Canadian trade negotiators should be cautious and be prepared to weather further abrupt policy changes from U.S. president Donald Trump.
A panel on trade and politics at the Seeds Canada conference in Quebec City heard that Canada’s ability to delay trade negotiations could be valuable in finding a way to a successful renegotiation of the Canada-United States-Mexico Agreement (CUSMA).
“Let’s try and keep our head down. Let’s try and kind of play this out as long as we can. This is probably the best thing that we can do in this context,” says Tyler McCann, managing director of the Canadian Agri-Food Policy Institute (CAPI).
Read Also
Farming Smarter receives financial boost from Alberta government for potato research
Farming Smarter near Lethbridge got a boost to its research equipment, thanks to the Alberta government’s increase in funding for research associations.
Michael Harvey, executive director of the Canadian Agri-Food Trade Alliance (CAFTA), says Canada has done well “ragging the puck” in trade negotiations in the past, and it would work well now, too.
“I think that this idea that rules-based trade is gone is wrong,” says McCann.
“Rules-based trade is here. We’re just playing by a different set of rules.”
The rules aren’t being adjudicated by global rules; instead, they are being made by the American president.
“You hope that when it actually gets time to make the agreement to get these finalizations done, cooler heads have prevailed, and that there’s no desire to tear the country apart,” says McCann.
Canada is aiming for a near-term agreement with Trump to stabilize the trading relationship, but will also have to deal with a review of CUSMA, which can start as early as this fall or into next summer.
CUSMA has helped significantly because any goods exported under CUSMA to the U.S. continue to be free of tariffs.
The goal will be to keep what is currently in the agreement, says Harvey.
Trade diversification is a good goal, but he says the proximity of the U.S. and the size of the market overshadow other opportunities, and that’s the reality of the CUSMA negotiation.
“We’re not going to start selling way more to other parts of the world to make up for the fact that you can just drive a little bit. It’s the biggest market in the world.”
Karis Gutter, vice-president of government and industry affairs with Corteva Agriscience, has seen the shift in the American political landscape first hand.
“Boy are things different in Washington,” says Gutter, who has worked for members of Congress and the U.S. Department of Agriculture.
The playbook for managing Washington has been thrown out, he says. No one guessed who would be part of the administration, and new relationships have to be built.
Science and regulations provided goal posts in the past, but an administration filled with skeptics means lobbyists have to up their game when more emphasis could be put on correlation rather than causation, says Gutter.
There could be an opportunity in the trade chaos around the world for seeds and biotechnology, he adds, because the technology still isn’t accepted in many regions.
The Make America Healthy Again movement, which has put a focus on long-term health and potential impacts of pesticides and food additives, is an opportunity for a conversation with an American public more curious about the food it eats, says Gutter.
Changes in Ottawa
Prime minister Mark Carney has pushed for significant change in how Canadian government works, and that means quick pivots for agriculture and those who work in policy, says McCann.
“Very clearly today, things that might have seemed transformational six months ago are no longer seen as transformational,” he says.
Instead, they are the near-term goals.
He says Carney is running out in front of everyone else, and it’s everyone else’s job to try to keep up with him.
“He is going in a direction, and he is going fast, and they are trying to drag everyone along with them,” he says.
That includes the civil service, where leaked guidance from the finance minister suggests up to 15 per cent cuts in program spending over the next several years.
New program spending will have to align with the government’s seven priorities. A letter to everyone in the civil service from Michael Sabia, the new clerk of the Privy Council, prioritized focus, simplicity and accountability.
“I think it’s fair to say that those three things have been missing in how government operates in this country, and the return to those three things is going to be difficult,” says McCann.
Program cuts and refocusing will mean agriculture will have to change how it interacts with the government, he says.
Both Gutter and McCann say the new focus in Washington and Ottawa are addressing long-term challenges in both countries.
In the U.S., trade had been neglected, as had managing immigration, says Gutter. They are now regular parts of the conversation.
In Canadian agriculture, there’s less land being farmed, and while the value of exports has jumped, the volume of exports has increased much more slowly, says McCann.
“If we want to talk about how Canada is this great agricultural power, then I would think that that should mean that we are farming all of the land that we can, and we’ve got farmers that are making the money that they need to make to be expansionist and to be seizing the opportunities that are across this country, but we’re not.”
The changing global geopolitical climate has exposed these issues and made dealing with them more of a priority, says McCann.
