the WTO members will come together and effect the real changes, which will strengthen the rules-based multilateral trading system.”

“The current prosperity that we are witnessing the world is because of the rules-based system,” he said, “so we need to strengthen it.”

WTO ministerial talks in Yaounde, Camaroon at the end of March struggled to make headway on questions of reform and ultimately broke down after the group could not agree on renewing a moratorium on duties for electronic transmissions like digital streaming.

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The moratorium, agreed at the dawn of the internet, lapsed for the first time in 28 years after World Trade Organization countries failed to agree on a routine extension.

Four days of talks among trade ministers in Cameroon’s capital Yaounde broke up in the early hours of Monday with Brazil and Turkey blocking a bid to extend the e-commerce moratorium, which including on digital downloads and streaming.

Countries also failed to agree on a path to reform.

U.S. Trade Representative Jamieson Greer said in a statement that he has secured agreements from dozens of countries, including nearly all major trading partners, not to impose tariffs on U.S. digital transmissions. He vowed that if the WTO fails to restore the moratorium, “the United States will work outside of the WTO with all interested partners to get it done.”

Greer, who is the architect of U.S. President Donald Trump’s multi-front tariff assault on global trading partners, said he was disappointed that the meeting ended in an impasse. He said some countries demonstrated a “lack of seriousness” in WTO reform by not sending their trade ministers to Cameroon.

“I have always been skeptical of the value of the WTO, and this week’s conference confirmed that this organization will play only a limited role in future global trade policy efforts,” Greer said.

Increasingly sidelined by economic nationalism

The WTO has been increasingly sidelined by economic nationalism in the past decade, and its 14th ministerial conference in Cameroon will further that trend, analysts said.

The talks tested the WTO’s relevance after a year of huge trade turmoil and more recent disruptions in the Middle East.

Still, a subset of 66 members did agree to sidestep previous hurdles to ‌usher in the world’s first baseline deal on digital trade rules among participants.

The parties of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership — 12 countries including Australia, Britain, Canada, Japanand Mexico but not the U.S. — met with the EU on the sidelines of the WTO talks.

As diplomats pursue a mix of agreements between two or larger subsets of countries, they risk creating a complex “spaghetti bowl” of agreements, said Dmitry Grozoubinski, executive director of the Geneva Trade Platform.

WTO Director-General Ngozi Okonjo-Iweala said the trade body hoped the moratorium could still be restored, adding that Brazil and the U.S. were trying to reach agreement on it.

— Additional reporting by Emma Farge in Geneva and Lisandra Paraguassu in Brasilia and David Lawder in Washington, D.C.

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The four-day ministerial talks in Cameroon’s capital Yaounde ended in the early hours with Brazil blocking a bid by the U.S. and others to prolong a moratorium on duties for electronic transmissions like digital downloads and streaming.

“It marks another crack in the foundations of the WTO system,” said Andrew Wilson, Deputy Secretary General of the International Chamber of Commerce, urging delegates to renew the moratorium before states hit digital services with new charges.

‘Major setback for global trade’

Expectations for progress had been low before the talks but there were hopes the moratorium – which has been regularly renewed since 1998 – would at least be extended.

That ultimately proved impossible. Trade ministers could not agree to extend it for more than two years, which was not enough for the United States, diplomats said.

U.S. officials and business groups voiced frustration, and Britain’s Business and Trade Secretary Peter Kyle called the failure to reach consensus a “major setback for global trade.”

The talks were deemed a test of the WTO’s relevance after a year of huge trade turmoil and more recent disruptions due to the U.S.-Israeli war on Iran.Still, a subset of 66 members did agree to sidestep previous hurdles to ‌usher in the world’s first baseline deal on digital trade rules among participants.

Changes looked for

Prior to meetings, three items were expected to dominate talks wrote Jane Kelsey, an emeritus professor of law with the University of Auckland, in an article for the Conversation.

