Trade, Trump, and Protectionism

A guest editorial by Cam Dahl, president of Cereals Canada

There have been a lot of questions about trade since the U.S. election. The new President promised to take the U.S. out of the Trans-Pacific Partnership and he did just that with his first Executive Order. President Trump has also promised to renegotiate NAFTA, causing exporters in Canada concern about what that is going to mean.

But it is not time to push the panic button. Canada and the U.S. are each other’s biggest customer. One commentator recently quipped “the difference between Canada and everyone else in the world is that we buy American.” The same holds true in the U.S. — they buy Canadian. The economic health of both nations depends on this strong trading relationship, something governments on both sides of the border understand.

While “don’t panic” is the right response following the U.S. election, we cannot afford to be complacent in the face of a rising anti-trade movement. Canadian agriculture needs to dig deeper into the reasons behind the protectionist sentiment coming out of the new Administration in Washington. We also need to recognize that the rise of protectionism is not a U.S. occurrence but extends around the world. This is a big issue for an industry like ours that depends on free flowing trade to be profitable.

Cam Dahl, president of Cereals Canada, in an interview, with RealAg at Farmtech, 2016.

Examples of new nationalism and its twin, protectionism, are all around us. This drove a majority of citizens of the United Kingdom to vote to leave the European Union. Italy is considering measures to restrict imports of durum wheat and favour their own production through country of origin labelling measures. Grain safety regulations that are not science based are cropping (yes the pun is intended) up more and more.

This rise of protectionism is one of, if not the biggest bucket of issues that is facing Canadian grains, oilseed and special crops industries. How do we, as an industry, effectively respond?

The first and most important response is a common message coming from Canada. This includes the messages that are being delivered by Government Ministers, our embassies and High-Commissions abroad, exporters and farmers.

We need to be delivering a single message to foreign governments and our customers around the world, whether we are promoting the sustainability of modern Canadian agriculture (e.g., positive environmental impact of modern crop inputs like glyphosate) or opposing protectionist policies like COOL (Country Of Origin Labelling). Whatever differences might exist between members of the value chain need to be set aside to ensure that the single message is developed and delivered. Value chain organizations provide the forum for the common industry voice to be established. This is one of our most important tasks in helping to ensure a profitable sector.

“Practices what we preach” is another important tool that will help keep borders open. Canadian Ministers, government agencies and industry push hard for rules of trade that are based on sound scientific principles. We need to ensure that we are following those principles here at home.

The labels that appear on pesticides registered in Canada all outline how the product must be used, when it should be applied, what crops it can be applied to, the interval between application and harvest, etc. These labels are not random advice but are based on science. The need to be followed religiously. There are no conditions where it is acceptable to not follow the label.

Following pesticide use labels will help ensure that shipments from Canada will not contain residues that are above maximum limits. Our reputation for safe and reliable exports are key parts of the Canadian brand and are a critical component of keeping markets open, despite protectionist pressures.

We also have to pay attention to times when using some new products could cause market harm. Pesticides are not approved at the same time in every country. There are times when a new product is approved in Canada but not approved in export markets. If our customers have not approved a chemical they may adopt a zero tolerance for any residues. We can’t ignore these market realities and expect ongoing ready acceptance of our commodities.

The cereals value chain is systematically assessing potential market risks and communicating back to farmers through the Keep it Clean – Cereals program. Before you use a product for the first time visit the Keep it Clean – Cereals website and talk to your grain buyer to make certain that there are no market concerns with its use. This conversation may prevent difficulties when it comes time to deliver.

Trade barriers are increasing globally. This is by no means a movement limited to the U.S. Growth in protectionism is a threat to Canadian exports. Industry (including farmers) and governments must work together to combat these trade barriers with a single common Canadian approach and message.

 
 

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