Western Producer staff
Ah, it is time to bask in the joys of the newly-negotiated free-trade era. Or is it? The sugar trade wars being played out in Ottawa and Washington this autumn are a depressing reminder that free-trade agreements often work better on paper than in the real world.
Under the nose of the toughest trade liberalization rules in history, trade barriers are being created in North America that would not look out of place during the 1980s heyday of the grain trade war.
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Briefly, the scene is this:
In Washington, new rules have gone into effect sharply limiting increased access for Canadian sugar and products containing sugar from Canada – increased access that resulted briefly from the 1989 signing of the free-trade deal.
Meanwhile, the U.S. sugar lobby has managed to convince the budget-cutting Republican majority in Congress that the industry needs its protection, subsidies and artificially high domestic prices to survive.
One direct result of U.S. sugar policy is that during the first six months of the year, Canadian imports of U.S. sugar soared 30 percent.
In Ottawa, sugar refineries have launched a campaign to convince Ottawa to give them some protection from European, Korean and American exporters.
Already, Revenue Canada has agreed sugar is being dumped or subsidized into Canada and has imposed temporary duties. Within weeks, the Canadian International Trade Tribunal will rule on whether that dumping is undermining the Canadian industry.
That decision, in turn, will determine if the duties are removed or made permanent. It is a high-stakes game for refiners and the 750 sugar-beet farmers on the Prairies who account for 10 percent of Canada’s sugar supply.
They have concluded that Canada’s open border makes them vulnerable. Protection is the only solution.
How can this be happening, little more than a year after nations gathered in Morocco to sign a world trade agreement and to extol the virtues of free trade?
Graham Blight would tell you it is a prime example of the soft underbelly of free-trade rhetoric: always watch what free-trade activists do, not what they say.
Blight is a straight-talking Australian rice farmer, a free-market ideologue who this year heads the mainstream world farmers’ lobby International Federation of Agricultural Producers.
If there’s one thing he seems to dislike more than export subsidies and trade-distorting policies, it is being lied to.
Like he thinks the Americans did.
“I remember sitting in a room in Washington and being told that once they got the Europeans to the negotiating table, they would drop export subsidies,” he recalled last week while attending a world food meeting in Quebec City.
“They said they were real free-traders. They lied to me.
“Now they’re talking about subsidized wheat into southeast Asia. That’s free trade?”
Watch what they (and we) do, not what they say, in the trade of sugar, wheat, meat and anything else that moves across borders for a profit.