Those were:

• Decision making: reformers proposed a “responsible consensus” model rather than the current multilateral model, which gives all states an equal voice.
• Development and industrialization: this proposed to limit countries’ ability to define their own level of development, Kelsey wrote. “Special and differential treatment” would give them more time to adopt rules applied to more developed countries.
• Leveling the playing field: this was “essentially about China,” wrote Kelsey, which the U.S. says has gained an unfair advantage since joining the WTO. The U.S. wanted rules to restrict state support for industry and to limit application of “most-favoured-nation treatment.”

‘Spaghetti bowl’

Efforts to rebuild the WTO’s predictable trade terms are creating “a spaghetti bowl of free trade agreements, bilateral initiatives, and plurilaterals,” said Dmitry Grozoubinski, executive director of the Geneva Trade Platform think tank.

Agreeing on an e-commerce moratorium was seen as key to securing U.S support for the WTO, which under President Donald Trump has retreated from global multilateral bodies.

WTO Director-General Ngozi Okonjo-Iweala said the trade body hoped the moratorium could be restored and that Brazil and the U.S. were trying to reach agreement on it.

The WTO said progress was made on a reform roadmap, and discussions on issues like reworking its rules to render subsidy use more transparent and facilitate decision-making are expected to continue in Geneva.

The U.S. and the European Union argue China in particular has taken advantage of current rules to their detriment.

Impasse could boost CPTPP

Diplomats worked throughout Sunday to close the gap between Brazil’s initial two-year proposal on the moratorium and the U.S., which wanted a permanent extension, by drafting a plan for a four-year extension with a one-year sunset buffer.

Brazil then offered a four-year extension with a mid-term review clause, but it lacked sufficient support.

Keith Rockwell, a trade analyst at the Hinrich Foundation and former WTO director, said Brazil’s efforts to leverage e-commerce for concessions on agriculture had failed because the U.S. was no longer so invested in the WTO.

“In the old days because they felt responsibility for the system the Americans would have swallowed hard and taken a hit,” he said. “But now they won’t do that anymore.”

He said the impasse would boost alternative structures like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a trade deal encompassing 12 countries including Japan, Britain, Canada, Mexico and Australia – but not the U.S.

“Now what you’re going to see is a lot more energy and momentum into things like the CPTPP,” Rockwell said.

— Additional reporting by Emma Farge in Geneva

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With agriculture and intellectual property both on the agenda at the WTO’s 14th ministerial conference (MC14), running March 26 to 29 at Yaoundé in Cameroon, CropLife International on March 25 called on WTO member governments to “uphold agricultural resilience and productivity and prevent unnecessary trade barriers.”

That said, reform of the WTO itself, particularly its dispute settlement system is a priority on the MC14 agenda, the WTO said in a separate release earlier this month.

“The WTO has long spoken of unfinished negotiations and long-overdue reform, yet too often our promises have outpaced our results,” WTO director-general Ngozi Okonjo-Iweala said. “This conference must demonstrate that this time is different.”

The multilateral, rules-based trading system the WTO represents “plays a critical role in advancing global food security,” said CropLife International CEO Emily Rees said in a release. The conference “provides an opportunity to reaffirm the core principles on which the WTO was built.”

Brussels-based CropLife, in a brief filed with the WTO, laid out recommendations for the ministerial conference in areas where it says WTO members “can act to promote fair, sustainable and innovative agricultural trade,” including:

• sanitary and phytosanitary complaint approaches that support food security through supply chain resilience;
• protections under the WTO agreement on trade-related aspects of intellectual property rights (TRIPS), and
• sustainable agricultural development.

Concerns around sanitary, phytosanitary issues

CropLife called on the WTO to “uphold risk-based approaches” as the foundation for sanitary and phytosanitary measures keeping with the WTO’s agreement. It also would see reinforcement of the Codex Alimentarius — the standards for international food safety — together with the International Plant Protection Convention and World Organization for Animal Health, as “the reference international standard-setting bodies for food safety, plant health, and animal health.”

It called on WTO members to work to resolve outstanding trade concerns around sanitary and phytosanitary issues — especially those related to pesticide maximum residue levels and to avoid such problems at the outset.

