Countering new trade protectionism

The world has become protectionist.

There is, justifiably, much focus on issues with China. But it is not just China.

Canadian agriculture commodities are blocked in India, Italy, Saudi Arabia, and Vietnam and face issues in key markets like Peru. Countries are turning inward, finding new ways to block trade.

How do we protect our trading relationships when the rules of trade have been thrown out the window?

A critical component of protecting our trade is using dispute resolution tools within the agreements we have signed.

Canada is the only G7 country that has a free trade agreement with every other G7 country. But when our partners put up trade barriers the question becomes “so what?” What good are trade agreements when countries refuse to follow them?

We have tools at our disposal through the Comprehensive Economic and Trade Agreement with Europe and the World Trade Organization to challenge Italy’s protectionist country-of-origin labelling requirements. However, these tools have not been used. We are also able to initiate WTO dispute resolution processes with China, but have not chosen to do so.

Dispute resolution processes are long and can be expensive, but the willingness to defend trade agreements sends an important signal to other would-be protectionists, namely that Canada is willing and able to defend itself.

Canada also needs to engage in proactive measures to prevent trade barriers from cropping up in the first place.

One way to proactively prevent border closures is to work with importing countries to build their regulatory capacity. Canada exports wheat to almost 100 countries around the world. Most do not have well-developed science and risk-based regulatory systems and that can render those systems vulnerable to political or activist interference.

Canada needs to develop outreach and development programs focused on increasing the science and risk-based regulatory capacity in key markets. Examples include growing markets in West Africa, Bangladesh, new partners in the Trans-Pacific Partnership agreement and neighbours in Latin America.

The mandate of regulatory agencies like the Pest Management Regulatory Agency and the Canadian Food Inspection Agency should be adjusted to explicitly include regulatory capacity building in key export markets. And the agencies need to be given dedicated funds and people to carry out this work.

Trade barriers can also arise because of a lack of understanding of the sophisticated nature of Canada’s production and logistics systems and the regulatory oversight in this country. For example, there are markets for Canadian crops where the capacity and technology employed in Canadian on-farm storage exceeds that of the importing mills. Bringing regulators from these markets to Canada to gain a better understanding of the capacity of the Canadian system would go a long way to preventing barriers to trade.

As well, work through international bodies like CODEX and efforts to reform the WTO must continue. And we need to be a leader in the development of strong science-based rules that will facilitate the trade of new varieties.

All of these options require revisions to the mandates of regulatory agencies to explicitly include facilitation of trade.

We have entered a new age of protectionism. A new barrier to agriculture trade is brewing someplace in the world.

When new barriers arise, Canada must be ready to respond using the dispute resolution tools we currently have available.

World attention has shifted away from multi-lateral co-operation. This is not good for Canada. We need to adjust our focus and resource allocation to address the new reality.

Cam Dahl is president of Cereals Canada.

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