In opening remarks, chair Rick Préjet said 2025 had been marked by “uncertainty, successes and optimism,” while highlighting the importance of export markets.

Those themes carried through panel discussions led by general manager Cam Dahl, who said Manitoba is particularly exposed because of its dependence on export markets.

“Trade really has become a key focus for Manitoba Pork,” he said, noting about 90 per cent of Manitoba production is exported either as live animals or pork products.

The discussion also swirled around tariffs and the increasingly protectionist tone of global trade. Canadian Pork Council executive director Steven Heckbert noted voluntary country-of-origin labelling (vCOOL) was introduced by Democrats, adding that both major U.S. parties have been moving in the same direction.

“We’re fighting a headwind of increased protectionism,” he said.

Trade concerns were also explored in a one-on-one discussion with Manitoba’s senior representative to the U.S., Richard Madan, who said that despite the rhetoric, there is still broad bipartisan support for smooth trade relations in agricultural states.

“Republicans, Democrats and stakeholders all understand the importance of integrated supply chains, and how Canada is part of a strong food supply system,” he said.

Biosecurity concerns also remain front and centre

Biosecurity was the other major focus. Speakers pointed to African swine fever preparedness, ongoing PED control efforts, wild pig eradication and the continued risk posed by senecavirus A. Recent low disease levels in Manitoba were attributed to stronger biosecurity, surveillance and coordination across the sector.

Dahl said protecting the sector depends in part on decisions made at the farm level.

“Don’t ship sick animals,” he said. “It’s not just your farm that you put at risk. It’s the entire Manitoba pork sector.”

The meeting also included discussion of Manitoba Pork’s public outreach and right-to-farm efforts. On the governance side, Margaret Rempel retired as board member at large and was replaced by Harv Toews.

Full coverage of the Manitoba Pork AGM will appear in the next edition of the Manitoba Co-operator.

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In a sign of the escalating squeeze on food supplies and rising prices, a government source told Reuters that India could restrict sugar exports for the first time in six years to prevent a surge in domestic prices.

Meanwhile Indonesia, the world’s biggest palm oil exporter, will remove a subsidy on bulk cooking oil and replace it with a price cap on the raw materials for local refiners.

“It is a major issue, and frankly I think the problem is even bigger ahead of us than it is behind us,” Gita Gopinath, first deputy managing director of the International Monetary Fund, told Reuters of rising food security concerns.

Protectionism is looming large at Davos, prompting calls for urgent negotiations to avoid a full-blown trade war.

“It’s very important for the leaders of the world to sit at the table with calm and talk about how we will manage trade and food and investment,” Jay Collins, vice-chairman of banking, capital markets and advisory at Citigroup told the Reuters Global Markets Forum in Davos.

“There’s a lot of conversations actually with the G7 happening here in the past 48 hours,” Collins said.

Hoarding

For residents in countries in sub-Saharan Africa, for instance, 40 per cent of their consumption is spent on food, Gopinath said. As well as a “huge hit to the cost of living,” price rises have given rise to hoarding by governments.

“We have about 20 plus countries that have put restrictions on exports of food and the fertilizers, and that can only compound the problem and make things worse,” she said on Monday.

Russia’s invasion of Ukraine, which Moscow describes as a “special military operation,” has led to a sudden crunch in a crisis that was already in the offing.

“We were facing an extraordinary food crisis before Ukraine, food costs, commodity prices, shipping costs were already doubling, tripling, quadrupling,” David Beasley, executive director for the United Nations’ World Food Programme, said.

The number of people “marching to starvation” has risen from 80 million to 276 million over the last four to five years, Beasley told Reuters in an interview in Davos.

“To keep the ports closed as the harvest season is now coming in Ukraine in July and August, it means a declaration of war on global food supply,” he said.

Many companies at Davos have been in touch about how they can act to address the food crisis, Beasley added.

‘Not sustainable’

“Agriculture has to be part of the solution to climate change and has to tackle food security,” Erik Fyrwald, CEO of Syngenta Group, said during a panel discussion on Monday.