CropLife also asked member countries to safeguard the WTO’s TRIPS agreement to drive “agricultural innovation and sustainable growth” and see that patent protection, plant variety rights, regulatory data protection and other IP mechanisms are maintained and strengthened.

As for sustainable development, CropLife called on member countries to seek “inclusive, outcome-focused, and science-based approaches that balance economic, social and environmental objectives, while avoiding unnecessary barriers to trade or innovation.”

It also urged members to avoid “one-size-fits-all or prescriptive requirements” so there’s flexibility for regional approaches that fit local conditions. Member countries’ governments should also not impose sustainability policies on other jurisdictions.

Ag trade

According to WTO briefing notes prepared for MC14, since member countries began negotiations on agriculture in 2000, the value of ag trade has grown to US$1.494 trillion in 2024, from about US$300 billion.

The average applied tariff on agricultural goods, including trade preferences, dropped from 13 per cent in 2005 to 5.7 per cent in 2023, the WTO said, but added that ag and food markets “remain highly distorted,” with support to individual producers estimated at about US$624 billion per year on average in the 2022-24 period.

Recently, “new tensions related to trade and other issues have complicated the challenge of making progress,” the WTO said.

Leading up to MC14, member countries have tabled several submissions on agriculture, trade and food security. These aim to provide guidance on “how to revitalize the agriculture negotiations and overcome (a) persisting stalemate.”

Earlier this month the chair of the agriculture negotiating body, Pakistan’s Ali Sarfraz Hussain, tabled a draft text reflecting members’ submissions.

Most members indicate the text could serve as a basis for further discussion, the WTO said, but “a small number of members stated that they were unable to support it in its current form.”

A call to overhaul trade

On the opening day of meetings, WTO chief Ngozi Okonjo-Iweala called on countries to overhaul global trade rules, telling them the old world order had gone for good, following a year of turmoil sparked by U.S. tariffs and wider geopolitical tensions.

Okonjo-Iweala set out a list of problems facing the World Trade Organization – including the paralysis of its dispute-settlement mechanism.

“The world order and multilateral system we used to know has irrevocably changed. We will not get it back … We must look to the future,” the WTO Director-General said.

Ahead of the session, some diplomats and trade officials warned that without an agreement on reforms, countries could start abandoning the ideal of a rules-based global trade system, and set their own regulations.

Okonjo-Iweala said the body’s problems over decision-making needed to be tackled. Its current consensus-based model has been regularly stalled by objections from some countries. Some delegates are pushing for the organization to let groups of members form agreements.

She also said there was a lack of transparency over which countries were using subsidies.

“Lack of transparency leads to lack of trust, and that breeds suspicions of unfairness and anti-competitive behaviours,” Okonjo-Iweala told delegates.

This contributed to a “vicious cycle” of mistrust which was holding back members from agreeing new rules and reforms, she added.

The U.S. supports reforms but is resisting a detailed work plan, while the EU, Britain, and China back one, internal reform documents seen by Reuters show.

—with files from Reuters

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The paper, released ahead of this week’s triennial WTO Ministerial meeting in Cameroon, underscores the U.S. Trade Representative’s insistence on sweeping reforms that are in line with U.S. President Donald Trump’s trade agenda and allow for more plurilateral trade agreements and differentiated tariffs.

• U.S. Trade Representative Jamieson Greer is expected to attend the March 26-29 ministerial meeting in Yaoundé.
• USTR has already rejected one proposal for reforming the WTO.
• The meeting in Cameroon comes at a critical moment for the WTO as Trump continues to upend the tariff system.
• U.S. says adherence to the Most Favored Nation principle and tariffs negotiated decades ago precludes WTO members from differentiating among trade partners.
• Without naming China, USTR quoted a January speech by Greer in which he said that some countries structurally export more than they import to seek a “shortcut to growth at others’ expense.”
• “In sum, members need to explore options so that they can more easily adjust their tariffs in response to threats to their economies, including from countries that run persistent and large surpluses or drive imbalances by building and maintaining overcapacity,” USTR said.
• The World Trade Organization’s 164 members commit to treating other members equally so they can all benefit from each other’s lowest tariffs, highest import quotas and fewest trade barriers. This principle is known as Most Favored Nation treatment.

