Fixing the blockage of American grain into the Canadian grain elevator system might be the kind of thing that helps save the North American Free Trade Agreement, says a Canadian trade analyst.
However, failing to resolve it could help push NAFTA talks over the edge, worries a southern Manitoba farmer.
“I’m actually not worried about grain coming north,” Gunter Jochum said at the Fields on Wheels conference in December.
“I’m a lot more worried about this non-tariff trade barrier becoming such an irritant that it prevents me from accessing this very important market south of the border.”
A number of speakers at the conference agreed that the regulatory hurdles faced by American grain delivered to Canadian elevators can and should be fixed.
With NAFTA renegotiations leading to a lot of tension and uncertainty between Canada and the United States, resolving this particular border issue could help improve the prospects for saving NAFTA, said Carlo Dade of the Canada West Foundation.
“We’re going to have to give the Americans some wins,” he said.
“This is something that’s been hanging around. It’s low-hanging fruit.”
Indeed, the issue would have disappeared if the previous Conservative government had managed to get legislation fixing the problem passed by the House of Commons. However, the 2015 election happened before the legislation could pass.
There are plans to get the issue sorted out, but progress is slow because it is not a major priority in Ottawa today, a number of speakers and attendees at the conference noted.
American grain can be delivered to Canadian grain elevators, but it cannot be graded as Canadian. That effectively means it has to be graded as feed and cannot be included in export shipments of Canadian grain.
It also means grain companies need to segregate U.S. grain from Canadian grain, which is such a hassle and risk that it has virtually shut down shipments of American grain to Canadian elevators. Meanwhile, Canadian farmers have been delivering millions of tonnes of grain to U.S. elevators.
American grain can be shipped to Canadian processors, and it can be sold to other buyers based on specifications.
Collin Watters, executive vice-president of the Montana Wheat and Barley Commission, said the border blockage is an irritant to northern tier growers that should be eliminated. American farmers feel their grain is being treated unfairly when it can’t be delivered while they see Canadian farmers delivering to their local points in the U.S.
“It doesn’t happen,” he said.
Jochum said clearing the blockage would reduce tensions within a relationship Canada needs to maintain.
“No one wins with a trade irritant. It’s a lose-lose situation,” said Jochum, who farms west of Winnipeg.
“The importance of this relationship cannot be downplayed.… The one next door is the one we should have the strongest relationship with.”