Canada between rock and hard place over COOL

Canada appears to be on the edge of unusual trade relation territory with the United States. Federal agriculture minister Gerry Ritz has said that Canada will impose tariffs on products imported from the U.S. as soon as he receives approval from the World Trade Organization. 


The tariffs will be imposed in retaliation to the U.S. government’s continued support of mandatory country-of-origin labelling. The political manoeuvring that follows the WTO’s approval, or lack thereof, will be interesting. 


Given that the WTO stands against trade barriers such as tariffs, is it reasonable to expect that it will give the nod to Canada placing tariffs on U.S. products?


If the WTO approves Canada’s re-quest to implement tariffs on U.S. products, those Canadians using the imported products will feel the pressure from COOL. 


If you assume that the imposed tariffs will cause Canadian importers to react negatively, Agriculture Canada will have a new set of domestic and international pressures to deal with. 


Will the U.S. suppliers receive the intended message? Time will tell.


There appears to be huge opportunity to grow Canadian exports across the globe. To facilitate this potential, the federal government and industry groups have been unflinching in their pursuit of new trade agreements. 


These agreements will hopefully allow Canada to increase its export competitiveness around the world and this line of action is hard to argue with. 


However, there is a key aspect to trade that may make these agreements less than free, namely trading partner commitment.


In the event of a trade dispute, the WTO decisions are based on interpretations of the trade agreements and individual countries’ commitments. In the case of COOL, the U.S. is obviously not committed to free trade with Canada.


With increased focus on exports, Canada is increasingly reliant on committed trade partners. These commitments are often a tangled web of give and take. 


However, if our closest and most cost effective trading partner lacks commitment to our agreed free trade, isn’t it reasonable to expect the same level of commitment, or less, from other countries?


The pursuit of trade agreements are a great first step to driving export profits, but it would be interesting to correlate signed agreements with tangible pounds of exported product and dollars spent to maintain the trade. Such a comparison may assist in identifying where Canadian exports are creating most value for Canadians.


Although the actual pounds ex-ported and the costs of maintaining the agreements vary, one thing appears to be constant with each trade agreement. 


The handshake during the signing ceremony does not seal the deal but is merely an introduction to a yet unwritten story of trade relations.

Ross Macdonald, M.Sc., P.Ag., ranches in southern Saskatchewan.

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  1. These trade agreements only produce trade profits for “some” people in or outside our nation (not “the nation”), if you can glean the products from the Canadian farmers for below their cost of production. The lower below the cost of production the better really. You are basically exporting cheap and stolen raw resources via the export of agricultural products like nitrogen, phosphate, potash, precious water and free farmer labor and off farm labor at far less than they are actually worth. That is akin to a farmer selling the top soil off the land that he rents from his neighbor. For example: By re gathering the manure the farmer has spread on his rented land from his neighbor and maybe going 8 inches too deep to get it while loading, the whole thing can be laundered off to the city without a trace is the type of game plan that would be employed.
    This whole model for Agriculture does not work and is failing badly. Maybe if we get rid of the Crow Rate, no just wait, if we ditch the CWB single desk selling or maybe if we get rid of Supply Management, or maybe if we sell to the Chinese and farmers rent it back, or if Corporations owned everything and farmers just worked on grampas land for wages, or if we kicked the lawn mower maybe then it would finally run right type of wisdom. Being taken advantage of as this article states, is now the order of the day. The top guns at the WTO will not help us, ever. There is no way out, short of getting rid of the trade agreements completely and starting over. It will be messy for a bit, but the hungry world needs us, so it will not last long. And if they don’t need us why wreck things until they do. Doesn’t hurt to keep some resources for ourselves. We might need them some day. Nothing wrong with a little prudence.
    Yes, because of a few free trade promoting Mavericks and their followers, some well placed smoke and mirrors, constant circuses and a grand global slight of hand, we will continue our downward spiral, then crash and burn.
    When things are 75% through the process and are happening right before your open eyes, they are easy to predict.

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