Canada looks to Europe for a winning trade recipe

In an increasingly protectionist world, finding trade partners for agricultural products is difficult, although the benefit can be huge

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ceta agricultural trade protectionismHALIFAX, N.S. Oct. 24, 2016/ Troy Media/ – Canada’s new Liberal government is learning the hard way that in multilateral trade agreements, agriculture and food always create a recipe for contentious debates.

Farmers in Belgium have stalled the European Union’s ratification of the Comprehensive Economic and Trade Agreement (CETA) by voting against it. Many other factions within France, Poland, Spain, Bulgaria and Austria have reservations, but only the small French-speaking southern Belgian region of Wallonia rejected the agreement before its final approval.

Despite the setback, the European Council continues to work toward signing CETA.

But with 28 member states and diverging agricultural interests, finding common ground in the EU is challenging. Anyone who has travelled in Europe can appreciate how different regions have varying relationships with food. European food economies are largely region-based, with a wide mix of locally produced products.

Opening Europe to foreign food products only creates more unease, since North America and Europe have very different agricultural economies.

So the deal Canada and the EU signed a few years ago (but is just now being ratified) is an enigma. Many Europeans argue that genetically modified crops and corporate farming define Canadian food systems. For them, the deal is toxic, surrendering to the dictatorship of corporations. They see CETA as a real threat to local agriculture, which is intertwined with centuries-old gastronomic cultures.

In truth, Canada is just a footnote compared to the massive economic clout of the United States. So CETA is more of an inconvenience for farming in Europe than the real menace a deal with the U.S. would represent.

And ratifying CETA could be a way for the EU to demonstrate it can survive Great Britain’s exit from the union and move beyond constitutional hiccups.

For Canada’s agricultural industries, a ratification of CETA would be celebrated.

The deal would establish an animal protein and milk exchange between two continents. Canada could sell more pork and beef to Europe and the EU could ship more processed milk. This would be good for our cattle and hog sectors, which are in dire need of new markets.

On the other hand, our dairy sector would receive a well-needed shakeup, since more foreign cheese would enter our market exempt from tariffs. Canadian dairy processors would need to become more competitive, to the delight of Canadian consumers.

Our dairy industry has certainly increased its competitiveness in recent years, with more mergers and acquisitions. And we should expect continued market movement beyond our prehistoric supply management approach, which treats the consumer as an afterthought.

More broadly, CETA would also allow Canada to take a significant step toward becoming a recognized player in the global marketplace.

And we should applaud the former Conservative government for its foresight in initiating the CETA deal. In doing so, it beat the U.S. to the punch. Canada is pushing to the finish line on this deal while America has barely advanced in its quest to sign a similar pact with Europe. (It will be interesting to see how Americans proceed with a new tenant moving into the White House in just a few months.)

A completed CETA would give Canada a significant trading advantage. We would become the only country in the world involved with two significant continental trade deals. With CETA and the North American Free Trade Agreement (NAFTA), Canada becomes the portal between two mega markets, the U.S. and Europe.

So if CETA fails, it would be a gigantic missed opportunity.

But we shouldn’t get our hopes up. The world has become much more protectionist. A CETA deal is unlikely to survive a long, politically-charged ratification process. That CETA is even on life support is a miracle and it’s difficult to see how the Trans-Pacific Partnership (TPP) of Pacific Rim countries can ever be completed now.

We can hold out hope that CETA still happens because of Canada’s relatively insignificant reputation in the trading world.

But if it fails, there is a decent consolation prize from an agricultural trade perspective on the horizon: the United Kingdom is looking for new trade partners now that it is preparing its withdrawal from the EU.

Canada just may get the agricultural trade recipe right, after all.

Troy Media columnist Sylvain Charlebois is dean of the Faculty of Management and professor in the Faculty of Agriculture at Dalhousie University. Sylvain is included in Troy Media’s Unlimited Access subscription plan.

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