Separate deal may replace TPP

Agricultural exporters hope Canada’s trade efforts don’t stall now that U.S. President Donald Trump has officially pulled out of the Trans-Pacific Partnership

U.S. President Donald Trump hasn’t just disrupted his own country’s trading relations with the rest of the world, but also taken an egg-beater to Canadian agriculture’s trade strategy.

By jerking the United States out of the Trans Pacific Partnership process, by insisting he will renegotiate the North American Free Trade Agreement or rip it up, and by saying he doesn’t like multilateral trade deals, Trump has mashed up Canada’s existing trade strategy. 

Farmers and food exporters are hoping this doesn’t mean Canada’s drive for ever-expanding markets hasn’t stalled or reversed.

“We expect and hope that Canada has a Plan B,” said Gary Stordy, a trade specialist with the Canadian Pork Council.

Claire Citeau, executive director of the Canadian Agri-Food Trade Alliance, is also hoping Canada hasn’t been cut adrift by the U.S. withdrawal from TPP.

“There are a lot more questions than answers at the moment,” said Citeau.

Canada hoped to benefit from the TPP by gaining better access for many products, including beef, to countries like Japan. Vietnam is seen as a likely growing market for Canadian food exports.

With TPP itself dying, countries such as Australia and New Zealand have raised the possibility of creating a TPP-like deal among like-minded countries.

China’s hopes to create a multilateral east Asian trade deal are much brighter now that the TPP is effectively dead.

One of the major driving forces for former U.S. President Barack Obama’s commitment to TPP was its ability to cement U.S. relationships and influence with the nations of east Asia, a region in which there is intense Chinese-American rivalry. Some of the TPP members are now expected to put more resources into forming a regional trade agreement with China.

Canada has already begun exploratory talks with China about a bilateral trade deal and is likely to be more keen on a China-focused Asian multilateral deal now that TPP is on ice. 

As well, the southeast Asian group of countries might be able to form some sort of agreement in which Canada could participate.

However, agriculture and food export experts say Canada’s pathway leads through some dangers as much as it leads to new opportunities.

Canada backed away from bilateral trade talks with Japan when the TPP process picked up, but getting them back up and running might not lead to a quick deal. 

The European Union and Japan are well on the way to forming a trade deal, which will consume some Japanese trade energy. As well, the U.S. might also try to form a trade deal with Japan, which would make quick action on a Canada-Japan deal less likely. 

Australia has better access for beef than Canada, so there is a cost to not getting new deals done. That’s something the Canadian Cattlemen’s Association is anxious to remind the federal government about.

“We need to be engaging directly with the Japanese on our own bilateral,” said Dennis Laycraft, executive director of the CCA.

“The big win for us in TPP was reducing the tariffs in Japan.”

Laycraft said he wants the federal government to focus on signing bilateral deals with countries such as Japan and ensuring that the American people and industries understand the importance of two-way trade with Canada.

With Trump raising NAFTA as an issue, it’s important to make sure Americans understand they sell more farm and food products to Canada than they get in return.

“Last year they had a $3 billion trade surplus coming to Canada,” said Laycraft.

With U.S. politics around trade extremely heated, Laycraft said he hopes diligent work by Canadian agriculture and food exporters and the federal government can prevent anything derailing the trade on which Canadian farmers and agriculture depend.

“We’re on high alert,” said Laycraft.

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