U.S.-Canada trade concerns manageable

Dairy


Meeting the American government’s agricultural demands shouldn’t be too hard, say leading Canadian politicians and farm representatives.


And the looming North American Free Trade Agreement renegotiation should be seized upon as a way of making future trade flow more freely, they say.


After meeting with U.S. Secretary of Agriculture Sonny Perdue, in Toronto June 5, federal Agriculture Minister Lawrence MacAulay felt that a co-operative relationship is forming.


“It was a good meeting. The rapport was excellent,” said MacAulay June 8. “If there’s a problem, and there will be (sometime), he’ll always take my call and I’ll always take his call.”


Perdue visited Canada to participate in the 10th anniversary of the Southeast U.S.-Canadian Provinces trade promotion conference, a forum he helped create while governor of Georgia.


While in Toronto, he laid out U.S. concerns about Canadian agriculture, including:


  • Canada’s new dairy pricing regime, which effectively cuts out U.S. ultra-filtered milk and that he thinks should not be used to move Canadian dairy products into the world market.

  • Grain grading that causes ungraded grain to be automatically classed as feed if delivered to an elevator.

  • Provincial wine authorities that favour local production and do not provide U.S. wine with equal visibility.


The dairy issue did not seem to raise too many concerns with MacAulay or Conservative international trade critic Gerry Ritz. Both had the impression that the new Class 7 would just have a domestic market effect and not lead to exports.


“We can’t (export,)” said Ritz, referring to the provisions of a 2003 World Trade Organization deal in which Canada agreed to not allow farmers involved in supply management to export dairy products beyond a tiny limit.


“Anyone holding quota in the Canadian supply management system is ineligible to export.”


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MacAulay said the Class 7 innovation “was a deal put together not involving government. It was processors and producers.” Therefore it should not be a technical or real problem.


The grain grading issue has been vexatious for both American and Canadian grain officials and politicians. The previous Conservative government tried to fix the differential treatment of identical varieties of Canadian and U.S. grain, but the legislation it introduced was not passed before the former government fell.


“I told him we would be consulting with our farmers and taking a look at the act,” said MacAulay.


Jeff Nielsen, president of Grain Growers of Canada, said the issue could be cleaned up quite easily.


“It’s a small irritant,” said Nielsen, who thinks the issue can be fixed outside of NAFTA through regulatory changes.


“I can totally understand (U.S. farmer irritation). It can be handled without getting too deep into NAFTA.” 


Cam Dahl, president of Cereals Canada, doesn’t think farmers need any convincing to fix up this issue. Few objected when the previous government attempted to fix it.


“It doesn’t matter if a registered variety is grown in North Dakota or across the border in Saskatchewan, there’s no reason not to give equal treatment,”  said Dahl.


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Ritz said fixing this issue in the Canada Grain Act wouldn’t be a problem.


“It’s a bit of a tempest in a teapot,” he said. “If that’s all it takes to keep them happy, we could do that tomorrow.”


Alcohol retailing is a provincial responsibility, so addressing American concerns needs to be done by provincial authorities. However, MacAulay and Ritz didn’t feel the issue would jeopardize NAFTA talks.


It’s not just the U.S. that can raise its concerns in a NAFTA renegotiation. Canada also has a chance to bring forward its own ag agenda.


No major issues were raised by Nielsen, Dahl, Ritz or MacAulay, but all agreed that a modernized NAFTA should make North American trade flow better than it does today.


Regulatory duplication, such as requiring unnecessarily redundant meat inspections, could be eliminated. Harmonizing chemical and other input approvals would also be a big gain for Canada because farmers can sometimes be caught between two regulatory systems.


However, MacAulay said details of Canada’s agricultural requests won’t be defined until the NAFTA renegotiation process is clear.


“We have to wait to see how the table is set before we can make any demands,” said MacAulay.


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