Fyrwald said Syngenta has demonstration farms that show how farming practices such as not tilling the soil and covering crops in the winter to prevent soil erosion were better for soil, food security and climate change.

Another potential solution to the food crisis is to tackle waste, Gilberto Tomazoni, CEO of JBS, the world’s largest meat processor, told a WEF panel on Tuesday.

“Humanity is faced with two big emergencies at the same time, we need to face climate change and we need to produce more to feed a growing population,” Tomazoni said.

“And the way we are producing today is not sustainable. This is our big, big challenge. Food waste, we need to take on this situation,” Tomazoni added.

— Reporting for Reuters by Jessica DiNapoli, Dan Burns and Divya Chowdhury.

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Canada must finally learn from this hallmark of American politics and calibrate its trade policy to have a stronger industrial focus.

Under the proposed bill, consumers of electric vehicles can receive US$12,500 in tax credits. But to receive the full rebate, the vehicle must be produced by American manufacturers.

The act, not yet approved by the Senate, serves as a response to both economic and environmental crises. It aims to restore the American auto industry while addressing climate change.

Canada’s international trade minister, Mary Ng, says in a letter to congressional leaders that the bill is discriminatory and will cause “irreparable harm” to both Canadian and American auto sectors. Prime Minister Justin Trudeau said he also expressed concern about the rebates and their impact on continental trade in his recent Oval Office meeting with Biden.

Despite their frustration, Canadian policy-makers shouldn’t be surprised. The proposed legislation is among a string of protectionist measures pushed by several administrations.

The Barack Obama administration supported ‘buy American’ provisions in the wake of the 2008 economic recession. Canadian policy-makers complained at the time that the provisions were discriminatory, and they were ultimately watered down.

The Trump administration was especially protectionist. It applied tariffs broadly, including on Canadian steel and aluminum twice. By 2019, the United States was leading the world with more sanctions than at any other period in its history.

Biden signalled his support for America-first provisions during his presidential campaign. The Democratic platform included references to restoring auto sector jobs and increasing electric vehicle sales.

In April 2021, the Biden administration opened a Made in America Office and directed agencies to increase the amount of American content in their purchases.

More broadly, Americans have long offered significant subsidies to their agricultural sector.

The trend line in American trade policy is clear. Protectionism is back on the table in significant ways.

Scholars have argued that crises demand exceptional state intervention to ensure a return to stability. The Biden administration must lead on the environment, the economy, health and social justice while staying politically viable. These pressures leave Biden with little choice.

Ng has already signalled Canada’s intention to fight the American EV rebates. Beyond the Canadian delegation’s recent lobbying visit to Washington, D.C., Ng has argued that the rebates are “inconsistent” with agreements like the Canada-United States-Mexico Agreement, known as CUSMA.

Setting aside the potential success of a challenge, Canada has other and better options.

The Canadian government has often been a driver of industry. Especially before the 1980s, Ottawa used federal subsidies, Crown corporations and strategic infrastructure developments to support industry.

Though these tools continue, new economic thinking has tended to push policy-makers away from their use. Instead, the preference has been to let the markets do the work.

But federal supports continue as a form of regional development. Aerospace, dairy, cod fishing, forestry and petroleum industries each have regional dynamics that help motivate government support.

While not all state inventions are the same as the consumer EV rebates in Biden’s Build Back Better legislation, their purposes are similar. Pro-industry policies help fuel economic growth and social cohesion and can assist governments in achieving other political goals, like net-zero emissions.

Canadian governments have the tools on hand to insulate domestic industries from significant market changes.

These tools are actively used in some areas. The government continues to defend dairy supply management, for example, as critical to our prosperity.

Canadian governments also use tax credits to promote consumption. Without limiting them to vehicles built in Canada, both federal and provincial governments offer electric vehicle subsidies. These subsidies have a similar dollar value to the current American proposal.

There may be reason to believe this is not a sustainable practice. But Canada has few other options.

It appears Canadian lawmakers are still hoping the Americans will exempt Canada from Build Back Better. Ontario’s Conservative government under Doug Ford is resisting electric vehicle rebates, while the Trudeau government continues to appeal to Washington to exclude Canada from the measures.

