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Democrats may be the cause of trade mischief

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The election of Barack Obama as U. S. President is now a reality and Canadians who favoured his candidacy are probably feeling somewhat smug. According to most surveys, Canadians tend to favour the Democratic party because they appear more liberal than their Republican opponents. They see Democratic party ideals as more Canadian-like. That’s part of an enduring myth, much of it perpetrated by our own NDP and Liberal parties who like to demonize the Canadian Conservative party by trying to link it to the right-wing Republican party.

Many of us will be looking forward to watching both NDP and Liberal supporters squirm as the reality of Democratic Party rule becomes clear over the next few years. This will be especially true when it comes to American trade policy. Even Canadian Obama supporters, which includes a good chunk of the mainstream Canadian media, admit that a Democrat president will be tempted to cause trade mischief, especially with Canada.

That temptation will be aided and abetted by a Democrat-controlled Congress, which will in all likelihood initiate its own protectionist measures. One only had to watch the slow but steady progress of the American Country of Origin Labelling (COOL) legislation to see how Congress is able to institute protectionist measures that were opposed by the President and a good chunk of the U. S. livestock and packing industry.

Some political observers note that the North American Free Trade Agreement is not really in jeopardy because any opposition to it by President Obama was just political rhetoric. No, the agreement may not be torn up so to speak, but to paraphrase our own federal minister of agriculture, this issue can also be badly hurt by a thousand small cuts.

Alberta livestock and grain producers are long time veterans of U. S. trade harassment and through their organizations have spent many millions of their dollars fighting just to stand still on trade issues. The Canadian Wheat Board, the Canada Pork Council, the Canadian Cattlemen’s Association and others have fought countless trade battles and won. And that was when there was a so-called trade-friendly Republican administration in power.

The reality is that with U. S. protectionists we win a few battles, but we never win the war. They just lie low to fight on another day, with the election of President Obama.

He may well initiate some review of NAFTA to at least appear that he will carry out his campaign promises. That would be the usual political delaying tactic. But the real damage a new Democrat president can do is when he replaces the Republican appointees within the U. S. bureaucracy, including the Agriculture and Commerce departments. Such wholesale replacement at the director level creates a new atmosphere in departments connected to trade. Lifer bureaucrats understand what they need to do if they want to stay and advance in that new atmosphere. Never underestimate the power of bureaucrats – after all it was duplicitous American officials that closed the border to Canadian ruminant imports because of BSE without a shred of scientific proof. Rest assured they would do so again if the opportunity arose.

What is even worse with this changeover is that protectionist, environmental, animal rights and consumer lobby groups will all be reinvigorated with the potential that their causes will now be more favourably received by a new more politically correct and accommodating Democratic administration. You can rest assured that R-CALF and the North Dakota Wheat Commission will be charging up their trade action machinery for new attacks against Canadian exports.

Canadian ag Minister Ritz has promised to launch a WTO action against the new COOL legislation. I applaud him for doing so, but I suggest that he start it right away because with the protectionist attitude of the incoming Democratic administration it will be stonewalled until long after President Obama leaves office, in perhaps eight years.

For Canadian and U. S. trade lawyers and lobbyists I expect the next few years will prove to be busy and profitable. For Canadian government trade officials I expect the next few years will be filled with their usual dithering and meekness. For U. S. protectionist and lobby groups the next few years will be exciting and satisfying. For Canadian ag producers and exporters I expect the next few years will be filled with exasperation and aggravation.

I guess in the end it just proves that old US trade policy is still working, that being “we export, you import.”

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