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It's hard not to stifle a yawn as the World Trade Organization stumbles towards another humiliating trade negotiating defeat.

But it should be a wake-up call.

The consequences of the WTO's serial failure to get its 160 member countries to agree on virtually anything in recent years is already inflicting a heavy toll on the global economy. Without an updated global rule book, there is little stopping the planet's great trading nations from backsliding into their old protectionist habits. Short-term political gain is trumping longer-term economic well-being.

Nowhere is this more evident than in the area of farm subsidies. This year's massive U.S. Farm Bill has set the world's leading agricultural exporter on a course of ever-larger farm subsidies. These subsidies, including various crop insurance and profit guarantees programs, are conservatively estimated to be worth $1-trillion (U.S.) to farmers over the next decade by the Congressional Budget Office.

Experts warn this will distort global trade because many of these subsidies are targeted at key U.S. exports, such as dairy products. Insurance automatically kicks in when prices fall or production slumps.

"The 2014 Farm Bill fails the test of being consistent with WTO objectives," Colin Carter, a professor of agricultural and resource economics at the University of California, Davis, concluded in the latest issue of Choices Magazine.

Rising U.S. farm subsidies are Exhibit 1 in the case for why the world needs a new trade rulebook in world where agricultural protectionism is still rampant.

The Farm Bill also highlights a U.S. trade posture at odds with itself. The country is becoming much more protectionist in agriculture, while at the same time pursuing freer trade in various regional trade negotiations, including the 12-country Trans-Pacific Partnership.

"This is unfortunate because foreign markets are extremely important to U.S. agriculture and so the industry has a huge stake in increased trade liberalization," said Prof. Carter, a leading agricultural economist.

The U.S. is now vulnerable to a WTO trade challenge because of its subsidies to dairy products in particular, Prof. Carter pointed out. Those subsidies could come back to haunt the U.S.

"There is clearly a conflict between the 2014 Farm bill and the growth in U.S. dairy exports," he said.

Canada is similarly conflicted – preaching open markets, but tightly protecting a clutch of domestic industries, including dairy and poultry.

The finger of blame for the WTO's hapless record of agreement is often pointed at developing countries such as India, which now stands alone in thwarting a deal struck in Bali, Indonesia, to eliminate customs red tape.

That's unfair. It is the U.S. and other rich countries that have the big bucks to spend on the kinds of subsidies that are most likely to hamper global trade patterns. The U.S., the European Union and Japan now account for more than 80 per cent of the $300-billion spent every year on farm subsidies within the Organization for Economic Co-operation and Development, the club of wealthy countries.

But while farm subsidies are generally stagnant in Europe and Japan, they are on the rise in the U.S. The U.S. now doles out an estimated $8-billion a year on various farm insurance programs – more than it spends on foreign aid, conservation and agricultural research and development combined.

In a recent interview with The Globe and Mail, WTO chief Roberto Azevedo suggested that multilateral agreements are the only way to impose true "discipline" on countries. Mr. Azevedo lamented that as trade negotiations migrate away from the WTO to the TPP and other regional deals, the biggest losers will be the world's smallest and weakest economies.

His point is obvious, and sobering. Only a common set of rules makes global trade fair for every country, large or small.

The WTO does have a rule book, but it doesn't rein-in agricultural protectionism.

And it is now 20 years old. The Internet barely existed when the Uruguay Round agreement was concluded in 1994. There was no euro or Facebook. Mobile phones were the size of a small brick, Hong Kong was still a British colony and China's economy was smaller by a factor of 18.

The time is long past for Canada, the U.S. and the rest of the WTO to get serious about forging a new and more effective global trade deal.

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