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Protecting The Canadian Brand



Stéphane Dion may not exactly be a barrel of laughs, but the much-abused former leader of the Liberal party may soon get the last one. That will be when the U. S. imposes a carbon tax – which in some form, is probably what it’s going to do – and Canada, no matter which party is in power, is forced to follow suit in order to maintain good trade relations with the U. S.

On one hand, that will be a good thing – for the environment, for ensuring more petroleum for the future, and for the economy. Those who contend that reducing greenhouse gases (or in other words, reducing your fuel bill) is bad for the economy will soon be compared to those who say hurricanes are good for the economy because they stimulate the construction industry.

On the other hand, it will make Canada look bad in the eyes of others. It’s not a bad thing to be on the same side as the Americans – if that’s the right side to take. But having leaned toward the politics of George W. Bush and conspicuous consumption in recent years, leaning the other way just to stay on the good side of the Americans will make us look like the U. S. lap dog. That’s embarrassing. It’s even more embarrassing if they switch sides before we do.

That’s already happening with greenhouse gas policy, and it happened to some extent last week in an area even closer to home for Canadian farmers.

For years, the federal government, encouraged by officials of the Canadian cattle industry, has been fighting in tandem with the U. S. in a World Trade Organization (WTO) challenge to force the EU to accept beef from cattle treated with hormones. Canada and the U. S. claim that the ban is unscientific.

It doesn’t matter. The EU doesn’t allow its own farmers to use these hormones, and probably never will, so the odds of it allowing a different standard for imports are somewhere beyond slim to none. Meanwhile, Brazil, Argentina and others are eating our lunch by shipping hormone-free beef, or more accurately, Europeans are happily eating lunches of Brazilian and Argentine beef, and not ours.

However, there is a limited quota for imports of non-hormone beef. So last week, the Americans did the sensible thing and effectively called a truce, signing a deal that will allow an additional 20,000 tonnes of duty-free hormone beef imports for the next three years, followed by 45,000 tonnes for the fourth year of the deal.

U. S. government and industry officials were at pains to say this was not a settlement of the WTO dispute and only a first step. True enough, but what it really means is that the two countries have decided not to argue over relatively small issues.

Normally this might have left Canada looking a bit silly as the remaining litigant in a WTO dispute which is technically ongoing but is in reality on the shelf.

Fortunately, this issue can reasonably be claimed as one to be left for the negotiations toward a free trade agreement with the EU, also announced last week. Canada clearly needs to be weaning itself from its dependency on the U. S. for export trade. That would be true under any circumstances but is even more so given the shaky state of the U. S. economy. The timing is also good given Canada’s current stature in the economic world, having been the most pragmatic of all major nations in matters of debt, deficit and financial regulation. That gives us some leverage in establishing our own bilateral free trade deals such as with the EU, and in that respect, the U. S. has been more pragmatic than Canada. It’s been negotiating a series of bilateral trade deals while Canadians – including many in agriculture – stuck to an idealistic if not naive assumption that everything would be worked out at the WTO.

The beef truce between the U. S. and EU is another sign of that pragmatic approach and one to which Canadians need to pay attention. If Canada and the EU can sign a deal reducing tariffs on the things that we want from each other, then that’s good for everyone, including farmers. There’s no point in endangering the deal by getting on our high horse and threatening to take the EU to court to open its borders to things its consumers don’t want to buy, such as hormone beef or seal products. Some battles just aren’t big enough to be worth fighting, especially if you are never going to win.

The relationship with Europe is one that we’ve neglected for too long, and to some extent damaged by getting a bit too cosy with the Americans on some issues, including hormone beef. But it’s impossible to overestimate how the Obama administration has changed things. Ironically, Canada will now have to cultivate the Europeans by getting closer to the U. S. position on some issues, including greenhouse gas reduction. Let’s just be careful we do so without being seen as simply bending with the U. S. wind.

And Canada still has a valuable international “brand” based on our fiscal, social and environmental attitudes and policies. Let’s be careful the Americans don’t steal it. [email protected]



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