The trading world is abandoning an historic balance between government and private sector power because the attention of trade talks is always on reducing government involvement rather than disciplining trader practice, a University of Manitoba economist told a trade conference last week.
Brian Oleson, a former senior Canadian Wheat Board official who moved to the university’s agricultural economics faculty, said there is an “obsession” among trade officials about government influence.
Yet more than half of the world’s 100 largest economic units are private companies and not countries, he said April 19 during a panel discussion at a federal-provincial conference on trade policy.
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“As we move more and more into a liberalized trade world, the obsession on every aspect of government involvement, however minor, isn’t really the question in my mind,” said Oleson. “It seems to me there is a balance we may lose because we have had this historic focus on government.”
In a later interview, Oleson said the issue for those who set trade rules should be whether trade actions contravene rules, rather than whether government is involved.
“The American approach is to put layer on layer on layer of farm support in reckless abandon and yet they are focussing on some very small issues in terms of the government role in dairy policy or the Canadian Wheat Board.”
Exempt from rules
He noted that European Commission intervention agencies do not even qualify as state trading entities subject to World Trade Organization disciplines, while the fact that there is enabling legislation for supply management agencies qualifies them as STEs and the target of other countries’ trade negotiators.
“If you have farm programs which turn the tap on production, you have a problem,” he said. “Canada’s supply management has not turned the tap on production.”
EU and U.S. subsidy programs do.
Meanwhile, private trading companies continue to grow and to claim a larger share of world commerce.
“As you go into a world where many of the very largest private enterprises are far larger than most of the GATT signatories, there is a different ball game emerging here,” said Oleson. “If we only have an obsession with the role of government and nitpick that to death, we really leave the barn door open in many other areas.”
