What do you anticipate is coming in 2019? Throughout January, we’ll feature five blog posts examining the top economic trends likely to affect Canadian agri-food this year.
Last January, we made The World our number one trend to watch. Its potential to influence Canadian agri-food hasn’t retreated, so it’s a repeat as the number one trend in 2019.
Current trade pacts, global tensions and developing alliances
Among global traders, distance adds cost and, until recently, the unknown – which explains why they first established ties with their closest neighbours. Cross-border trade benefits provide the means and incentive to share infrastructure, resolve problems and avoid dissolution. North American trade is an example: despite the flinging of weighty epitaphs during 12 months of negotiations, the new deal (CUSMA, or the Canada-United States-Mexico Agreement) bears a remarkable resemblance to the old for Canadian agri-food sectors, except for our supply-managed sectors.
But technology has shrunk the world. The proliferation of ongoing negotiations among distant partners (e.g., Regional Comprehensive Economic Partnership (RCEP), U.S.-Europe, etc.) and recent signings of large-bloc trade agreements are evidence. CPTPP brings together 11 countries bordering an ocean of 161 million square kilometres. It will open trade in 2019 for Canadian beef, pork, canola, wheat and other goods in the high-value Japanese market and fast-growing Malaysia and Vietnam with volumes and values once thought impossible. Canadian relationships with the Association of Southeast Asian Nations will only extend that, most notably with Thailand and Indonesia. The potential of the Canada-European Union agreement (CETA) may be fulfilled in 2019, with the expanded reach of Canadian goods to a European market of 742.9 million consumers who, in 2017, imported more than US$107 billion[1] worth of food.
All these relationships are made possible not by proximity, but by improvements in global technologies, logistics and infrastructure. They’ve facilitated the new alliances while they make room to displace and/or replace close alliances. China’s quick substitution of Brazilian soybeans for U.S. product in 2018, their efforts to diversify rapeseed meal imports beyond Canada, and European trade realignments in the wake of Brexit are three examples of the ease and speed of disruptive trade practices now possible.
Source : fcc