In the aftermath of the Second World War, a number of multilateral institutions, including the International Monetary Fund (IMF) and the World Bank, were established as a result of the Bretton Woods conference to encourage greater economic co-operation between countries.

A third institution, known as the International Trade Organisation, was proposed to facilitate global trade but the organisation never became a reality after its creation was halted by US congress. Instead, 23 countries signed the General Agreement on Tariffs and Trade (GATT) in 1947, which would transform itself into the de-facto international organisation for trade.

The new international trading system facilitated by the GATT proved to be one of the shining successes of multilateral cooperation, with repeated talks between nations around tariff reductions, price dumping, trade barriers and economic development.

By the 1990s, member states realised that the GATT system was straining to adapt to a new globalising world economy. In response to this, member countries began the Uruguay round of talks which eventually established the World Trade Organisation after years of sensitive discussions, particularly around agriculture.

More than 120 countries signed the Marrakech Agreement, which established the WTO to deal with the regulation of trade between countries by providing a negotiating framework for trade agreements and a dispute resolution process to make sure participants adhere to such trade agreements.

The success of the WTO is grounded in its ability to provide a multilateral democratic forum for governments to cooperate globally and facilitate trade in a global marketplace. As the trade barriers and tariffs have come down, the economic development of the world has greatly improved, with greater cooperation between nations.

In 2001, the WTO launched the Doha round of talks as a follow-up to the Uruguay round aimed at making globalisation more inclusive with an emphasis on developing nations. However, the Doha round of multilateral discussions have dragged on for more than 13 years, leaving many countries frustrated by the stalemate.

As a result of this, a number of bilateral and plurilateral trade proposals have emerged, outside of the multilateral forum facilitated by the WTO. Examples include the proposed “mega-regional” trade agreements such as the Transatlantic Trade and Investment Partnership (TTIP) between the US and EU, and the Trans-Pacific Partnership (TPP).

Similarly, discussions around the proposed EU-Mercosur trade agreement recommenced in 2014, although issues surrounding food safety standards, traceability and animal identification are still major stumbling blocks.

Proposed trade agreements like these illustrate how Europe has shifted its position on trading with some regions. The EU has switched from blocking trade agreements to protect indigenous interests from rival low-cost markets to actively seeking major trading partners as it seeks to kickstart the wider European economy.

Asia is the market that every nation wants trade access to right now. Western countries view the rapid population growth and rising GDP in Asia as a potential cash cow, but the emerging economies of the world’s largest continent, particularly China, have their own agendas.

On the back of its economic rise, China has sought to increase its influence on the international financial institutions created at Bretton Woods but it has found that the interests of the US and developed nations lie at the heart of these organisations.

In response, China has set about creating its own institutions to project its agenda on the international stage such as the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (formerly the BRICS bank) as alternatives to the US-dominated World Bank and IMF.

China has also set about creating its own bilateral trade agreements with strategic partners outside of the WTO forum such as the free trade agreements signed with New Zealand and Switzerland with a similar agreement with Australia close to being finalised.

As China continues its rise to compete with the US to be the world’s leading economic power, the multilateral global financial and trading institutions we have always known will face competition from new institutions with the interests of developing nations at heart.

Impact

A more open global trading environment will present both opportunities and challenges for Irish agriculture. As an exporting country we must accept that free trade flows both ways. Individual sectors may at times lose out but the overall long term gain needs to be considered. Whatever the outcome from these international trade talks, the different production and regulatory systems must be taken into account in the negotiations.

The main sticking points around agriculture between the EU and US centre on hormones and GM. In the future if the EU is to initiate negotiations on a major trade deal with developing nations, the discussion will more likely focus on agricultural subsidies and protection where the poorer countries feel they are at a significant disadvantage.

Hormones

As the US and the EU look to strike a deal on the TTIP agreement, the main sticking points during negotiations around agriculture have centred on hormones in beef and GM crops.

US policy makers are eager to open the European market fully to US beef but consumers here have always seen the growth hormones American farmers inject their cattle with as unsafe and dangerous.

With 90% of all US cattle injected with growth hormones, the EU implemented a ban on hormone-treated meat and meat products entering the market.

For similar reasons, the European Food Safety Authority (EFSA) banned the use of almost all GM crops in Europe since the first genetically modified plants were developed in the early 1980s. Earlier this year, the European parliament voted to lift the EU-wide ban, instead allowing national governments to impose their own restrictions.

However, most European governments remain firmly against GM crops and are unlikely to allow them to be used by farmers.

Read more from this year's KPMG/Irish Farmers Journal Agribusiness report here.