But even if Canada is successful in stopping the proposed EV rebates, American protectionism is here to stay.

While embracing protectionism is not to Canada’s advantage, holding out for exemptions isn’t good policy. Instead, Canada needs to accept the reality of global trading conditions.

Certainly, there are international responses for Canada. Canada should reflect on its inclusive trade agenda more. This review should include a reconsideration of the value of global trade deals over bilateral agreements.

But Canada should also look inward. Targeted supports to Canadian industries will be needed to weather this protectionist storm.

– Noah Fry is a PhD student in the department of political science at McMaster University.

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A self-declared “doer” with a track record of taking on seemingly intractable problems, Okonjo-Iweala will have her work cut out for her at the trade body, even with Donald Trump, who had threatened to pull the United States out of the organization, no longer in the White House.

As director-general, a position that wields limited formal power, Okonjo-Iweala, 66, will need to broker international trade talks in the face of persistent U.S.-China conflict; respond to pressure to reform trade rules; and counter protectionism heightened by the COVID-19 pandemic.

“What it (the WTO) needs is someone who has the capability to drive reform, who knows trade and who does not want to see business as usual. And that is me,” she said on Monday.

Earlier she told Reuters in an interview that her top priority would be to ensure the trade body does more to address the COVID-19 pandemic, calling the disparities in vaccine rates between rich and poor countries “unconscionable” and urging members to lift export restrictions on medical items.

She also expressed confidence that her priorities were aligned with Washington’s.

“I think our interests and priorities are aligned. They want to bring the WTO back to (its) purpose,” she told Reuters.

The U.S. delegate said that Washington was committed to working closely with her and would be a “constructive partner.” China’s delegate pledged “full support” for her.

EU trade commissioner Valdis Dombrovskis said he looked forward to working closely with her to drive “much-needed reform of the institution.”

A 25-year veteran of the World Bank, where she oversaw a US$81 billion portfolio, Okonjo-Iweala ran against seven other candidates by espousing a belief in trade’s ability to lift people out of poverty.

She studied development economics at Harvard after experiencing civil war in Nigeria as a teenager. She returned to the country in 2003 to serve as finance minister and backers point to her hard-nose negotiating skills that helped seal a deal to cancel billions of dollars of Nigerian debt with the Paris Club of creditor nations in 2005.

“She brings stature, she brings experience, a network and a temperament of trying to get things done, which is quite a welcome lot in my view,” former WTO chief Pascal Lamy told Reuters last week. “I think she’s a good choice.” Key to her success will be her ability to operate in the centre of a “U.S.-EU-China triangle,” he said.

The endorsement of the Biden administration cleared the last obstacle to her appointment and she is due to begin March 1.

Sweet but strong

Okonjo-Iweala, who goes by ‘Dr. Ngozi,’ becomes one of the few female heads of a major multilateral body. When she joins the WTO’s Geneva lakeside headquarters her portrait is set to be hung beside others of men, mostly white and from rich countries.

The Trump administration’s main criticism of her was that she lacked direct trade experience compared to her main South Korean rival and even supporters say she will have to quickly get up to speed on the technicalities of trade negotiations.

She has rejected this, saying that she has plenty of experience of trade, plus other expertise.

Asked about how she took the Trump rejection, she replied: “When things happen you take them in your stride and move on.”

Raised by academics, the mother-of-four earned a reputation for hard work and modesty amid the pomp of Nigeria’s governing class, acquaintances say.

“She is persistent and stubborn,” said Kingsley Moghalu, former deputy governor of Nigeria’s central bank who worked with her when she was the country’s first female finance minister.

Nigeria’s President Muhammadu Buhari welcomed her election, saying it brought “more joy and honour to the country.”

Her appointment also was welcomed by people in the streets of Nigeria’s capital Abuja where Ibe Joy, who works in marketing, said Okonjo-Iweala’s achievements were an inspiration to young women. “If she can do it, we all can do it,” said Joy.

Reforming the unreformable

The 26-year-old WTO that Okonjo-Iweala inherits after a six-month leadership gap is partially paralyzed, thanks to the Trump administration which blocked appointments to its top appeals body that acts as the global arbiter of trade disputes.

