“Canadian producer groups will be well advised to begin stockpiling their financial ammunition, battles in the endless trade war are looming just over the horizon.”
American trade policy has been much discussed by the mainstream media in Canada over the past month. Dire predictions of protectionism were ruminated over by alleged experts of all kinds. Former U. S. ambassadors were hunted down and revived by the TV networks to voice their words of wisdom. Opposition leaders thundered self-righteous indignation blaming the government for not bringing the Americans immediately to heel.
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In the end all that fuss mattered very little. The American media was barely aware of the concern and Congress only slightly modified the final wording of its bailout funding. Canadian government ministers were quick to take credit for this supposed monumental change. The reality is that the reference to “Buy American,” no matter how softly it is interpreted, sends a not-too-subtle message to anyone who wants a piece of the multi-billion dollar pie – if you want a piece of the action, your contract tender better be all-American. Bureaucrats will see to that.
What should resonate is how easily and quickly this protectionist reference was included in the original legislation. It shows how low this sentiment lies under the surface, particularly with a Democrat-controlled congress. This will only embolden those nefarious U. S. forces that want to strike at Canadian agricultural exports.
What all of this also demonstrated was that in the end, no matter what trade treaties the U. S. agrees to, Congress and the bureaucracy will decide what the actual policy will be, even retroactively. The Canadian grain and livestock industries are all too aware of who carries out that policy. Mindless border restrictions on beef and endless trade actions against Canadian wheat come to mind when considering the handiwork of U. S. trade officials.
Canadian producer groups will be well advised to begin stockpiling their financial ammunition. Battles in the endless trade war are looming just over the horizon. Past experience has shown that tough times mean that people will be looking for someone else to blame – it’s human nature.
Defending ourselves against the inevitable challenges will not come cheap. Unlike the U. S. government, the Canadian government does not provide a lot of help to a sector under an American trade or border assault. The Canadian Wheat Board spent around $17 million fighting off the last challenge to Canadian wheat exports. The Canadian Cattlemen’s Association spent $5 million to fend off the last countervail action. Pork, potatoes and others have also spent millions over the years. Most national producer organizations spend hundreds of thousands of dollars on an ongoing basis to maintain technical and lobbying machinery to try to derail protectionist activity, real or imagined, in the U. S.
That should cause one to ponder that producers are fortunate that they have the financial and technical abilities to fight trade battles. It’s one of those services that national groups provide that is either not understood or rarely appreciated by producers. For example, if the Canadian Wheat Board were dissolved, what other group could come up with the millions it would cost to fight another trade challenge? There are a few national grain producer groups, but they can barely afford to run an office and an annual meeting – not much hope there.
In Alberta there is a campaign to redirect the cattle checkoff away from the Alberta Beef Producers. It was that organization that contributed the lion’s share of the millions needed to fight the most recent cattle countervail. Where will the money come from for the next trade challenge if ABP checkoffs are redirected to a half dozen diverse cattle and producer groups? You can expect any such funds to be held up to ransom for political whims and agendas.
Canadian agricultural exports are living in precarious times and one shouldn’t expect the Canadian government to react in the same way as it has to recent U. S. protectionist legislation. That involved Canadian steel exports, a commodity dear to the hearts of Quebec and Ontario voters and politicians. Need I say more?
