There have been a lot of questions about trade since the U.S. election. The President promised to take the U.S. out of the Trans-Pacific Partnership and he did that with his first Executive Order. President Trump has promised to renegotiate NAFTA, causing concern with Canadian exporters.
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.
While “don’t panic” is the right response following the U.S. election, we cannot afford to be complacent. Canadian agriculture needs to dig deeper into the reasons behind the apparent protectionist views coming out of the new Administration. An anti-trade sentiment helped propel President Trump to the White House and we cannot afford to ignore these very real populist attitudes. 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.
Examples of new nationalism and its twin, protectionism, are all around us. This drove a majority in the United Kingdom to vote to leave the European Union. Italy is considering country of origin labelling (COOL) measures to restrict imports of durum wheat. Grain safety regulations that are not science based are cropping up more and more.
This rise of protectionism represents one of the biggest bucket of issues that is facing all Canadian crop sectors. 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, 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. 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 to keep borders open. The Canadian government and industry push for rules of trade that are based on sound science. We need to ensure that we are following those principles here at home.
All pesticides registered in Canada have labels that define how the product must be used, when it should be applied, what crops it can be applied to, the pre-harvest interval, etc. The labels are not random but are science-based. The need to be followed religiously. There are no conditions where it is acceptable to ignore the label.
Following pesticide use labels will help ensure that Canada shipments are well within Maximum Residue 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 use of 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.