It would seem times are about to get tough for ‘trading nations’ as Canada has styled itself for the past few decades.
That designation makes sense, and in many ways is inevitable. After all, we’re talking about a land mass of nearly 10-million square kilometres, the second-largest country in the world. And on that enormous land mass are just 38 million people, leaving a vast treasure of resources available for export.
That worked well for us when the prevailing global mood was towards freer trade, greater integration and the concept of ‘globalization.’
Now, however, the winds appear to have changed, and there’s scant signs they’ll be shifting back any time soon.
One of the earliest examples of the trend to open markets was formed in the early 1950s in Europe, beginning with the six-nation European Coal and Steel Community, proceeding through to the European Economic Community of 1958-93, and culminating in today’s European Union.
Ironic, then, that a ‘supranational’ state built on a foundation of freer trade has proven such an intransigent treaty partner.
As Glacier FarmMedia’s Alexis Kienlen reports in our front-page story for the Oct. 22 issue of the Co-operator, the much-hyped EU-Canada super trade deal has proven a bust so far for the agriculture sector.
The problem appears to be that the EU is throwing up non-tariff trade barriers, many in the name of ‘food safety’ despite a long track record of efficacy here, and a broad acceptance of our practices elsewhere in the world.
From cleaning products used in meat-processing plants to pesticide use in canola and country-of-origin labelling on Italian pasta, it all adds up to a profound reluctance on the part of the EU to live up to its end of what was supposed to be a grand bargain.
Even worse, there seems to be little will on that end of the negotiating table to get down to the serious work of addressing the underlying issues. As the Canola Council of Canada’s Brian Innes notes in the article, “… we have not seen Europe coming to the table to be serious to make trade work.”
That speaks volumes about just where Europe’s heart lies on the matter, and illustrates that Canada and other countries like it have a hard road ahead of them.
On the other side of the world Australia is experiencing something Canadian farmers are all too familiar with — the capricious nature of China as a trade partner.
The first victim, coming after Australian Prime Minister Scott Morrison sought an independent inquiry over the origins of the coronavirus, was malt barley.
But now, the latest target appears to be cotton. In typical Chinese fashion, it’s an impossible-to-challenge de facto ban, with importers being quietly pressured to halt purchases from Australia under threat of not getting an import quota from Beijing next year.
That’s despite a China-Australia free trade agreement that’s been in force since 2015.
Even nations not directly affected by trade spats with customers are getting side-swiped.
Latin American nations such as Argentina and Brazil, for example, have long benefited from China’s rising star.
But now they’re starting to see their market share threatened by the U.S.-China ‘Phase 1’ trade deal that guaranteed increased purchases of U.S. agricultural products by China. While that trade was slow to ramp up, it is now beginning to grow.
So in a post-globalization world, what’s a trading nation to do?
Here the answers might be found in the tale of another, often vilified, international organization. The Organization of Petroleum Exporting Countries, or OPEC, was formed in 1960 with just five members, later growing to a bloc of 13 nations.
Those countries account for 44 per cent of global oil production and 81.5 per cent of world oil reserves, giving them a major voice in the price of oil and its production and distribution.
While it’s unlikely that the same sort of co-ordination — and restraint — is possible or even desirable when it comes to food production, there is a clear-cut case for trying to work together.
In the corporate world, competing companies do sometimes work together, on what are known as ‘pre-competitive’ issues.
That’s to say, for example, that all car companies can both lobby jointly to prevent steel tariffs, while simultaneously still competing fiercely in the marketplace.
In the case of agriculture, the trading nations can surely all see that capricious non-tariff barriers are a threat to all. As is unpredictable managed trade, with decisions made for political reasons.
It is, at the very least, an idea worth considering. Without it, agricultural exporters are going to face some very difficult times as the newer world order slowly emerges from the ashes of the free trade era.