A change of power in the United States will likely bring some predictability to agriculture and rural affairs in that country and in relationships with our American cousins.
However, predictions suggest those changes might not all be in Canada’s favour.
America is under a lot of pressure to perform and when it comes to international trade relations, the country won’t cut much slack to Canada and Mexico.
Prior to the Trump years, Republican administrations were typically in favour of freer trade and less intervention in their economy and that included lower subsidies for agriculture. The Trump version of republicanism was quite different. Even in rural America, it is believed Trump bought rural and farm votes with executive orders that reduced regulation and large direct payment schemes.
In the past two years more than 40 percent of farm income in the U.S. came from government payments.
President-elect Joe Biden will likely find that two years of $90 billion payments to farmers won’t fit well inside the World Trade Organization’s amber box. Continued payments would also be a big pill for the average American to swallow, so that trade distortion will likely be reduced in the new administration. So that’s a good thing.
Trump had all but ignored the WTO, refusing to appoint judges to its appellant body. That rendered it unable to settle trade disputes. It is expected that Biden will resume relations with the WTO but that might come back to haunt him when it comes to agriculture.
On the downside, Canadian livestock producers will recall that the WTO ruled against the American country-of-origin labelling policy. Biden’s platform has a strong emphasis on “American First” so COOL could potentially raise its ugly head again, and even be seen as a path for the Democrats within the farm community.
On the campaign trail, Biden said he favours America’s membership in the Trans-Pacific Partnership agreement that was developed while he was vice-president. He said he plans to move toward more international trade deals, though that will require trade promotion authority from Congress, and it expires in July 2021.
The trade promotion authority renewal is complex, often taking years to achieve and isn’t likely going to be a congressional priority for the new government.
It is more likely that enforcing existing trade deals will be the focus of the Americans, at least for the early Biden years. The United States-Mexico-Canada Agreement will get special attention with Wisconsin, Minnesota, Pennsylvania and Michigan supporting the Democrats again and with New York’s continued favour. As a result, Canadian dairy is more than likely to get attention from the United States Trade Representative’s office and supply management could once again be in its gun sights.
Mexico’s new president was elected on a platform that includes restrictions on farm chemicals such as glyphosate and potentially biotech-developed crops. As one of America’s biggest export markets, that will take up trade negotiation time and energy.
Biden has said he believes in working with other nations when dealing with China. That might help Canada deal with China’s use of non-tariff trade barriers. With no Democratic majority in the U.S. Senate, dramatic changes in trade policy are unlikely. That also applies to the “green new deal” that would put greater emphasis on carbon programs for agriculture.
If the U.S. rejoins the Paris Accord, it could employ greenhouse gas reduction programs with financial incentives for agriculture and trade penalties for countries without a carbon tax. Canada is OK on that score, loath though farmers are to embrace it.
The bottom line is that there will be good days and bad days for Canadian farmers over the next four years.
Many are breathing a sigh of relief, but many predictable troubles can be expected to continue.
Karen Briere, Bruce Dyck, Barb Glen and Mike Raine collaborate in the writing of Western Producer editorials.