Wednesday, January 25, 2017

Agriculture in tough on trade

Canada’s agriculture industry faces tough sledding on trade, according to a new report from Douglas Hedley, once Canada’s chief agriculture negotiator, and Al Mussell, a senior agricultural economist.

Both now head Agri-Food Economic Systems Associate which has issued its report on events since U.S. President Donald Trump pulled the U.S. out of the Trans-Pacific Partnership and served notice that he wants to renegotiate the North American Free Trade Agreement with Canada and Mexico.

Hedley says “the sheer number of prospective trade complaints and defensive actions coming from the U.S. could swamp our capacity to effectively analyze and mount a successful defense; this may be a strategy of the new U.S. administration”. 

Mussell says, “a retrenchment of the U,S. from the Trans-Pacific Partnership, potential renegotiation of NAFTA, a prospective U.S. border tax, and U.S. trade complaints raised against Canada will drive Canada to consider alternative markets. 

“This puts more pressure on CETA (the free trade deal with Europe) and prospective new trade agreements with Japan, China, and perhaps others to provide markets for our agri-food products. 

“It will also require alignment between domestic agricultural policy and this new trade environment”.

Hedley says “at the same time, a WTO (World Trade Organization) ministerial meeting is scheduled for later this year, in which domestic support for agriculture is likely to be a key element. 

“Canada will be pressed to advance its agenda for reduced agricultural support globally and to deal with its own sensitivities.”

Supply management accounts for the lion’s share of “agricultural support” so is at risk in these negotiations.

“This will further draw upon our trade policy capacity,” says Hedley.