Agricultural trade in the age of protectionism

Posted on August 28, 2018 by Sunny South News

The world has entered a new age of nationalism, resulting in growing trade protectionism and increasing barriers for Canadian farmers and exporters who depend on international markets.

The idea that trade is about winning or losing is dangerous and misleading. This idea ignores the world’s growth over the last 75 years and the disastrous outcomes of “me first” economic policies that preceded trade liberalization. We cannot forget the prophetic words of former U.S. Secretary of State (and Nobel Laureate) Cordell Hull who noted “unhampered trade dovetails with peace; high tariffs, trade barriers, and unfair competition with war”. Secretary Hull would be disappointed with the current state of global affairs, particularly the retreat of leading nations from cooperative and rules-based systems.

Canadian farmers see examples of growing protectionism every day, with tweets from the President of the United States, barriers to Canadian durum entering Italy, Saudi Arabia banning Canadian wheat and barley, and countries using phytosanitary rules to block trade. Recent court and regulatory decisions in the European Union (EU) have the potential to severely limit accessibility to this market. The list of market access barriers seems to grow on a weekly basis. What can we do about it?

We need our Government to rigorously enforce current trade agreements. A trade agreement is not worth much without enforcement. Since the Comprehensive Economic and Trade Agreement (CETA) with the European Union (EU) came into force, one of Canada’s largest exports to the EU, durum wheat, has virtually disappeared. Canadian farmers need our Government to assertively challenge the protectionist measures Italy is using to keep our durum out. A strong Canadian response is necessary to recover the Italian market and to prevent other protectionist countries from adopting Italy’s methods.

We also need every part of government to consider the trade implications of policies and public statements. All agencies and departments need to have an understanding of the importance of keeping markets open for Canadian exporters. This “trade lens” does not exist today. Some of our key regulatory agencies have explicitly stated or shown that trade considerations are not part of their mandate. This must change.

We need our regulatory agencies to carry out necessary consultations with the Canadian value chain and our trading partners before public announcements are made. We need agencies and departments to consider if diplomatically making statements in private, rather than public, will keep markets open. We need regulators to acknowledge that some decisions will make Canada less competitive despite the fact that they might be popular on the internet.

This does not mean that the Government of Canada should back away from the fundamental principles of our country. Nor does this mean that regulatory agencies should favour commerce over rigorous science-based defense of Canadian’s health and of our environment. It does mean that decisions should be made with a clear understanding of the implications for Canadian competitiveness and trade and that all possible steps have been taken to mitigate negative impacts.

It is not all up to governments. Farmers and industry have a critical role to play in keeping our markets open. Protectionists are looking for any excuse to block trade. Producers need to ensure that the actions they take on their farm do not provide a pretext for trade barriers.

Improper use of pesticides is one example of a practice that can jeopardize trade. All of our grain shipments are under increased scrutiny for residues. These can occur when farmers don’t follow the label directions. For example, if glyphosate is applied to green cereal crops the seeds will carry residues. “Green” means anything above 30 percent moisture, when the seeds are still maturing. Improper fall application of glyphosate could provide the excuse to block Canadian exports.

Farmers also need to be aware when new products don’t have approval in key export markets. Often there is are zero-tolerance limits for unapproved residues in Canadian shipments, even though products have full approval in Canada. When this occurs farmers need to consciously make the decision to protect our export markets and avoid using the product.

The other parts of the value chain, like crop input suppliers and exporters, have a role to play as well. Suppliers should be aware of potential market access issues for new products. They should be reminding customers of the need to rigorously follow the label when applying products.

This is why commodity associations have come together to launch the Keeping it Clean campaign. Farmers and suppliers can visit http://www.keepingitclean.ca to get up-to-date data on new products as well as information on products of particular concern. The industry really is a partnership in the effort to keep markets open.

CAM DAHL,
President of Cereals Canada