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Observers say reforms at the 30-year-old trade watchdog are urgently needed, with some believing the future of the organization is at stake. The WTO did not immediately comment.

Gridlocked negotiations

In particular, the consensus rule whereby all 166 members must agree to pass new trade deals has gridlocked negotiations for years, blocking even those that enjoy near universal support.

Norway’s WTO ambassador Petter Olberg wrote in the December 12 document seen by Reuters that the range of ideas for reforming decision-making meant that the issue cannot be resolved at a ministerial meeting in March 2026. However, he said progress was being made and ministers meeting in Yaounde, Cameroon should agree on a framework to move forward.

The U.S. voiced frustration in a communication sent to members that blockages in the consensus-based system were stopping members from joining plurilateral agreements. These deals allow groups of interested members to strike deals among themselves, with an option for others to sign on later.

It warned that this threatened the organization’s viability and could drive countries to negotiate new deals outside it.

Most Favoured Nation reform

The U.S. also called for reform discussions to address one of the WTO’s core principles – Most Favoured Nation (MFN) – which requires members to treat others equally. It said MFN was designed for an era where trade partners were expected to adopt open, market-oriented trade policies.

“That expectation was naive, and that era has passed,” it said in a statement.

“If the WTO does not reform by making tangible improvements in those areas that are central to its mission, it will continue its path toward irrelevancy,” the U.S. said in the communication.

A diplomatic source cautioned that the U.S.’ position was not widely supported by members.

“The U.S. views on WTO reform are far from those of most members and even challenge the WTO’s purpose and core principles. Simply put, without MFN, there’s no real multilateralism,” the source told Reuters.

Since U.S. President Donald Trump began imposing higher import tariffs this year on most trading partners, the share of global trade conducted under the WTO’s Most-Favoured-Nation terms is down from about 80 per cent to 72 per cent, WTO data shows.

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The embassy statement, in response to questions from Reuters, followed an agreement between Canada and China in June to improve bilateral ties and take initial steps to rebuild their fraught trade relationship.

Why it matters: China retaliated against recent Canadian tariffs on electric vehicles by imposing tariffs on Canadian canola oil and meal, peas, pork and seafood products. 

Prime Minister Mark Carney said on Wednesday that Canada would implement 25 per cent tariffs on steel imports from all countries containing steel melted and poured in China before the end of July.

“Such practices violate WTO rules, disrupt the international trade order, and damage China’s interests,” a spokesperson at the Chinese embassy said.

Carney is trying to protect the Canadian steel industry, which had complained other countries were dumping cheap steel in Canada as a result of the 50 per cent U.S. tariffs on imported steel imposed by President Donald Trump.

Canada already had 25 per cent tariffs on steel and aluminum imported from China and this week tried to crack down on Chinese steel that had been further manufactured in other countries.

China was Canada’s second largest trade partner with C$120 billion of bilateral trade last year, but their ties have frayed.

“Canada’s approach lacks justification in principle, has no legal basis, and will prove ineffective. It will severely undermine normal economic and trade cooperation between China and Canada,” the embassy said.

Carney’s office did not immediately respond to a request for comment.

Carney and Chinese Premier Li Qiang agreed last month to restart trade talks.

Canada’s International Trade Minister Maninder Sidhu told Reuters in an interview on Thursday he was keen for Canadian officials to talk to Chinese counterparts “as soon as possible”.

Last year Canada imposed 100 per cent tariffs on imports of Chinese electric vehicles, squeezing their sales out of the local market.

In March, in retaliation, Beijing announced tariffs on Canadian canola oil and meal, peas, pork and seafood products.

It is conducting an antidumping investigation on Canadian canola, and had expected to issue results of the investigation by September. The embassy said the investigation could be extended for six months under special circumstances.

“If Canada cancels its discriminatory tariff measures against China, China’s countermeasures can also be adjusted, suspended or canceled according to procedures,” the embassy said.

