Official says trade experts need to explain benefits of trade to consumers and help mitigate negative effects
Cargill is anxiously watching anti-trade sentiment and is trying to push back.
However, the company believes that reversing anti-trade antipathy will require a multi-pronged approach.
“Each new day seems to bring news of another country leaning further toward economic nationalism,” chief executive officer David McLennan said in a March 28 speech to the Financial Times Global Commodities Summit.
“Countries turn their gaze inward, and attitudes toward trade become more guarded, more self-focused and more inflexible. Such a jaundiced viewpoint eventually leads to the rejection of mutually beneficial agreements in favour of one-sided pacts.”
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McLennan defended the World Trade Organization and trade deals such as the North American Free Trade Agreement and the Trans-Pacific Partnership.
As well, he said in an email that threats by some members of the U.S. Congress to implement a “border tax” are not yet disrupting Cargill’s plans in Canada.
“We certainly are examining the House Blueprint, including its border adjustment mechanism. So far, House (of Representatives) leadership has only issued high-level summaries of what it might look like,” said McLennan.
“Current discussions around the House Blueprint are not impacting our Canadian investment plans.”
Cargill operates in 70 countries with 150,000 employees, so anything challenging the free flow of goods is worrisome. Trade has been good for Cargill, and it argues that it has also been great for consumers, workers and economies around the world.
However, it acknowledged that stopping and reversing anti-trade sentiment won’t just come from dry economic statistics or arguments.
“Agreements now serve as an easy scapegoat for a wide range of social challenges,” said McLennan.
“Trade is not the reason so many citizens face hardships around the world, but it has become a convenient excuse.”
Free trade champions sometimes over-promise on the benefits of trade deals, while opponents demonize many agreements that don’t have the direct negative impact they claim.
To turn the sentiment, trade advocates need to:
- Honestly lay out the benefits that trade can bring, but “clearly dispelling any unrealistic expectations that erode that confidence.”
- Offer new programs to help people whose lives are disrupted by the negative effects of trade.
- Stand up together to defend and champion the importance of trade.
“Today’s global proliferation of ‘me-first’ trade postures threaten to destabilize decades of progress and negotiated agreements,” said McLennan.
Cargill hopes that the death of TPP is “only a temporary pause in the U.S.-Asia Pacific trade relationship,” he added.
As well, the WTO process needs to be defended because it is what allows trade to flow with the confidence that importers and exporters will be treated fairly.
“We need to use the agreements and infrastructure provided by the WTO to demonstrate that open multilateral trade provides a net economic benefit,” said McLennan. “Yes, the processes can be im-proved, but let’s get our leaders back to Geneva to negotiate instead of retreating from the table.”
With NAFTA, McLennan urged policymakers to recognize how reliant the U.S. is upon access to Canada and Mexico.
“Today, one of every 10 acres on American farms is planted to support exports to Canada and Mexico,” said McLennan.
“We have seen U.S. agricultural exports to both countries grow from nearly $9 billion when NAFTA was signed in the ’90s to nearly $39 billion in 2015.
