THE FEDERAL government decision to reopen its trade challenge at the World Trade Organization against the United States may indicate it is prepared to take on trade threats beyond country-of-origin labelling regulations.
U.S. protectionist voices are growing louder, brought on by the worldwide recession, and president Barack Obama’s administration has shown little inclination to resist.
On COOL, Canada delayed its original trade complaint made last year after the U.S. made revisions in the final draft. However, when the law went into effect in March, U.S. agriculture secretary Tom Vilsack told American meat packers that they should go further and comply with more stringent voluntary restrictions or he would rewrite the bill.
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That sent the markets into chaos. Many packers refuse to accept Canadian cattle or pigs in the ensuing confusion over how to handle and label Canadian livestock.
There have been other signs that the U.S. government is caving to “buy American” sentiments. There have been discussions within the Obama administration to allow states to exclude foreign-owned companies, including those in Canada, from taking part in projects funded by the $787 billion US recession stimulus package. And, the U.S. has also reopened trade complaints about softwood lumber against Canada.
The recent spate of protectionism is not confined to the U.S. Others include nonscientific bans against Alberta pork headed to China and bans on Canadian pork by about 20 other countries over fears that pork imports could aid the spread of the H1N1 virus. Those fears have been refuted by the World Health Organization.
Continued nonscientific bans on Canadian beef over BSE by some nations, most notably South Korea, also require a strong response, which Ottawa has shown it is willing to take by filing a WTO complaint last month.
Canada’s threatened complaint against the European Union over a ban on the politically hot issue of seal products further demonstrates this government’s willingness to fight protectionism.
We must go further and protect our industries by reaching deals with new trading partners. Such arrangements must include proper enforcement provisions so the pacts can’t be cast aside in favour of short-term political gains.
The announcement that Canada has started trade talks with the European Union, estimated by the federal government to be worth an additional $12 billion per year, is a step in the right direction.
While any agreement will take years to complete, a Canada-EU deal is vital in reducing the risks inherent in having too many trading eggs in one basket, namely the United States.
In the meantime, Canada’s WTO challenge against COOL will likely drag on for years unless a negotiated settlement is reached. But Canada has at least forced the U.S. to the table.
With the winds of protectionism gaining strength, this country must demonstrate it is willing to do what is necessary to keep the shipping lanes open.
Bruce Dyck, Terry Fries, Barb Glen, D’Arce McMillan and Ken Zacharias collaborate in the writing of Western Producer editorials.