But even before Trump, negotiators had struggled to clinch deals that must be agreed by consensus, with the U.S. and other developed WTO members arguing that developing countries, notably China, cannot cling on to exceptions and that rules need to change to reflect China’s economic growth.

Okonjo-Iweala, who is a special envoy for the World Health Organization on COVID-19 and, until recently chair of the board of global vaccine alliance Gavi, said on Monday she wanted to build a framework on pandemic response “so that next time we don’t waste time trying to figure out how to respond.”

WHO director-general Tedros Adhanom Ghebreyesus called Okonjo-Iweala the “WTO’s perfect chief.”

The WTO currently faces deadlock over an issue of waiving intellectual property rights for COVID-19 drugs, with many wealthy countries opposed.

High on the to-do list will also be fisheries subsidies, the subject of the WTO’s main multilateral talks that missed a deadline to conclude by end-2020. She told journalists on Monday she thought a deal on this was “within reach.”

Asked about the challenges ahead, she joked that a book she wrote about fixing Nigeria’s broken institutions could well apply to today’s WTO: Reforming the Unreformable.

“I feel I can solve the problems. I’m a known reformer, not someone who talks about it,” she told Reuters in an earlier interview. “I’ve actually done it.”

— Reporting for Reuters by Emma Farge in Geneva, Alexis Akwagyiram in Lagos and Philip Blenkinsop in Brussels, Abraham Achirga in Abuja, Jan Strupczewski in Brussels and Tom Daly.

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Bill Campbell, president of the Keystone Agricultural Producers, said the key thing he’ll be looking for is clarity on trade, when speaking to the Co-operator the week after the vote.

“Trade will be the primary interest of Manitoba farmers,” Campbell said. “In particular, how the interactions between the U.S. and China all play out.”

Cam Dahl, chief strategy officer of Cereals Canada, echoed the sentiment, saying the tone of trade discussions between those two titans has, in recent years, been tense.

“Is that relationship going to change away from that really antagonistic trade environment?” he wondered.

Dahl says that’s all part of a larger question — will the world turn back towards a rules-based system of open trade? In particular he says he’ll be watching the way the U.S. approaches multilateral organizations such as the World Trade Organization. For the past several years — predating even the Trump presidency — the U.S. has stymied the appointment of appellate judges who hear trade complaints, something that’s rendered the organization toothless in its ability to mediate disputes.

“If that changes, that would be of significant benefit,” Dahl said.

Ryan Cardwell, an agriculture economics professor at the University of Manitoba, says he’s not expecting any radical shifts in the short term. For example, he’s not expecting the same sort of flurry of executive orders that marked the start of the Trump presidency.

“Expect a Biden administration to be more predictable,” he said. “The Trump administration, and Trump in particular, made a lot of unexpected and wild statements — they were going to shut the border down or reinstate COOL (country-of-origin labelling).

“Wild claims create uncertainty, and when there’s uncertainty, you don’t see investments to expand plants and supply chains. If you’re making a decision to expand, boring is a good thing.”

Campbell said he’s also watching to see if the pundits’ predictions that a Democrat president will be a more protectionist president prove out over time.

“I do agree the tone of the message will change,” Campbell said. “The ability to even have some of the necessary conversations might be a lot more easy.”

Carson Callum, executive director of the Manitoba Beef Producers, said that regardless the ultimate outcome of the election and related legal wrangling, his members will remain interested in the same key points.

With the largest two-way trade in beef in the world between the two nations, continuity of trade is the key issue.

Continued economic growth and the future of the WTO also remain of particular importance to the sector, he said.

“These are all of particular importance, regardless of how the outcome is confirmed,” Callum said. “It’s a lot of the same pieces that we’ll continue to push for.”

Cardwell says any change is going to be a slower process than many might think, with change measured in years, rather than months or even a single year.

“Multilateral negotiations take years, no matter who’s in charge, and the WTO appellate body is a year, or even years, away,” he said.

But should they be negotiated, there’s the potential some spillover effects from trade disputes could be wound down.

