Protectionism Trumping Trade? Good trade deals level playing field for Canada
By Tim Kalinowski
Canadian Agri-Food Trade Alliance (CAFTA) executive director Claire Citeau says the importance of international trade agreements like the TPP and NAFTA cannot be overstated.
“We are seeing push back on not just the TPP, but trade agreements in different parts of the world,” says Citeau. “I think it is a bit of a challenging time for trading, in general. This has raised the spectre of increased protectionism. We have seen anti-trade rhetoric in different jurisdictions.
“There is also the misconception that globalization has ground to a halt with things like Brexit, but if you look at the numbers over the past 30 years world trade has increased by about seven per cent a year on average, and more recently between 2005 and 2015, the value of world trade has doubled.”
Citeau says two of the largest beneficiaries of increased global trade have been the Canadian agriculture and agri-food sectors.
“Trade is not easy, but it is essential for these sectors, in particular. In order for our farmers to sell products, we need to find customers outside of our borders… That’s why we need regional trade agreements, and that’s what the TPP would have done for us.”
Which brings Citeau to President Donald Trump’s decision for the United States to abandon the TPP.
“It is a major blow for many reasons,” she says. “First, the TPP is a major free trade agreement, probably the biggest deal negotiated on the planet right now. It is one that has at its core the United States and Japan up until recently, two of our largest markets. It also has some other major markets for us in it. Fifty-five per cent of our (ag.) exports go to that entire region.
“The deal itself was also a modern type of deal,” continues Citeau, “in the sense that it went further than previous deals before it in terms of addressing a number of issues important to Canadian agriculture and agri-food exporters like non-tariff barriers. And also in raising the standards for trade.”
Citeau hopes there is still some life left in the deal, but admits it will be difficult to continue down the path toward Canadian ratification without the U.S. on board.
“There are talks amongst the remaining, willing partners. With all the other partners, none of them have withdrawn at this point. Japan has actually ratified the agreement. Malaysia also. And Mexico has said it’s going to go ahead with proceeding to ratify, alongside New Zealand and Australia.
“The TPP countries have to get together and figure (its future) out. And the main thing is for Canada to really figure something out, and determine its strategy in the Asia-Pacific region.”
The NAFTA renegotiation is another thorny issue which will potentially have a major impact on some Canadian agricultural exports to the United States.
Citing Canada’s $47 billion annual cross border trade in agriculture and agri-food products with the U.S., Citeau says it is incredibly important to keep unfettered trade going between the two countries.
“I think it’s a bit too preliminary to really say what will happen to NAFTA. It really remains a question mark. We are working with officials and lawmakers to make sure everyone, on both sides of the border, understand how trade benefits both Canada and the U.S. What is important is Canadian businesses are united in supporting the Canada/ U.S. trading relationship.”
Citeau says it also important for Canadian ag. exporters to keep looking toward new trade horizons, or risk being left behind.
“The longer we wait (to sign agreements with key markets like the E.U. and Japan), the further we fall behind our competitors. Our hardworking farmers and food manufacturers need our government to open those doors and put us on a level playing field.”