CETA will challenge Canadian traders

The Comprehensive Economic and Trade Agreement between Canada and the European Union is on track for implementation in 2017, a decade since leaders first began discussions.

So now what?

On March 31, The Western Producer finished a three-part series on CETA, assembled by a team of reporters from Glacier FarmMedia publications. The series explores the advantages and disadvantages of a more open trading relationship with the EU.

The joint project involving writers from The Western Producer, the Manitoba Co-operator, Grainews and Food in Canada is a first.

For the Canadian agriculture sector, new challenges await as it jostles for status as a global trader.

Some analysts such as Laura Dawson, director of the Canada Institute in Washington, view CETA’s significance to Canada as far more fundamental than the potential increase in trade dollars.

“It is the first trade agreement that we have done with a modern in-dustrialized set of economies for more than 20 years,” she said.

The last big deal, the North American Free Trade Agreement, was negotiated before the internet existed and was the first deal Canada negotiated in what she calls the “mega-regional” world of trade.

The Trans-Pacific Trade Partnership followed and there will likely be more to come.

“Canada needs to be a player in the mega-regionals because eventually these mega-regionals are going to converge,” Dawson said.

But there are obstacles. Canadian agriculture faces major technical, infrastructure and cultural hurdles and industry players will have to work together in new ways if they are to turn the European market potential into market share.

The technical and non-tariff barriers are huge. For example, the increased market access for beef is predicated on the beef being raised without the use of growth hormones, which are widely used in Canada.

Despite the potential for lucrative sales, senior industry officials estimate this country produces enough hormone-free beef to fill just one-fifth of the available quota.

With the elimination of country-of-origin labelling laws on cattle and beef shipped to the United States, it’s likely that large-scale operators will continue to focus on that market.

Smaller operators may lack the resources to take the risk of moving into the European market.

But Dawson said the most tangible impediment to Canada extending its global reach is its limited transportation system; it can’t quickly or reliably increase supply for new markets.

That observation was backed up by the recent review of the Canadian Transportation Act, which said Canada has failed to strategically invest in a transportation system that would maintain and grow its competitiveness on the world stage.

But some see another threat holding Canada back — our Canadian nature.

“As someone who is a trade historian and who has watched these trends, Canada has been largely complacent, we’ve been lulled into complacency by easy trade with the United States,” Dawson said. “We haven’t been particularly aggressive in seeking new markets.”

A recent study by the University of Toronto’s Impact Centre found that Canadians culturally are risk averse and they are not as driven to innovate as their American counterparts.

Lead researcher Charles Plant says both qualities contribute to a “lack of aggressiveness” in global trade.

“Canadians, when compared with Americans, tend to be more afraid to take new risks — so they are less likely to try to sell into an area of the world in which they have less experience,” he said.

New agreements open the door to new trade. But turning opportunity into sales requires ambition, a high tolerance for risk and perseverance. Canada has some work to do.

Laura Rance is editorial director at Farm Business Communications.

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