In a sign of the escalating squeeze on food supplies and rising prices, a government source told Reuters that India could restrict sugar exports for the first time in six years to prevent a surge in domestic prices.

Meanwhile Indonesia, the world’s biggest palm oil exporter, will remove a subsidy on bulk cooking oil and replace it with a price cap on the raw materials for local refiners.

“It is a major issue, and frankly I think the problem is even bigger ahead of us than it is behind us,” Gita Gopinath, first deputy managing director of the International Monetary Fund, told Reuters of rising food security concerns.

Protectionism is looming large at Davos, prompting calls for urgent negotiations to avoid a full-blown trade war.

“It’s very important for the leaders of the world to sit at the table with calm and talk about how we will manage trade and food and investment,” Jay Collins, vice-chairman of banking, capital markets and advisory at Citigroup told the Reuters Global Markets Forum in Davos.

“There’s a lot of conversations actually with the G7 happening here in the past 48 hours,” Collins said.

Hoarding

For residents in countries in sub-Saharan Africa, for instance, 40 per cent of their consumption is spent on food, Gopinath said. As well as a “huge hit to the cost of living,” price rises have given rise to hoarding by governments.

“We have about 20 plus countries that have put restrictions on exports of food and the fertilizers, and that can only compound the problem and make things worse,” she said on Monday.

Russia’s invasion of Ukraine, which Moscow describes as a “special military operation,” has led to a sudden crunch in a crisis that was already in the offing.

“We were facing an extraordinary food crisis before Ukraine, food costs, commodity prices, shipping costs were already doubling, tripling, quadrupling,” David Beasley, executive director for the United Nations’ World Food Programme, said.

The number of people “marching to starvation” has risen from 80 million to 276 million over the last four to five years, Beasley told Reuters in an interview in Davos.

“To keep the ports closed as the harvest season is now coming in Ukraine in July and August, it means a declaration of war on global food supply,” he said.

Many companies at Davos have been in touch about how they can act to address the food crisis, Beasley added.

‘Not sustainable’

“Agriculture has to be part of the solution to climate change and has to tackle food security,” Erik Fyrwald, CEO of Syngenta Group, said during a panel discussion on Monday.

Fyrwald said Syngenta has demonstration farms that show how farming practices such as not tilling the soil and covering crops in the winter to prevent soil erosion were better for soil, food security and climate change.

Another potential solution to the food crisis is to tackle waste, Gilberto Tomazoni, CEO of JBS, the world’s largest meat processor, told a WEF panel on Tuesday.

“Humanity is faced with two big emergencies at the same time, we need to face climate change and we need to produce more to feed a growing population,” Tomazoni said.

“And the way we are producing today is not sustainable. This is our big, big challenge. Food waste, we need to take on this situation,” Tomazoni added.

— Reporting for Reuters by Jessica DiNapoli, Dan Burns and Divya Chowdhury.

The post Food crisis fuels fears of protectionism compounding shortages appeared first on Alberta Farmer Express.

A self-declared “doer” with a track record of taking on seemingly intractable problems, Okonjo-Iweala will have her work cut out for her at the trade body, even with Donald Trump, who had threatened to pull the United States out of the organization, no longer in the White House.

As director-general, a position that wields limited formal power, Okonjo-Iweala, 66, will need to broker international trade talks in the face of persistent U.S.-China conflict; respond to pressure to reform trade rules; and counter protectionism heightened by the COVID-19 pandemic.

“What it (the WTO) needs is someone who has the capability to drive reform, who knows trade and who does not want to see business as usual. And that is me,” she said on Monday.

Earlier she told Reuters in an interview that her top priority would be to ensure the trade body does more to address the COVID-19 pandemic, calling the disparities in vaccine rates between rich and poor countries “unconscionable” and urging members to lift export restrictions on medical items.

She also expressed confidence that her priorities were aligned with Washington’s.

“I think our interests and priorities are aligned. They want to bring the WTO back to (its) purpose,” she told Reuters.

The U.S. delegate said that Washington was committed to working closely with her and would be a “constructive partner.” China’s delegate pledged “full support” for her.

