Canada needs a Team Canada approach to face a decaying multilateral, rules-based trading environment, similar to how it approached the U.S.-Mexico-Canada Agreement negotiations a few years ago.
During these negotiations, Canadian officials attempted to mitigate then-President Donald Trump’s unpredictability by meeting with political and business leaders across the United States to explain the benefits of continued co-operation between the two countries.
Canadian officials and leaders from multiple provinces and political parties put their differences aside and worked together to ensure Canadian interests were protected.
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This initiative was widely touted as successful, and Canada got a much better deal than it would have if the trade team had been plagued with infighting.
This same approach is needed to manage an increasingly frayed international trading environment.
In an Independent Agri-Food Policy paper by Al Mussell and Ted Bilyea, published in September, the two argue that China’s canola dumping investigation is a sign of things to come.
They say the General Agreement on Tariffs and Trade and the World Trade Organization have largely proven robust since they were established, but there have been changes in global economic conditions, and the U.S. now believes these institutions are no longer effective in protecting its interests.
Some of these changes include a breakdown of the WTO dispute resolution function and the rise of state-owned enterprises.
Instead of relying on multilateral agreements, the U.S. and the European Union are increasingly relying on industrial policy to protect their interests.
This is bad news for Canada.
Industrial policy is designed to boost specific industries or businesses and often elicits retaliation from affected trading partners.
Mussell and Bilyea said Canada will be forced into greater alignment with the U.S. as it increases its use of industrial policy, which will put Canada’s agri-food sector in the crosshairs of important trading partners.
For instance, when the U.S. imposed 100 per cent duties on Chinese electric vehicles and tariffs on steel and aluminum products, it was no surprise that Canada matched the policy to protect the $1 trillion annual trade between the two countries.
Mussell and Bilyea say Canada must prepare for increased retaliation against agri-food in this uncertain policy paradigm.
To do this, they say, Canada should leverage agri-food exports as a soft power, pursue plurilateral trade agreements and prevent the acquisition of Canadian agri-food companies by countries more interested in securing food than running a profitable business within Canada’s supply chain.
Canada is likely to require an industrial strategy of its own for export-oriented commodities, which focuses on value added and differentiation with a strong consumer pull, the analysts say.
These are significant changes compared to how business is done today, and it would be difficult for Canadian representatives and officials to achieve any of these strategies in the best of times.
Currently, it will be almost impossible.
Politicians primarily use the House of Commons to get sound bites for an impending election, and when provincial leaders do visit important trading partners, they tend to underscore the divisions in our country.
We need a new, sophisticated approach to trade that can rise to the challenges of an increasingly complicated trade environment. And we need to do this with a united front, as Team Canada.
Karen Briere, Bruce Dyck, Barb Glen, Michael Robin, Robin Booker and Laura Rance collaborate in the writing of Western Producer editorials.
