Farmers, most of whom rely on exports know it, and so does Ottawa as both face rising protectionism
Continuing trade turmoil is top of mind for Canadian farmers and the federal government heading into the October federal election.
The Western Canadian Wheat Growers Association (WCWGA) is demanding the government bulldoze barriers to Canadian agricultural exports. The Canadian Agri-Food Trade Alliance (CAFTA) has issued recommendations to protect and enhance Canadian agriculture and food exports. The Canadian Federation of Agriculture (CFA) wants changes to fill income shortfalls created by trade barriers and subsidies competing farmers get in the wake of price-depressing tariffs and lost markets.
“This fall’s 43rd federal general election is a critical time for candidates from all parties to consider what the federal government needs to do with trade agreements to enable agri-food exports to continue bringing jobs and prosperity to communities across the country,” CAFTA said in a news release.
“Ongoing trade challenges further threaten farm incomes, and are often out of the farmer’s control,” CFA said in a statement. “These disruptions are having real impacts right now on their livelihoods, and will only cause further damage the longer they persist.”
“Unfortunately, our government still doesn’t have a real strategy to deal with the trade problems we have with China, Saudi Arabia, Italy, Peru, Vietnam and India,” the WCWGA said in a news release.
After a decade of generally good returns and stable world markets Canadian farmers have seen prices decline, product costs increase and of late, increasing protectionism and trade uncertainty.
In March China, Canada’s biggest canola seed customer, stopped buying. Since then China has virtually stopped importing Canadian soybeans and blocked pork imports from several Canadian companies.
The federal government is working to address trade barriers, Katie Hawkins, director of communications in Agriculture Minister Marie-Claude Bibeau’s office, wrote in an email June 21.
“Canada is a trading nation,” she wrote. “Our farmers export about half the value of their production. We take the rules-based trading system very seriously and will continue to engage in efforts to modernize and improve the multilateral trading system.”
And the government isn’t a new convert, Hawkins added.
“The government’s work on diversifying trade began when it was first elected, when the prime minister saw an overreliance on too few markets and began working to diversify our trade partners,” she said.
“Over 10 months ago, the government doubled down on these diversification efforts and appointed Canada’s first minister for international trade diversification, with the appointment of Minister Jim Carr, in an effort to make Canada the most globally connected economy in the world. To help our companies tap these markets, we are also making an unprecedented investment in trade promotion.
Ministers Bibeau and Carr continue to reach out to their international counterparts to diversify our trade in global markets, give farmers access to more markets for their crops, and reduce the risk of market closures.”
The government bolstered the cash advance program to assist canola farmers, but other measure are being considered “including discussing possible changes to BRM (Business Risk Management) programming,” she said.
While China claims Canadian canola seed shipments were contaminated with weed seeds and plant diseases, the Canadian government believes it’s in retaliation for the arrest of a Huawei executive at the request of the United States.
Complicating the dispute has been what Canada calls “the arbitrary” arrest of two Canadians allegedly for spying.
Meanwhile, Canadian durum and pulses face non-tariff trade barriers in Italy and India. The same holds for Canadian wheat in Peru and Vietnam and barley in Saudi Arabia
“We call upon the Canadian federal government to immediately resolve these political issues through whatever diplomatic and legal actions necessary including trade retaliation, all the while working with global institutions, such as the WTO (World Trade Organization)… ” the WCWGA release says.
Not all Canada’s trade disputes are ‘political’ though. Some are economic. For example, Italian millers stopped importing Canadian durum after domestic producers launched a campaign claiming Canadian durum was laced with glyphosate, even though residues were within allowable limits.
The news isn’t all bad. Last November, following long and often contentious negotiations, Canada, the United States and Mexico agreed to update the North American Free Trade Agreement. Mexico was the first to ratify the new accord the U.S. dubbed USMCA (United States, Mexico, Canada Agreement), June 19. Canada calls it CUSMA.
Canada is committed to ratification too, but doesn’t want to get too far ahead of the U.S., where some Democrats in the Democrat-controlled House of Representatives are calling for changes to improve labour standards, among other things.
Canada is unwilling to open up the treaty to further negotiation, Prime Minister Justin Trudeau told reporters in Washington, D.C., June 20, where he met with Trump and congressional leaders urging them to ratify the agreement.
Although Parliament is on summer break, Trudeau has said legislators could be called back to debate and vote on C-100, legislation to ratify CUSMA.