The free trade agreement between Canada and the United States has not cleared up irritants between the two countries.
But at least the agreement yielded some rules to handle trade disputes, concluded three members of a panel examining the decade-old Canada-U.S. Trade Agreement.
Not that the dispute settlement rules are perfect, noted William Merkin, who was a member of the U.S. negotiating team.
“Sometimes we tend to ignore the rules if it suits us,” he said.
Merkin, who spoke at the recent GrainWorld conference, noted the agreement didn’t go far in liberalizing agricultural trade because some sectors weren’t interested, like the Canadian supply managed industries, and the U.S. sugar sector.
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“It was a minimalist outcome and many people in the agricultural community were very disappointed,” he said.
U.S. farmers still lack market access to Canadian dairy, poultry and egg markets, said Merkin, and little progress was made on hog and grain issues.
“Bilateral disputes over grain have continued unabated since that time,” Merkin noted.
While U.S. negotiators wanted to focus on trade irritants between the two countries, Canadian negotiators wanted a broader agreement, he said.
“Gosh guys, I feel it was really oversold up here,” he said, adding the moniker “free trade” probably created misconceptions about the purpose of the agreement.
Bill Miner, a trade consultant and former assistant deputy minister at Agriculture Canada, admitted the agreement was probably oversold by its proponents, who claimed it would increase trade, investment and jobs.
The agreement “stopped well short” of accomplishing free trade in agriculture, said Miner. But he noted more than half of agricultural trade between the two countries was already free before the agreement.
In the past 10 years, bilateral trade in agricultural and food products has tripled, said Miner, and was expected to reach $23 billion in 1998.
Canada has moved from a trade deficit of $800,000 with the United States in 1989 to a trade surplus of about $2.5 billion, he said, with biggest increases in processed food products.
A 1997 Ohio State University study concluded freer trade had added $1.4 billion to U.S. agricultural exports to Canada and $1.9 billion to Canadian exports to the U.S., he said.
He noted the Uruguay round of world trade negotiations has also liberalized trade in the past decade, and the decline of the Canadian dollar has made it attractive for U.S. companies to buy Canadian products and invest in Canada.
Ongoing trade disputes have attracted large publicity, but they are more manageable because of rules established in the agreements, Miner said.
“Most of the continuing controversy over the merits of Canada-U.S. free trade appears to be based on emotions and opinions, much less on what I would call analysis and facts,” he said.
Manitoba farmer Owen McAuley said the free trade agreement is better than no agreement at all. Trading with rules is important to farmers because they depend on export trade to the U.S., he said.
Free trade opponent David Orchard said since Canada signed the agreement, it has lost manufacturing jobs, seen record bankruptcies and endured the longest period of sustained high unemployment since the 1930s.
