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Even as tariffs fall, new trade barriers arise

Protectionists don’t give up when their government signs a free trade deal

Donald Trump might not get his wall — but other invisible walls are going up around the world.

“We’re in an era of protectionism, and in an era of protectionism, we have governments and regulators that are looking for any excuse to block trade,” said Cam Dahl, president of Cereals Canada.

“So we can’t give them those excuses.”

That’s hard to do when the excuses vary from country to country, said Dahl, part of a trio of market access experts who spoke at FarmTech in late January.

Biotech bans, country-of-origin labelling, maximum residue limits, low-level presence of weed seeds or diseases are all issues that are increasingly slowing or blocking Canadian crop exports to long-standing trading partners.

But protectionism isn’t a new phenomenon in agriculture or in the global marketplace, attendees heard. What’s new is that having agreed to tear down tariff walls, countries are putting up new barriers.

“Countries that would have formerly used tariffs to behave in protectionist ways are blowing off the dust of their rule books to see what clause can be used and abused in order to shut things out,” said Gord Kurbis, vice-president of trade policy for the Canada Grains Council.

“Mostly we’ve seen that employed with sanitary and phytosanitary issues — disease, weed seeds, even soil in some cases.”

‘Activism, not science’

But pesticides could become the protectionist tactic of choice, the trade experts on the panel said.

“Pesticides are increasingly on consumer and governments’ radar screens,” said Kurbis. “Could pesticides become the next non-tariff trade barrier?”

Canadian farmers are seeing some of that already, as activists campaign to ban glyphosate and biotechnology both domestically and abroad.

“Farmers are at risk of losing some of the key tools of modern agriculture, and that’s being driven by activism, not science,” said Dahl. “So we need to promote and push strong science-based regulations.”

But there’s a challenge in that: Each country has a different idea of what an effective regulatory framework looks like — and there isn’t enough work being done to harmonize those regulations.

“In an innovative industry like ours, we need to find ways to regulate better internationally,” said Jim Everson, president of the Canola Council of Canada.

However, that’s not easily done. Regulations are getting ever more complex, which is increasingly a challenge for many small and medium-size countries.

“A lot of these import countries just don’t have the capacity to really regulate the way the regulations were meant to be,” said Everson, adding both the Canadian Food Inspection Agency and the Pest Management Regulatory Agency are examples of that in Canada.

Traces can mean trouble

The situation gets really messy when it comes to maximum residue limits.

Testing methods have achieved levels of precision that were once unimaginable — parts per billion is now common. And yet regulations on maximum residue limits are all over the place.

“Some countries we export products to don’t have maximum residue limits or import tolerance levels at all, or they’re misaligned with ours,” said Everson.

And when that happens, their default is typically zero — even though there are international standards in the Codex Alimentarius.

“If there’s a Codex, why do there have to be any other international standards? Why can’t all countries work with the Codex standard?” asked Everson.

“I think we need to go in that direction in order to efficiently deal with these regulatory issues.”

Free trade agreements may be a way to achieve that.

Both of Canada’s newest trade deals — with the European Union and Trans-Pacific nations — have dispute resolution methods for both sanitary and phytosanitary measures, and biotechnology issues have also been addressed. The next step could be to introduce harmonized international standards.

“Free trade agreements do an excellent job of getting rid of tariffs,” said Kurbis. “But I think the opportunity for the next decade is to find a way to make governments comfortable agreeing to something they’ve never agreed to before — phasing in trade-enabling solutions like low-level presence or referring to international standards for maximum residue limits over time and in a way that’s agreeable to their constituents.”

Some work on that has already begun, he added, but the tricky part of “rules-based trade” is coming up with what those rules should be.

“The perfect rule book is one that is technically, commercially, and politically workable,” said Kurbis. “That’s what we need.”

Back on the farm

But in the meantime, every Canadian farmer growing an export crop needs to know the rules — and never break them — even if that means forgoing inputs approved in Canada but not in other countries.

“Don’t use products that will potentially disrupt the market,” said Dahl. “The default levels in many of these cases are zero. What does that mean? One part per billion is one second in 32 years. One part per trillion is one second in 32,000 years. But that’s still not zero.

“So if we’re detecting at some of those levels, it can block trade.”

Before using something for the first time, talk to both your farm input supplier and elevator agent, he urged.

“Have those conversations before you use a product,” said Dahl. “It’s better to talk to your grain buyer before you use a product and have them tell you, ‘If you put this on, I’m not going to buy your grain,’ than to do it and have them reject your grain after.”

And always follow the label.

“I know my dad used to be proud of some of the tank mixes he invented — don’t do that. Follow the label,” said Dahl.

“That’s how we ensure we’re not delivering residues into international markets. The trade-off could be long-term market loss.”

In the past year, there were nearly 3,000 maximum residue limit violations around the world, mostly in specialty and horticulture crops.

“We have good compliance now, and we want to keep it that way even as the world puts us under a microscope,” said Kurbis.

“If we all follow (the labels), the risk of this type of situation transferring over into the grain sector becomes nice and low and manageable.”

The alternative is closed borders and reduced trade for our crops, he added.

“What happens on your farm matters in the international marketplace,” said Dahl. “We need to make sure we’re following these rules. Because if we’re not, then we’re going to be giving those countries that want to block our trade the hooks to hang those protectionist regulations on.”

For more information on how to ensure your crops are ready for export, visit keepingitclean.ca.

About the author

Reporter

Jennifer Blair is a Red Deer-based reporter with a post-secondary education in professional writing and nearly 10 years of experience in corporate communications, policy development, and journalism. She's spent half of her career telling stories about an industry she loves for an audience she admires--the farmers who work every day to build a better agriculture industry in Alberta.

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