EU trade commissioner Valdis Dombrovskis said he looked forward to working closely with her to drive “much-needed reform of the institution.”

A 25-year veteran of the World Bank, where she oversaw a US$81 billion portfolio, Okonjo-Iweala ran against seven other candidates by espousing a belief in trade’s ability to lift people out of poverty.

She studied development economics at Harvard after experiencing civil war in Nigeria as a teenager. She returned to the country in 2003 to serve as finance minister and backers point to her hard-nose negotiating skills that helped seal a deal to cancel billions of dollars of Nigerian debt with the Paris Club of creditor nations in 2005.

“She brings stature, she brings experience, a network and a temperament of trying to get things done, which is quite a welcome lot in my view,” former WTO chief Pascal Lamy told Reuters last week. “I think she’s a good choice.” Key to her success will be her ability to operate in the centre of a “U.S.-EU-China triangle,” he said.

The endorsement of the Biden administration cleared the last obstacle to her appointment and she is due to begin March 1.

Sweet but strong

Okonjo-Iweala, who goes by ‘Dr. Ngozi,’ becomes one of the few female heads of a major multilateral body. When she joins the WTO’s Geneva lakeside headquarters her portrait is set to be hung beside others of men, mostly white and from rich countries.

The Trump administration’s main criticism of her was that she lacked direct trade experience compared to her main South Korean rival and even supporters say she will have to quickly get up to speed on the technicalities of trade negotiations.

She has rejected this, saying that she has plenty of experience of trade, plus other expertise.

Asked about how she took the Trump rejection, she replied: “When things happen you take them in your stride and move on.”

Raised by academics, the mother-of-four earned a reputation for hard work and modesty amid the pomp of Nigeria’s governing class, acquaintances say.

“She is persistent and stubborn,” said Kingsley Moghalu, former deputy governor of Nigeria’s central bank who worked with her when she was the country’s first female finance minister.

Nigeria’s President Muhammadu Buhari welcomed her election, saying it brought “more joy and honour to the country.”

Her appointment also was welcomed by people in the streets of Nigeria’s capital Abuja where Ibe Joy, who works in marketing, said Okonjo-Iweala’s achievements were an inspiration to young women. “If she can do it, we all can do it,” said Joy.

Reforming the unreformable

The 26-year-old WTO that Okonjo-Iweala inherits after a six-month leadership gap is partially paralyzed, thanks to the Trump administration which blocked appointments to its top appeals body that acts as the global arbiter of trade disputes.

But even before Trump, negotiators had struggled to clinch deals that must be agreed by consensus, with the U.S. and other developed WTO members arguing that developing countries, notably China, cannot cling on to exceptions and that rules need to change to reflect China’s economic growth.

Okonjo-Iweala, who is a special envoy for the World Health Organization on COVID-19 and, until recently chair of the board of global vaccine alliance Gavi, said on Monday she wanted to build a framework on pandemic response “so that next time we don’t waste time trying to figure out how to respond.”

WHO director-general Tedros Adhanom Ghebreyesus called Okonjo-Iweala the “WTO’s perfect chief.”

The WTO currently faces deadlock over an issue of waiving intellectual property rights for COVID-19 drugs, with many wealthy countries opposed.

High on the to-do list will also be fisheries subsidies, the subject of the WTO’s main multilateral talks that missed a deadline to conclude by end-2020. She told journalists on Monday she thought a deal on this was “within reach.”

Asked about the challenges ahead, she joked that a book she wrote about fixing Nigeria’s broken institutions could well apply to today’s WTO: Reforming the Unreformable.

“I feel I can solve the problems. I’m a known reformer, not someone who talks about it,” she told Reuters in an earlier interview. “I’ve actually done it.”

— Reporting for Reuters by Emma Farge in Geneva, Alexis Akwagyiram in Lagos and Philip Blenkinsop in Brussels, Abraham Achirga in Abuja, Jan Strupczewski in Brussels and Tom Daly.

The post Nigeria’s Okonjo-Iweala makes history as new head of WTO appeared first on Alberta Farmer Express.

