When trade minister Sergio Marchi took the world economic forum stage in Brazil last week, his support for free trade was unequivocal.
A free-trade zone of the Americas is desirable in order to protect smaller traders and to leave behind the days “when might equalled right and the rules of the game were unknown,” he said.
Ironically, back home in the day-to-day trade world, Canada’s use of the established rules to protect Canadian agriculture is spotty.
Sometimes, the rules and principles of “free and fair trade” are defended stoutly, with high-profile victories to show for it.
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A far-from-complete list would include last year’s successful supply management defence against a U.S. challenge, the government’s refusal to accept an American cap on wheat exports south and this summer’s World Trade Organization ruling against a European Union ban on imports of hormone-treated beef.
These victories support Marchi’s argument that transparent trade rules help Canada when a spat develops with a trading giant. But there is another, less flattering, side to this story.
In smaller, lower-profile cases, government does not always use fair trade principles and rules to protect Canadian producers. Might sometimes does equal right. Just ask sugar, beef, garlic and pasta producers.
- Sugar: The recently negotiated sugar deal with the Americans restored a bit of Canada’s lost U.S. market for beet sugar. However, it also allowed the Americans to continue operating a damaging sugar re-export program that is illegal under the North American Free Trade Agreement.
- Beef: Cattle producers still seethe over a government political decision last year to offer the European Union a small share of Canada’s imports.
Import of EU product would defy an industry demand that, on principle, no subsidized beef should be allowed into the country.
There are industry suspicions the concession on beef was to pry open more European access for Canadian grain.
- Garlic: This small but growing industry is being hammered unnecessarily by unfair competition despite a Canadian International Trade Tribunal ruling that Chinese garlic is dumped into Canada.
The CITT imposed duties but, in defiance of logic and industry pleas, it offered protection only during the last half of each year when the Canadian crop is harvested and sold.
To the surprise of no one but the CITT, June saw a flood of imports to be stored and sold after July 1.
Now, garlic growers must spend more money to try to convince the CITT to make it a year-round ruling;
- Pasta: CITT illogic surfaces again because it concluded last year that imports of Italian pasta are subsidized and dumped, but do not harm the Canadian industry. Even as they watch price-depressing imports take market share, pasta makers have to go to court to try to overturn the ruling.
The simple truth is that behind the big victories, Canada’s adherence to rules meant to protect Canadian food producers and traders is far from consistent.
