Gloves-off approach demanded on trade issues

Trade supporters call for Ottawa to take action on cases such as an Italian campaign to denigrate Canadian wheat

Edmonton — Canada must respond quickly and sternly to preserve its export markets for agricultural goods in an increasingly protectionist environment.

Marlene Boersch of Mercantile Consulting Venture said protectionism has increased over the past five years and the changing United States approach to trade will not help.

“I have a feeling with the changing climate in the U.S. that other countries feel they can do the same and are becoming more protectionist and that is very, very bad for a country like ours that is dependent on the export markets,” Boersch said during her presentation at FarmTech in Edmonton.

The protectionist rules India imposed last year, where it applies a 50 percent duty on peas and a 30 percent import duty on lentils and chickpeas, have slashed prices for those pulses in Canada.

She said India disregarded World Trade Organization guidelines when they imposed tariffs on pulses that were already sold, and that Canada has to be more assertive.

“Imposing tariffs on goods that were sold a month ago is not correct. If you impose a tariff, usually it’s on the new sales, not on things that are already on the water,” Boersch said.

She said it’s also ridiculous that Canada has to fight with India over its fumigation rules, which is a blatant protectionist trade barrier.

“Phytosanitary agreements between countries are actually binding. We don’t need to fumigate because we don’t have the pests they’re fumigating against. We should be negotiating much harder in my opinion,” Boersch said.

Canadian officials have travelled to India to point out how important and reliable a supplier we are of high quality pulses, but this approach hasn’t appeared to achieve results.

Boersch said it’s time Canada starts using a bigger stick when dealing with Indian trade barriers.

WTO rules prevent Canada from retaliating with tariffs, such as on the fabrics Canada imports from India, she said.

“But we give aid to India. What if we said we will be a bit slow on that, if we can do it. Just something to get the attention that trade is a two-way street,” Boersch said.

Prime Minister Justin Trudeau was scheduled to travel to India for a state visit Feb. 17 – 23.

Another market that’s turning protectionist is Italy, where country-of-origin labelling requirements are being applied to durum.

Cam Dahl of Cereals Canada said this increases the cost of moving Canadian product into the market.

“That was the intent of the provisions, they are intended to be protectionist, they are intended to increase the price of Italian durum. At the same time, we’ve had Italian farm groups that have launched a year-long campaign to denigrate Canadian product,” Dahl said during his presentation at FarmTech.

He said an Italian pasta producer recently told him that during the past year, Canadian durum has gone from having a pristine reputation to now being considered almost poisonous in Italy.

“They have attacked us on things like glyphosate residues, on the presence of DON, on the presence of heavy metals, on the presence of ochratoxin A. They made up stuff, like, Italy didn’t have celiac disease until they started importing Canadian durum,” Dahl said.

He said this smear campaign against Canadian grain combined with the country-of-origin labelling rules the Italian government has implemented have been effective.

Canada is not exporting any durum into Italy now, even though the country was the top destination for Canadian durum in the past.

“Italian pasta producers are taking out advertisements on where they are sourcing their durum from, and Canada is not on any one of those lists,” Dahl said.

He said protectionist pressures are rising around the world in countries that have negotiated away their tariffs and quotas, because they are looking for other ways to block trade.

Canada needs to worry about the precedent this sets for other members of the recently signed Comprehensive Economic and Trade Agreement between Canada and the European Union.

“If Italy gets away with this we’re going to have other countries looking at the same type of provisions to use as trade barriers. We need to challenge this quickly as a country,” Dahl said.

Canada recently signed CETA on the premise that Europe is a single common market. However, if individual countries set up their own labelling regulations, CETA will be much less useful than touted.

“We very quickly are going to see that common market fragment, and the benefits that we were expected to come from CETA aren’t necessarily going to materialize,” Dahl said.

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