The U.S.-Mexico-Canada-Agreement (USMCA), referred to as the CUSMA in Canadian documents, came into force to replace the North American Free Trade Agreement. The reaction from much of the agricultural sector was more of relief than celebration. As Canadian Cattlemen’s Association president Bob Lowe described it, the new deal is “timely and welcome” because it brings “continued economic stability.”

In other words, the real gain for the export-oriented agricultural sectors was no loss.

The new deal contained some expensive concessions for certain sectors, namely dairy and poultry, but access to the coveted U.S. market was mostly preserved for other commodities such as beef, pork and wheat.

The U.S. and Mexico are typically Canadian farmers’ first- and fourth-largest export markets. The arrival of a scrappy White House administration that showed no reverence for the hard-fought gains in global rules-based trading over the past three decades had the entire sector on edge.

Farmers and processors are well aware that they make easy targets when foreign interests have a bone to pick with the Canadian government. Hitting agricultural commodities with tariffs or non-tariff barriers gets lots of media attention because producer groups are well organized and vocal. Economic impacts aside, governments are also sensitive to any actions that might jeopardize their country’s ability to produce food.

China showed its displeasure with Canada’s arrest of the Huawei executive by throwing two Canadian citizens in jail and blocking shipments of canola seed from two of Canada’s largest exporters.

It created a bizarre scenario in which Canadian canola producers were co-opted into pushing China’s cause by pressuring their government to do pretty much anything to restore access to an important customer.

Less widely known is that canola sales to China continued. Export documents show that significant volumes of the raw seed no longer allowed into China started flowing to the UAE, where it was being crushed and shipped to China as vegetable oil. Considering sales of all grains, China is by far Canada’s biggest customer so far this year.

In an equally bizarre scenario, U.S. President Donald Trump attacked Canadian domestic dairy policy. The complaint wasn’t that Canada was unfairly sending dairy into the U.S., it was that the U.S. wanted the ability to dump surplus U.S. dairy into Canada.

Agricultural sectors anxious to maintain their market access to the U.S. were quick to line up to support the U.S. posturing. Trump also got help from some Canadian commentators who pressured the government to make concessions on the premise that increased competition from the U.S. would result in lower grocery prices for dairy products.

Faced with the prospect of losing potential gains exceeding US$5 billion over an estimated US$600-million influx of U.S. dairy products onto the Canadian market, Canadian negotiators pragmatically opted to offer compensation to Canadian dairy farmers in the interests of keeping key elements of the former NAFTA intact.

In another twist, the July 1 implementation date is a month earlier than the Aug. 1 start of the dairy-marketing year. That early implementation is estimated to have cost Canadian dairy farmers an extra $100 million over and above the concessions on market access because it brings the new provisions into force ahead of expected timelines.

The federal government also conceded on regulations that were perceived as blocking U.S. farmers from selling grain to Canadian elevators. It’s unclear why they’d even want to because the U.S. system typically has better transportation and pricing options. Nevertheless, grading changes effective July 1 removed any barriers that existed, but in a way designed to protect the integrity of Canada’s unique quality parameters.

As Canada’s trade and political relationship with China continues to sour, Canadian farmers are hoping this new deal with the U.S. will lay some of the uncertainty over access to exports to rest.

But with a U.S. presidential election on the horizon, there are no guarantees that the shenanigans are over.

Laura Rance is vice-president of content for Glacier FarmMedia. She can be reached at lrance@farmmedia.com.

The post Opinion: The bar has been set lower in this new era of global trade appeared first on Alberta Farmer Express.

“Overall, I think one of the bright spots in a really dark economic situation in the province is our agriculture and agri-food sector,” Rob Roach said. “It’s still producing. It’s still providing an essential service. It hasn’t closed down in the way a lot of businesses have.”

And as Alberta works to rebuild its economy after “one of the worst (recessions) we’ve seen in recent memory,” agriculture could play an important role in those efforts.

“Unlike some other industries, the disruption in agriculture will be less severe,” said Roach. “The industry doesn’t have to restart. It doesn’t have to worry about whether there are still going to be buyers for our products. Agriculture will be spared some of those challenges.”

But there could be challenges, he added. Already, some countries are implementing protectionist policies that could limit or block trade.

