Canada looks for Plan B on trade in wake of Trump win

With trade deals on the chopping block, Canada hopes other countries will step into the ring to keep the TPP deal alive

The tumblers are spinning as Canadian farmers and agricultural exporters try to figure out how to unlock the new world trading reality.

With the Trans Pacific Partnership likely dead and the Canada-European Union free trade likely to succeed, Canada’s agriculture and food producers are facing a new set of locked and unlocked doors.

“With TPP off the table, it’s too bad, but CETA (the Canada-E.U. Comprehensive Economic and Trade Agreement) is one good agreement we can use,” said Paul Gregory, a farmer from Fisher Branch, Man., who exports both honey and forage seed.

“Any kind of trade agreement is great.”

U.S. President-elect Donald Trump has promised not to sign the TPP, and the hopes for any large or improved multilateral trade deals also appear to be dimmed to a mere flicker.

CETA almost died because of regional opposition in one EU member and still needs official approval within the EU’s byzantine political and bureaucratic system.

As well, Trump often said during the election campaign that he was going to try to force a renegotiation of the North American Free Trade Agreement.

It’s a remarkably different export market outlook than two years ago, when Canadian farmers and food exporters were looking at the development of a much more open world trading environment. Now the doors appear to be shutting.

However, export-oriented officials and politicians don’t see the situation as too grim.

“We wouldn’t be surprised if other TPP partners are now interested in bilateral agreements,” said Gary Stordy of the Canadian Pork Council. “If this collapses, it won’t be a lost effort.”

Stordy said Canadian hog farmers and processors are hoping for immediate action to revive al-ready-established Canada-Japan trade talks, which were put on the backburner while the TPP talks went forward.

Vietnam and other TPP members, and those who said they wanted to join TPP in a second wave, are probably also willing to consider bilateral deals if TPP dies.

“We’ve been advocating for Canada to have a Plan B should TPP essentially fall apart,” said Stordy.

Gerry Ritz, a former Conservative federal agriculture minister, said he not only thinks bilateral deals should be pursued if TPP dies but also thinks TPP can be salvaged without the U.S.

“With like-minded countries like Canada, Japan, Mexico, Australia, New Zealand and so on, we’d still meet (the requirements for TPP approval if it is reformulated to exclude the U.S.),” Ritz said.

He also thinks Canada can find lots of other willing trade partners if it looks further afield than the U.S.

“There’s no reason to think that Canada couldn’t move ahead and start to become part of the deal with the (southeastern Asian) group of countries. There’s no reason to believe the Philippines and South Korea aren’t sincere when they talk of joining TPP,” said Ritz.

“Then there’s other major markets, like China and India, where we’ve begun the ground work.”

Canadian Federation of Agriculture president Ron Bonnett said CETA is a good deal to have in the pocket, but even greater gains can probably be achieved in the opposite direction.

“It likely increases (its) importance, but not as much as Japan. I think Japan is really the big one for us,” said Bonnett.

So are other TPP members that are likely to be open to bilateral deals.

“Just the fact that TPP is off the table, it might fast track putting these alliances in place.”

However, a lot of energy is now going into defending access, Bonnett said in an interview during day-long meeting with Mexican agriculture and trade people discussing NAFTA and Canada-Mexico issues.

Trump attacked NAFTA while campaigning, so Canada and Mexico need to be able to defend the value of having an open North American market.

“Both of us have an interest in this trading relationship between the three countries,” said Bonnett.

Encouraging pro-trade U.S. farm and food groups to talk to the Trump administration about NAFTA’s benefits will likely bring better results than just having foreign organizations from Canada and Mexico saying the same thing.

“Having people within the United States talking about the benefits of an ongoing trade deal will be even more important than somebody outside telling them that,” said Bonnett.

James Hofer, a farmer from Starbuck, Man., said he was excited a year ago about the prospects of both CETA and the TPP. He saw nothing but benefits for his Hutterite colony from the deals, which would increase demand and stability for his livestock and crops. 

Since then, CETA has become mired in seemingly endless complications, and TPP is on the point of death. He has felt disappointed and has had trouble watching these developments unfold.

“After all of this talking and hemming and hawing, I have kind of stopped following it.… They don’t know how to make a deal, by the looks of it,” Hofer said. “I don’t know why people are making it so hard to make a trade deal.”

Gregory said he’s hopeful about CETA, but said the last year of complications and challenges with EU regulations make him less confident about future market access.

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