As tariffs, duties and other barriers to agricultural trade pile up along the 49th parallel, prairie farmers might be forgiven for wondering whatever happened to free trade.
Wheat and durum shipments to the United States are subject to countervailing duties and anti-dumping tariffs. As well, the U.S. border remains closed to live cattle exports despite scientific evidence that Canada has contained its single case of bovine spongiform encephalopathy and its beef and cattle are safe.
But Canada’s minister for international trade says recent experiences don’t mean that the North American Free Trade Agreement is useless.
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Pierre Pettigrew said the lesson is that trade deals are important and should be strengthened and improved.
“These agreements aren’t perfect,” he said in a recent interview. “But if we did not have NAFTA and did not have panels that we can take the Americans to, the dialogue would be even more difficult.”
Most goods traded between the two countries, including most agricultural products, cross the border with no problem and no publicity, he added.
That is probably cold comfort to cattle producers or wheat exporters, but it’s a view generally shared by trade experts and most farm organizations.
“We have to make the agreements better, not get rid of them,” said Bob Friesen, president of the Canadian Federation of Agriculture.
“We need trade agreements because our future growth in agriculture depends on access to international markets.”
Bill Kerr, an agricultural economist and trade expert at the University of Saskatchewan, said he shares the frustration of cattle and wheat producers who watch helplessly as access to their biggest and most important export market is shut off for what appear to be political reasons.
But tossing out the trade deals that are designed to provide and protect that access would create even more problems.
“What’s the alternative?” he said. “You have to think about it in terms of having some rules that are actually pretty effective most of the time, compared to having no rules, which would be terrible. Having no rules means this type of thing could happen at the total discretion of importing countries.”
But Kerr also acknowledged that dispute resolution rules involve a slow and cumbersome process, which does little to help producers who can’t sell their commodities.
Part of the problem is that when the Canada-U.S. Trade Agreement and then NAFTA were brought in, they were sold as free trade, providing unfettered and guaranteed access across the border.
“But it’s not free trade,” he said. “It’s managed trade and there are still lots of ways that countries can restrict access to their markets.”
Kerr said there are at least three areas in which the trade deals could be improved:
- Providing for a more timely resolution of trade disputes.
- Giving less precedence to national trade laws.
- Setting out conditions under which borders must be re-opened in cases of animal health issues.
Friesen said given recent experiences with wheat and cattle, the Canadian government should push hard in the coming round of World Trade Organization negotiations for clearer and more enforceable rules that take politics out of the decision making as much as possible.
But the National Farmers Union is not convinced of the value of trade deals.
NFU president Stewart Wells said trade relations depend on an uneasy and volatile mix of domestic self-interest, science, health and safety issues, economics and politics.
“I can’t see how any trade agreement can deal with all that,” he said.
No matter what kind of agreements are in place, economically powerful nations will impose their will on smaller trading partners, he said.
Smaller countries should respond by diversifying their trade among as many countries as possible, although that’s difficult for Canada given the proximity of the giant U.S. market, he said.