“There’s the potential for some of these aid programs to U.S. farmers to be curtailed,” Cardwell said. “They’ve been sold as a response to these trade disputes.”

Cereals Canada’s Dahl agreed that it’s going to take some time to sort out the true impact.

“We haven’t seen the cabinet appointments, we haven’t seen the actual policy positions,” Dahl said. “If there’s one thing I’ve learned, it’s that the positions on the campaign trail don’t always translate into the positions when actually governing.”

In the meantime Manitoba farmers have to be patient, Campbell said, and be ready to adapt to whatever new environment they find themselves.

“We’ll see the trade environment, the trade agreements, and how they interact with different countries along the way,” Campbell said. “We’ll see the U.S. Farm Bill, who they appoint as their agriculture representatives and who looks after which departments.

But in the end it’s likely the environment will at the least be more predictable.

“That reduction in chaos and uncertainty is invaluable; that we could see in short order,” Cardwell said.

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“Overall, I think one of the bright spots in a really dark economic situation in the province is our agriculture and agri-food sector,” Rob Roach said. “It’s still producing. It’s still providing an essential service. It hasn’t closed down in the way a lot of businesses have.”

And as Alberta works to rebuild its economy after “one of the worst (recessions) we’ve seen in recent memory,” agriculture could play an important role in those efforts.

“Unlike some other industries, the disruption in agriculture will be less severe,” said Roach. “The industry doesn’t have to restart. It doesn’t have to worry about whether there are still going to be buyers for our products. Agriculture will be spared some of those challenges.”

But there could be challenges, he added. Already, some countries are implementing protectionist policies that could limit or block trade.

“Anxiety is high and they may want to set inward-looking policies as a knee-jerk reaction,” said Roach. “The sector will have to work against that to some degree.”

However, the already-strong reputation of Canada’s agriculture industry may be enhanced.

“I think it’s a real chance for Alberta and the Canadian agricultural system to show the world that we are a high-quality reliable supplier of food to the world,” he said. “Alberta has been helping to feed the world for decades and decades, so this is a real opportunity for us to build on that post-pandemic.

“I think there’s a really bright future ahead.”

— Jennifer Blair reports for Alberta Farmer from Sylvan Lake.

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In its 2020-21 departmental plan, which sets priorities for the upcoming year, AAFC says it will “continue to assist the sector to take advantage of market opportunities and maintain or improve access to international markets, including through the negotiation and implementation of trade agreements, promoting Canadian agri-food products, and by resolving or mitigating market barriers.”

Some potential multilateral trade deals remain highlighted within the plan, which was developed before the pandemic crisis and made public in March.

The federal government is negotiating with the Mercosur block of countries, which includes Argentina, Brazil, Paraguay and Uruguay. Exploratory talks on a trade pact were concluded, and a first round of negotiations launched, in 2018.

Another trade deal in negotiation since 2017 involves the Pacific Alliance, made up of Colombia, Chile, Mexico and Peru, each of which are already have bilateral and/or multilateral free trade pacts in effect with Canada.

The AAFC document also mentions the Association of Southeast Asian Nations (ASEAN), which includes the Philippines, Thailand, Indonesia, Laos, Cambodia, Myanmar and four Trans-Pacific Partnership countries, Vietnam, Singapore, Malaysia and Brunei. Exploratory discussions toward an ASEAN trade pact were launched in 2017 and concluded last September.

The governing Liberal party has previously committed to increase and diversify agriculture and agri-food exports in order to reach its target of $75 billion in exports for the sector by 2025.

AAFC noted “increasing protectionism in other countries” that has led to the introduction of tariffs or non-tariff trade barriers impacting producers’ economic outlooks, but said in its planning documents it will be “advocating for a predictable and stable trade environment” to help to mitigate these risks.

Changes to how AAFC consults with players across the value chain will also come within the next year.

Value chain roundtables, which AAFC now uses as a key component of consultation, will move from being commodity-specific to more thematic-based.

“The department will establish and update sector-specific and thematic tables to address issues in the sector and will formalize opportunities for engagement through a modernized model,” the plan said.

The new roundtable model will also “include opportunities for engaging women, Indigenous peoples, and youth.”