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The speech late on Thursday by Roberto Azevedo, who stepped down as director-general in 2020 during Trump’s first term, was summarized by trade sources who attended a WTO anniversary event.

He said a loss of appetite for shared global trading rules could encourage the creation of a replacement for the WTO that would exclude some current members, adding, according to his team: “If we don’t change, we are dead.”

The current WTO director-general, Ngozi Okonjo-Iweala, told members that a reform process must begin in Geneva ahead of a ministerial meeting in Cameroon next year.

“We need to formulate the right questions to be answered … and put in place a member-owned process to drive it,” she said.

Global markets were ending the week as they began, in turmoil, despite a brief respite on Wednesday after Trump paused duties above 10 per cent for most countries except China.

Until now, talks on updating WTO rules have struggled partly because all 166 members must agree by consensus. Efforts to fix its top appeals court, paralyzed by Trump in his first term, have failed.

Supachai Panitchpakdi, director-general from 2002-2005, said members must reform the WTO urgently.

“It’s either that or we go into a big recession … even worse than the last 2008 financial crisis, because this time it will be trade-led … And then there’s no way to pull out,” he told Reuters.

He proposed to trade delegates on Thursday a month of tariff talks among members, followed by short discussions to reduce barriers and establish new trade rules.

At the same event, a group of 39 states including China, Canada and Britain voiced support for the WTO and called for “bold, collective action” to ensure it remains the bedrock of a free, fair and rules-based system.

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Reuters reported on March 27 that the U.S., the top donor to the WTO budget, had paused its contributions including unpaid dues for 2024 pending a review of its support to international bodies – in a move confirmed by the U.S. government.

Why it matters: The World Trade Organization provides a mechanism to settle trade disputes. In recent days, Canada has initiated a complaint to the WTO about U.S. auto tariffs.

Since then, trade sources told Reuters that WTO staff had been informed about incoming measures to reduce spending such as not replacing some retiring staff or short-term hires.

The WTO, which has 630 staff, said that it has no plans for fixed and regular staff reductions at this time.

“In a recent town hall, the Director-General (Ngozi Okonjo-Iweala) informed staff that in response to the current financial climate, Senior Management is exercising fiscal prudence by curtailing or deferring expenditures as necessary,” WTO spokesperson Ismaila Dieng said in response to Reuters’ questions.

He added that a newly formed ‘Staffing Resource Needs Committee’ would review vacancies and related expenditures.

The measures come against a backdrop of recent U.S. criticism of WTO spending and five years after its top court was paralyzed under Trump’s first term, amid U.S. concerns about overreach.

A U.S. delegate previously raised budget concerns about a meeting to mark the 30th anniversary of the organization which is now grappling with the impact of U.S. President Donald Trump’s tariffs on global trade.

Washington will also raise “systemic concerns” about the WTO’s actions at a meeting on Wednesday, an agenda document showed.

“… It has become readily apparent that the (WTO) Secretariat is moving away from its Member-driven purposes, and is attempting to re-invent itself into a resource to be provided to the public, regardless of Members’ views or the impact that such activities may be having on Members’ interests or budget contributions,” a U.S. delegation document showed.

The WTO budget of 205 million Swiss francs (C$338.6 million) is smaller than many other global bodies, some of which have been badly hit by Trump’s spending cuts.

Delegates say that it would theoretically be easy for any one of the WTO’s 166 members to entirely block the next budget later this year since such decisions must be taken by consensus.

A spokesperson for the U.S. mission in Geneva did not immediately respond to a request for comment.

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Why it matters: The ongoing trade war between the U.S. and Canada has huge implications for Canadian farmers

The request was circulated to World Trade Organization members on Thursday, it said.

Canada claims that the measures, which end Canada’s exemption from additional duties on some steel and aluminum products and increase duties on aluminum articles, and which took effect on Wednesday, are inconsistent with U.S. obligations under the General Agreement on Tariffs and Trade (GATT) 1994, the WTO said in a statement.

— Reporting by Madeline Chambers

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