WINNIPEG (CNS) — As United States President Donald Trump follows his American first policy and pulls out of trade deals, it could spell future opportunity for the Canadian agricultural industry, according to Dermot Hayes, a professor with the department of economics at Iowa State University.
“In D.C., it’s chaotic. It’s the craziest situation I’ve ever seen, we’re shooting ourselves in the foot … I do think the U.S. is behaving so badly that it’s going to create opportunities for Canadian agriculture,” said Hayes on Jan. 24 during the Keystone Agricultural Producers annual meeting in Winnipeg.
Immediately after Trump took office last year he pulled the U.S. out of the Trans-Pacific Partnership. On Jan. 23, it was announced the remaining 11 nations including Canada had reached a deal and would be signing it in March. According to Hayes, this is going to give Canada a leg up on the U.S. for the foreseeable future, even if the U.S. has a change of heart.
“Is it in Canada’s best interest to allow the U.S. back in (to TPP) given that they would have preferential access to Japan and Vietnam? I suspect that the damage is permanent, that the U.S. will never be able to get back into TPP,” he said.
North American Free Trade Agreement negotiations are ongoing as well and for Canadian agriculture it might not be the worst thing if it doesn’t work out. According to Hayes, it could lead to Canada receiving preferential access to Mexican markets.
“In the commodity business, you can’t pay a 20 percent duty if the Mexican producers are paying a duty and if the Canadian producers are not paying a duty. Again, there could be opportunities here for Canada to the detriment of U.S.,” he said.
There is a plethora of opportunities for Canada trade-wise currently as the U.S. digs itself into a deeper hole, according to Hayes. During the KAP presentation he praised the Canadian government’s current approach to trade agreements.
“One of the things I’ve noticed is as bad as U.S. trade policy is right now, Canada has actually got some rational trade policies. You’re cutting a European free trade agreement, a bilateral potential free trade agreement with Japan,” he said.
For Canada there is potential for more trade opportunities, and Hayes expects demand to grow from densely populated Asian countries such as China.
“If (Canada) can get rid of those duties going into China and especially if other countries do not have that access it could revolutionize (Canada). I’ve seen it in Australia. I’ve seen it in New Zealand. When China starts to buy your product, you become prosperous,” he said.