As part of that work, over the next five years, AAFC plans to develop a strategy to offer more “gender-based analysis” in order to address gender gaps across the agri-food value chain.

Gender-based analysis is a theme throughout the document, as AAFC also commits to applying it to all trade agreements and “is exploring the use of targeted calls for program applications to encourage proposals related to underrepresented groups working in the sector.”

Aimed at “creating a more co-ordinated food systems-based approach to food-related opportunities and challenges in Canada,” the Food Policy for Canada launched last summer will also be implemented over the next year, aided by $134 million in funding.

AAFC plans to move the policy forward by helping Canadian communities access healthy food, make Canadian food a top choice domestically and internationally, support food security in remote communities and reduce food waste.

AAFC will be establishing an advisory council on the food policy, with representatives from the agri-food industry, civil society and academia.

Those efforts include AAFC plans to establish the long-awaited “Buy Canadian” promotion campaign, which will include promotional products to advertise Canada’s food system at home and abroad.

A food waste reduction initiative, which will include a fund to “seek innovative solutions to reduce food loss and waste” will be implemented as well.

Other measures are included in AAFC’s 2020-21 plans, including “possible changes to the AgriStability program.”

Calls for changes to business risk management (BRM) programming have long been in the works, highlighted by an AAFC review completed in 2018.

It’s expected an announcement on changes to BRM programs will come sometime this summer, though no mention of that is made in the department’s planning documents.

AAFC is expecting to “explore experimental approaches to program delivery that could provide data and knowledge leading to the growth of domestic markets and the diversification of export markets.”

Those efforts will include a “challenge fund” for innovations in food processing, grocery retail and food service.

“Challenges offer funding and other resources to help global innovators put their ideas into action and deliver meaningful results to Canadians,” the plan said.

AAFC is planning to shift the way agri-environmental research is conducted, according to its plans, by introducing a “Living Laboratories Initiative” using $10 million to “advance agricultural discovery science and innovation.”

The Living Laboratories Initiative will fund collaborative research between farmers and scientists that develops, tests and monitors new practices in a real farm context. Two of five sites in the works have been in operation since April 2019.

A project in Manitoba focuses on climate change, soil health, water health and biodiversity while dozens of people and organizations are involved in a project on Prince Edward Island focusing on subjects such as water management and fertilizer use.

Sites in Quebec and Ontario are being set up this year, with British Columbia establishing a Living Laboratory in 2021.

“The result will be more practical technologies and sustainable farming practices that can be adopted more quickly by Canadian farmers,” AAFC said.

— D.C. Fraser reports for Glacier FarmMedia from Ottawa.

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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.

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A critical component of protecting our trade is using the dispute resolution tools that are part of the agreements we have signed. Canada has a very competent diplomatic service that works with our scientific regulators to help resolve issues that threaten to block trade. The value of these efforts, which almost always occur behind the scenes, cannot be overstated. However, this dedicated work cannot combat the political agendas that are driving protectionism. There are times when we need to move out of the back rooms of diplomacy and publicly defend ourselves.

Canada is the only G7 country that has a free trade agreement with every other G7 country. But when our partners put up trade barriers the question quickly becomes “so what?” What good are trade agreements when countries refuse to follow them? We have tools at our disposal through the Comprehensive Economic and Trade Agreement and the World Trade Organization to challenge Italy’s protectionist country-of-origin labelling requirements. But these tools have not been utilized. We are also able to initiate WTO dispute resolution processes with China but have not chosen to do so.

Dispute resolution processes are long and can be expensive. But the willingness to defend trade agreements sends an important signal to other would-be protectionists, namely Canada is willing and able to defend itself if it is bullied by countries pursuing a protectionist agenda.

Canada also needs to be engaging in proactive measures to prevent trade barriers from cropping up in the first place. This will take resources – time and money – from both industry and government.

One of the ways to proactively prevent border closures is to work together with importing countries to build their regulatory capacity. Canada exports wheat to almost 100 countries around the world. Some customers, like the United States and Japan, have well-developed science- and risk-based regulatory systems that facilitate open trade. But this does not apply to the majority of the markets to which we export.

