At times Canada’s trade situation brings to mind the one-hit-wonder of the 1970s, Stealers Wheel, and their song “Stuck in the Middle With You.”
Instead of clowns to the left and jokers to the right, however, it’s more like canola bans to the east and indifference to the south.
As the international geopolitical ground shifts beneath its feet, a middle power nation like Canada finds itself in an untenable situation.
Our immediate neighbour to the south is locked into a low-key battle, but battle nonetheless, with China. It’s distracted by this upstart challenger on economic, political and other fronts.
And that up-and-coming nation has, for a resource extraction economy like ours, become a key international customer. From coal to canola to natural gas, it’s a big buyer of what we sell.
It means carefully balancing Canada’s relationship with each, and as the past year has taught Canadian farmers, that’s no small thing.
The canola bans have been widely thought to be related to the arrest of Huawei executive (and daughter of company founder) Meng Wanzhou. That was done because the U.S. had issued an arrest warrant for her, and we have a treaty with the U.S.
While many feel we should just kick her loose and be done with it, it’s just not that simple. We’re a nation of rule of law, and we have a treaty with the U.S. We must engage in due process and abide by the rulings of the court. But that principled stand comes at a cost.
The Chinese response has come on many fronts, including detaining, without trial or legal counsel, two Canadian citizens in China. On the economic front, one of the biggest blows has of course been the ongoing ban of canola shipments from two of Canada’s largest grain exporters.
That’s taken a $1-billion bite out of the canola sector, according to figures from the Canola Council of Canada, that met last week, along with the Canada Grains Council, for their annual meeting in Vancouver.
Glacier FarmMedia’s Alexis Kienlen was present, and she filed a story which suggests we’re no closer to a solution today than we were a year ago.
The Chinese government continues to insist the issue is a phytosanitary one, clearly distinct from the diplomatic spat, while at the same time its officials offer little to no evidence of the problem actually existing.
And their hesitance to hold meaningful dialogue has now been met with a brewing domestic crisis for them in the form of the COVID-19 outbreak that, as of press time, had ground regions of that country to a halt.
Even as Canada has sought to aid China in its efforts, and offered it all possible co-operation, their ambassador to Canada, Cong Peiwu said publicly it wasn’t enough to mend the battered fences.
A cynical Canadian observer might find themselves thinking, “Quite right. China hasn’t done nearly enough.”
Meantime, our American cousins have been scant help. Rather than present a united front and working with Canada, they’ve cut a bilateral deal with China that undermines the WTO and the world trade order.
Closer to home they likewise came up with the broad strokes of the CUSMA agreement directly with Mexico while Canada sat on the sidelines, then was forced to play catch-up.
With friends like these, as the old saying goes… it’s unfortunate that, for all the talk of rules-based trading, in the end it really amounts to being a kid on the schoolyard, hoping the local bullies don’t notice you.
It speaks to the need for Canada to chart its own path on the world stage, or perhaps more accurately, to find some friends, and fast.
The European nations have made up for their lack of individual voice by forming the supranational state the European Union. Even with Brexit, that will still represent 27 member states, a population of 445 million people and an economy that’s the second largest in the world.
Some have suggested an economic union that incorporates much of the former British Commonwealth might be a path forward. Even just combining Canada, the U.K., Australia and New Zealand would give those nations some combined heft.
CANZUK, as it’s been called, would have a combined population of 135 million, and a GDP of 6.5 trillion annually.
As countries with similar legal, political and business traditions, and a shared history, there are some compelling arguments to be made for it.
Chief among the arguments against it, of course, are the geographic realities of these countries being at opposite ends of the globe.
Perhaps CANZUK is nothing but a pipe dream in the end. But it makes at least as much sense as hanging on and hoping either China or the U.S. considers the wants and needs of poor little Canada as they duke it out on the world stage.
That’s how you wind up with a black eye and no milk money.