Canada's good news story on sustainability on a crash-course with increasing protectionism

by

Opinion

By Tyler McCann, managing director of the Canadian Agri-Food Policy Institute

Many in Canadian agriculture and food are proud of the sector’s position as a major exporter. Many are also proud of Canada’s position as a sustainable food producer. But many are worried about the relationship between trade and sustainability. While the landscape is shifting, it seems increasingly likely that an intersection is inevitable, if not necessary. Canada should be considering how to deliver an intersection that improves trade and sustainability outcomes and avoids a collision between the two.

Canada certainly benefits from its position as a significant agri-food exporter. In 2023, agri-food exports were within striking distance of $100 billion a year. Those exports boost farm incomes, employment and more at home, and connect Canada to the world.

That positive impact is made possible by the rules-based trading system that has delivered relatively effective and efficient market access. Unfortunately, the effectiveness and efficiency of the rules-based trading system seem to be slipping away. The multilateral system is increasingly challenged. Notifications of trade barriers are increasing; dispute settlement is inoperable; and the February 2024 WTO Ministerial is not expected to make meaningful progress. Bilaterally, Canada’s negotiations with India and the UK have broken down. Canada is in the TPP but out of the U.S.-led Indo-Pacific Economic Framework for Prosperity. Negotiations with the ASEAN appear stalled.

The horizon of the Canada-U.S. relationship is clouded by the likely CUSMA renegotiation, with the potential for significant disruption and a US Presidential candidate running on a promise to impose a 10% tariff on all imports.

There are legitimate reasons to be concerned about the state of trade and the consequences for the state of Canadian agriculture and food. And this is all without considering the pressures to link sustainability and trade and the possible impact on Canadian agriculture and food.

The European Union is leading efforts with its Carbon Border Adjustment Mechanism, deforestation regulations, talk of mirror policies and more. While the EU is out front, it is not alone, and efforts to link sustainability and trade are not going away. However, the starting point for understanding the potential impact should be understanding our sustainability and how that compares to other producers.

Shaun Haney and Tyler McCann spoke last week on the topic of sustainability and trade and the recent report, link below. Hear the audio by tapping the player.  The op-ed continues below the player

The Global Institute for Food Security at the University of Saskatchewan released a carbon lifecycle analysis that confirms Canada has a carbon intensity advantage for crops compared to other competitors.

CAPI’s recent livestock whitepaper highlighted the emissions advantages that Canadian beef, dairy,  chicken and pork have over other producers. The recently released National Beef Sustainability Assessment concluded the sector is on track to meet its 33% emission intensity reduction target. The progress these sectors are making in reducing their footprint helps increase Canada’s advantage.

The OECD’s agri-environmental indicators and a report by the Australian government both confirm Canada performed well on many environmental indicators. Therefore, the starting point should be that Canada is a significant exporter that delivers better environmental outcomes than most other major producers. Sustainable trade should give Canada an advantage.

However, in an era of increasing protectionism, there is a genuine concern that the intersection of trade and sustainability will be a collision.

A recently released report from CAPI and its partners in the Global Forum for Farm Policy and Innovation offers insights on how it might be done right.

The report, Advancing the Role of Trade and Agricultural Sustainability, characterizes four themes from a workshop GFFPI hosted late in 2023. First, food systems and trade can be enhanced through outcomes-based approaches to sustainability. Second, there is a need to intensify global cooperation in support of coherent policies and a global framework for sustainable agriculture. Third, there is a need to optimize trade to make agriculture sustainable and profitable. Finally, data and technology must be harnessed to transform how we grow and trade food.

The report acknowledges that a lot more work needs to be done. Canada is well-positioned to lead that work. Canada could lead the development of a framework that facilitates food moving from where it is produced sustainability to where it is needed around the world.

While Canada could do that, the big question is whether Canada can or would do it. Doing so would require substantive, meaningful strategic engagement between the government and leaders in the sector. It would also require the government to invest time, energy, and resources in international agriculture leadership. It is less than clear how much capacity Canada has to do either.

At the end of the day, the likely outcome is that others will lead the intersection of trade and sustainability, and Canada will engage where it can. That may or may not be a bad outcome, but it will likely not lead to the best outcome for Canadian agriculture and food. Avoiding a trade and sustainability collision will require leadership, but it is not clear if anyone in Canada is prepared to show it.

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