Canada ready to make a deal on NAFTA?

By Tim Kalinowski

When NAFTA negotiations open in mid-August, agricultural issues should not be a main sticking point for any of the sides, says Canadian Federation of Agriculture president Ron Bonnett.
“It interesting to note when talking to some of the American farmers, a lot of what they are saying, like us, is do no harm because I think they recognize NAFTA is working very well. What was tabled by the U.S. so far, I don’t think is surprising. There are a few things in there we would likely support; just as there are a few other things we would not… I am actually only surprised it’s not as harsh as we would have expected given some of the rhetoric uttered through the (presidential) election campaign.”
Bonnett acknowledges supply management remains a bone of contention between Canada and the United States in particular, but he does not feel it is a deal breaker.
“It’s premature to say how hard they are going to push on that. I think one of the things to recognize too is the Canadian dairy industry imports about eight per cent of the product from the United States; whereas in the United States Canada is only allowed about two per cent. So they have some market protection issues there as well. For example, while they talk about our dairy, they also have their sugar industry very well protected. I think in any negotiations there are both offensive and defensive positions, and we won’t really realize where the hard talks are going to be until you get into some of those details.”
Similarly there seems to be widespread recognition farm labour coming out of Mexico is crucial to the North America-wide agriculture industry, and that Mexico is a large importer of certain agricultural commodities like corn and milk.
“Our (Canadian) trade back and forth with Mexico has been working fairly well, and we actually have a fairly good, working relationship with Mexico,” says Bonnett, who chairs a bilateral standing committee made up of Canadian and Mexican agriculture industry representatives. “We tend to resolve issues between us as we go along; so there is not a lot of outstanding issues.”

“One of things I found when I was recently in Iowa is farmers there are really concerned about some of the rhetoric happening in their country against Mexico, and the potential impact on the loss of corn markets,” says Bonnett. “With Iowa, about 65 per cent of their corn goes into Mexico. It has grown to become a huge market for agricultural producers in the States. California ships a lot of milk products into Mexico as well.
“There has been a lot of talk about Mexico down there, and people coming across the border, but I know from looking at the agriculture side the U.S. farmers have very few problems with Mexico.
“And our Canadian farmers have had a good, working relationship back and forth with Mexico,” he adds, “not only in trade and agricultural goods, but also in terms of seasonal worker program.”
Agricultural technology and equipment exports should be largely unaffected by NAFTA negotiations, says Bonnett.
“I don’t think that issue has been raised on either side of the border. Equipment manufacturing is basically international now. It’s not one country’s technology versus another’s.”
Bonnett says the only alarming thing he has seen so far from the American side is in their recently released NAFTA negotiation objectives where they express a desire to get rid of Chapter 19 of the agreement, which lays out a neutral, internally-binding, dispute resolution mechanism when trade conflicts arise between the three countries.
This could be a potential deal breaker for Canada, says Bonnett, but he stresses it’s important for Canadian negotiators to not get out in front of the issue with heated rhetoric or anything like that.
“If I were a Canadian negotiator right now I would keep my powder dry until I find out what everybody is actually putting on the table. And I would say to them just make sure you don’t give away the farm.”
Bonnett says the upcoming NAFTA negotiations should be seen as an opportunity, and not a crisis.
“I think some of the stuff they talk about, harmonization and looking at the regulatory framework, streamlining some of the border stuff, electronic means of recording, etc., these are all things we support.
“There is a sense we needed to relook at this agreement after 23 years. Look at all the stuff that’s changing with electronic and E-commerce even in the last few years. Borders are already dissolving, (in terms of trade), in a lot of key ways which the original agreement could never have accounted for when it was written up.”