If regulatory systems are not well developed or lack the human resources necessary to implement a science- and risk-based approach, they can become vulnerable to political or activist interference. When these systems are responsible for approving the importation of Canadian grains, oilseeds and special crops our agriculture sector becomes vulnerable.

Canada needs to develop outreach and development programs that are focused on increasing the science- and risk-based regulatory capacity in key markets. Examples include growing markets in West Africa, Bangladesh, new partners in the Trans-Pacific Partnership agreement and neighbours in Latin America.

The mandate of regulatory agencies like the Pest Management Regulatory Agency and the Canadian Food Inspection Agency should be adjusted to explicitly include regulatory capacity building in key export markets. Also, the agencies need to be given dedicated funds and people to carry out this work.

Trade barriers can also arise because of a lack of understanding of the sophisticated nature of Canada’s production and logistics systems and the regulatory oversight that helps ensure we continue to deliver safe, high-quality food. For example, there are markets for Canadian crops where the capacity and technology employed in Canadian on-farm storage exceeds that of the importing mills. Many concerns raised in these markets are already addressed within the Canadian value chain. Bringing regulators from these markets to Canada, to gain a better understanding of the capacity of the Canadian system, would go a long way to preventing barriers to trade from arising.

There are other areas where additional proactive focus can help prevent future trade disruptions. This includes work through international bodies like CODEX. We need to continue efforts to reform the WTO. And we need to be a leader in the development of strong science-based rules that will facilitate the trade of new varieties developed through new plant-breeding techniques. All of these options require revisions to the mandates of regulatory agencies to explicitly include facilitation of trade and new resources, money and people, dedicated to proactively preventing non-tariff trade barriers.

We have entered a new age of protectionism. A new barrier to agriculture trade is brewing someplace in the world. I don’t know where, I don’t know what commodity will be hit next time, but in our current environment I am sure it is coming. When new barriers arise, Canada needs to be ready to quickly and actively respond using the dispute resolution tools we currently have available. We also need to see governments and industry co-operatively engage in capacity building, regulatory exchanges and other proactive trade facilitative measures aimed at preventing barriers from rising up in the first place.

World attention has shifted away from multi-lateral co-operation. This is not good for Canada. We need to adjust our focus and resource allocation to address the new reality.

Cam Dahl is president of Cereals Canada. Views expressed are his own.

The post Comment: Protecting trade in a protectionist era appeared first on Manitoba Co-operator.

Meanwhile, crop prices are down after a decade of relatively good returns spurring global production to exceed demand, exacerbated now by African swine fever decimating China’s hog herd.

Making it worse, after 25 years of increasing trade liberalism, protectionism is on the rise — exemplified by the expanding United States-China trade war and linked to China’s de facto boycott of Canadian canola seed, and all but dried up soybean purchases.

As a result, MarketsFarms is forecasting a 100 per cent increase in Canadian canola ending stocks when the current crop year ends July 31.

Because of the trade war the U.S. is subsidizing its crop producers, further distorting world markets and undercutting Canadian farmers’ competitiveness.

It raises the spectre of the mid-1980s when surplus world grain stocks and the U.S.-European Union grain subsidy war depressed world grain prices for a decade. That, and other factors, including high interest rates, forced many western Canadian crop producers to quit. Land values started to fall, cutting farmers’ net worth, triggering a downward spiral pushing thousands off the land.

“I am not looking at things optimistically today — maybe it’s just the day — but I do see those who are raising the ’80s and early ’90s as examples and there are a lot of indicators that we’re sort of on the edge of going in that direction,” Cereals Canada president Cam Dahl said in an interview May 16.

“Again if you look back to the ’80s it wasn’t a good time for farmers. Someone asked me the other day if farmers should be concerned, and yes, farmers should be concerned.”

Ironically, last year the value of Canada’s agri-food exports hit a new record at $59.3 billion.

There could be a silver lining though — short-term pain for long-term gain, — says Mike Gifford, former chief agricultural trade negotiator for Canada.

