More self-interest in U.S., China would favour Canada

A food-insecure China will hopefully ease up on its belligerent attitude toward its trading partners when it realizes it doesn’t want to cut itself off from supplies of agricultural commodities from major exporters such as Canada.  |  Reuters/ Kim Kyung-Hoon photo

Canada’s best hope for better agricultural trade comes from the United States and China becoming more self-interested.

That’s likely to happen in the U.S. now that Donald Trump appears to be heading for the political scrap heap, and we can hope it’ll happen as China recognizes the disaster its recent belligerent behaviour with so many countries has become.

You didn’t read me wrong. U.S. and Chinese self-interest will help Canada. That’s because Trump’s trade and foreign policies have damaged his nation’s interests, and China’s have ravaged its.

Both countries will benefit from a more rational approach to trade and foreign policy. What each country needs, and the U.S. at least will probably get, is more enlightened self-interest.

For the U.S., that would represent a return to support for rules-based trade and friendly relations with allies like Canada, things that have helped it become the world’s only superpower. President-elect Joe Biden has protectionist tendencies, but he’s not a guy who’s shown a desire to overturn the apple cart for trade or anything else. He’s likely to attempt to bring back some stability for his nation and get it back on track, which means undoing Trump’s reckless combativeness that’s led to such trade and geopolitical mayhem.

China’s the one where we have nothing beyond hope. There aren’t any signs yet that China’s communist party leadership has realized how much damage the country is doing to itself by picking fights with numerous nations.

However, at some point it’s likely that its leaders will see the opportunities China is squandering and move to stop the damage.

That will be when Canada needs to be able to step in and “re-engage” with the giant country and market.

It’s precisely what the Canada West Foundation is pushing Canada’s agricultural exporters and federal government to be prepared for — well ahead of time.

“Whenever the time is right, whenever the situation presents itself,” Canada needs to be ready to get the Canada-China trading relationship back on a better footing, said the CWF’s Carlo Dade in a discussion with Glacier FarmMedia journalists.

“Our approach is that if there’s a convergence of interests, China will (stick with a co-operative trading relationship) because it’s in their interests to do so.”The strategy of re-engagement won’t work while there is intense ire between Canada and China over the detention of Huawei executive Meng Wanzhou and the imprisonment of “the two Michaels,” Dade acknowledges.

But at some point, China, which is food-insecure, is likely to realize it doesn’t want to cut itself off from supplies of agricultural commodities from major exporters like Canada.

Farmers and others might be skeptical that China will easily suspend its anger at Canada, but Dade said it has already done something similar with Brazil.

Its president, Jair Bolsonaro, outraged the Chinese leadership by visiting Taiwan and meeting its leaders right before he was elected. However, as the China-U.S. trade war heated up, China seemed to forget about its outrage.

Since then fleets of soybean vessels have sailed from Brazil to China and it’s hard to imagine that stopping.

The same could happen for Canada if something makes China keen on better access to Canadian farm products. (Despite the dispute, China is still buying large amounts of Canadian commodities.)

“The next thing you know, the Chinese are at the front door again and the relationship’s back on, and trade’s back,” said Dade.

“Things can change quickly.”That’s why Canada needs to be able to roll into re-engagement without a lag, which will require advanced preparations.

“We need that work. We need that thinking,” said Dade.

With a Trumpless U.S., most Canadian trade will probably continue unmolested, and there will be fewer threats of sudden actions, like ripping up NAFTA2.

With China, talk of “free trade agreements” isn’t likely, but a good working relationship is easily conceivable once again. Perhaps there can be a gentlemen’s agreement to leave the politics out of trade.

For each country all Canada needs is for them to practice enlightened self-interest. After the craziness of the past few years that might seem unlikely, but over the long run people tend to get smart about their selfish interests, and that’s all Canadian farmers need.

About the author

Markets at a glance


Stories from our other publications