Guelph, ON – Reliable, open trade is a pretext for prosperity in Canadian agri-food. But threats are gathering around us- we need different approaches.
The environment for global agri-food trade policy has shifted dramatically. The trade policies of the largest economies are increasingly transactional in nature, and essentially political. These are emboldened by the lack of an effective trade dispute resolution mechanism. Canada is a small player geopolitically, and the current situation leaves Canada exposed to multiple, deep concerns.
The policy note released today fragments the situation into the situation that confronts Canada in terms of the agri-food trade interests of the US, of China, and of other countries. The US has a heightened sensitivity to perceived fairness and lack of compliance from its trading partners. The sensitivity with China on agri-food trade is the dichotomy between urgent food security concerns and sudden trade restrictions thrust upon agri-food exporters.
“Canada needs a trade policy approach that discriminates between the risks posed by agri-food trade with China versus those posed by the US and, in so-doing, avoids having trade policy dominated solely by the US and China, and tension between the two”, said Douglas Hedley, Agri-Food Economic Systems Associate and co-author of the policy note. “With a weakened rules-based system, Canada needs to act more boldly on a plurilateral basis with like-minded countries, such as through the Ottawa Group, to improve its trade positioning in agri-food”.
The policy note discusses key differences between risks faced by Canada in agri-food trade with the China and the US, and provides ideas for shifts in trade policy that address each.
“Canada is vulnerable to sudden stoppages in trade by China predicated on technical issues. Focusing on exporting more processed foods rather than raw farm commodities can be part of an avoidance strategy. We also need to watch for imposed trade stoppages that leverage acquisitions of Canadian agri-food companies”, says report co-author Al Mussell, Agri-Food Economic Systems Research Lead. “Threats from the US are very different- established Canada-US supply chain alliances can be leveraged to avoid specific trade disputes, and influence the US back toward multilateralism”.
Source : Agri-Food Economic Systems