“The Americans have deliberately created a (trade) crisis (as they did with the EU in the mid-1980s grain subsidy war) in order to force change in China and to also force change in the WTO (World Trade Organization),” Gifford said in an interview May 7.

“If there’s a failure in the Chinese-U.S. negotiation then you could be in for a real rocky ride with retaliation and counter-retaliation. If the China-U.S. deal was primarily preferential… then you could be concerned that this would have the effect of unravelling the multilateral trading system… ”

There’s a sense of deja vu, says University of Saskatchewan agricultural economist Richard Gray. The U.S.-China trade dispute isn’t helping, but the real problem is supply exceeding demand, he said in an interview May 15.

“If one set of countries puts a set of tariffs on the other it’s not a big deal, but if there’s too much grain in the world the whole price regime comes down and that’s where we’re at,” Gray said. “That’s where we were in the ’80s and early ’90s as well.”

A whole new generation of farmers hasn’t experienced tough times, especially those farming since 2006 when world grain prices began to take off, mainly because billions of bushels of primarily American corn was being made into ethanol, University of Manitoba agricultural economist Derek Brewin said in an interview May 16.

“The only thing they saw was the positive,” he said.

Normally the cure for low prices, is low prices. Farmers produce less, or sell more and as supply and demand become more balanced prices rise. But the U.S.-China trade dispute and other non-tariff trade barriers, muddy the waters, distorting market signals adding uncertainty and risk.

“It’s the trade dispute that’s causing new risk (to farmers),” Brewin said.

“It makes things significantly worse.”

Last year U.S. President Donald Trump created a $12-billion commodity-specific subsidy program to compensate American farmers for lower prices due to import tariffs China placed on American crops in retaliation for tariffs Trump put on imports of Chinese goods. Of the estimated $9.6 billion (all figures U.S. dollars) paid out, an estimated $7.7 billion, or $1.65 a bushel, went to American soybean farmers.

That makes it harder for Canadian soybean growers to compete.

Trump says the program will run again this year.

“If it’s $1.65 for every bushel they produce then they are not going to reduce their production,” Gray said. “I think it really matters for their production levels. Once this stuff is produced and sitting on the market it’s going to continue to have an impact on price regardless whether it’s the export market or domestic market.”

Even more concerning is Trump’s musing that the U.S. government will buy surplus American grain production and donate it as food aid — something that’s illegal under World Trade Organization (WTO) rules.

Such action is not only tantamount to an export subsidy — also illegal because of how it distorts world prices — but it can destroy local markets making countries even more food insecure by driving subsistence farmers out of business.

Despite the dire outlook, Dahl says Canadian farmers have some advantages.

“If you look right now at the financial stability of grain farmers here and in the U.S. we’re actually in a lot better shape,” he said. “Part of that, of course, is the exchange rate (lower Canadian dollar). But another part of it is our diversity of cropping options. Canadian farmers have been getting market signals and we have a much more diversified crop base and that’a very good thing.”

Arguably it’s a holdover from the 1980s when western Canadian farmers were desperate to find alternative crops, less affected by the subsidy war.

Making matters worse, the United States Department of Agriculture expects global wheat production in 2019 to hit a record of 777 million tonnes.

Most of that wheat will be “middle protein,” Dahl said.

“That distinction is important because we have something a little bit different in CWRS (Canada Western Red Spring wheat) and we’re going on to the world market with a major class that is differentiated from a lot of that,” he said. “Again, that’s a big advantage.”

The fog of (trade) wars

Not all agriculture subsidies are created equal — some can be downright deadly

As a new subsidy war looms, keep in mind agriculture subsidies have always been part of the economic picture for the sector.

They become problematic when governments stop using them for policy goals, like smoothing out the highs and lows of the market, and instead use them as political tools.

In the 1980s and 1990s, the U.S. and European Union were locked in a bitter fight to clear a global grain backlog that saw both subsidize exports, placing Canadian farmers squarely in the middle.

In the end the battle contributed to the transformation of GATT (the General Agreement on Trades and Tariffs) into the World Trade Organization, and the curtailment, if not elimination, of export subsidies.

However, subsidies that didn’t encourage overproduction for the export market still remained.

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