“Anxiety is high and they may want to set inward-looking policies as a knee-jerk reaction,” said Roach. “The sector will have to work against that to some degree.”

However, the already-strong reputation of Canada’s agriculture industry may be enhanced.

“I think it’s a real chance for Alberta and the Canadian agricultural system to show the world that we are a high-quality reliable supplier of food to the world,” he said. “Alberta has been helping to feed the world for decades and decades, so this is a real opportunity for us to build on that post-pandemic.

“I think there’s a really bright future ahead.”

— Jennifer Blair reports for Alberta Farmer from Sylvan Lake.

The post Ag industry a potential ‘bright spot,’ post-pandemic appeared first on Alberta Farmer Express.

In its 2020-21 departmental plan, which sets priorities for the upcoming year, AAFC says it will “continue to assist the sector to take advantage of market opportunities and maintain or improve access to international markets, including through the negotiation and implementation of trade agreements, promoting Canadian agri-food products, and by resolving or mitigating market barriers.”

Some potential multilateral trade deals remain highlighted within the plan, which was developed before the pandemic crisis and made public in March.

The federal government is negotiating with the Mercosur block of countries, which includes Argentina, Brazil, Paraguay and Uruguay. Exploratory talks on a trade pact were concluded, and a first round of negotiations launched, in 2018.

Another trade deal in negotiation since 2017 involves the Pacific Alliance, made up of Colombia, Chile, Mexico and Peru, each of which are already have bilateral and/or multilateral free trade pacts in effect with Canada.

The AAFC document also mentions the Association of Southeast Asian Nations (ASEAN), which includes the Philippines, Thailand, Indonesia, Laos, Cambodia, Myanmar and four Trans-Pacific Partnership countries, Vietnam, Singapore, Malaysia and Brunei. Exploratory discussions toward an ASEAN trade pact were launched in 2017 and concluded last September.

The governing Liberal party has previously committed to increase and diversify agriculture and agri-food exports in order to reach its target of $75 billion in exports for the sector by 2025.

AAFC noted “increasing protectionism in other countries” that has led to the introduction of tariffs or non-tariff trade barriers impacting producers’ economic outlooks, but said in its planning documents it will be “advocating for a predictable and stable trade environment” to help to mitigate these risks.

Changes to how AAFC consults with players across the value chain will also come within the next year.

Value chain roundtables, which AAFC now uses as a key component of consultation, will move from being commodity-specific to more thematic-based.

“The department will establish and update sector-specific and thematic tables to address issues in the sector and will formalize opportunities for engagement through a modernized model,” the plan said.

The new roundtable model will also “include opportunities for engaging women, Indigenous peoples, and youth.”

As part of that work, over the next five years, AAFC plans to develop a strategy to offer more “gender-based analysis” in order to address gender gaps across the agri-food value chain.

Gender-based analysis is a theme throughout the document, as AAFC also commits to applying it to all trade agreements and “is exploring the use of targeted calls for program applications to encourage proposals related to underrepresented groups working in the sector.”

Aimed at “creating a more co-ordinated food systems-based approach to food-related opportunities and challenges in Canada,” the Food Policy for Canada launched last summer will also be implemented over the next year, aided by $134 million in funding.

AAFC plans to move the policy forward by helping Canadian communities access healthy food, make Canadian food a top choice domestically and internationally, support food security in remote communities and reduce food waste.

AAFC will be establishing an advisory council on the food policy, with representatives from the agri-food industry, civil society and academia.

Those efforts include AAFC plans to establish the long-awaited “Buy Canadian” promotion campaign, which will include promotional products to advertise Canada’s food system at home and abroad.

A food waste reduction initiative, which will include a fund to “seek innovative solutions to reduce food loss and waste” will be implemented as well.

Other measures are included in AAFC’s 2020-21 plans, including “possible changes to the AgriStability program.”

Calls for changes to business risk management (BRM) programming have long been in the works, highlighted by an AAFC review completed in 2018.

It’s expected an announcement on changes to BRM programs will come sometime this summer, though no mention of that is made in the department’s planning documents.

AAFC is expecting to “explore experimental approaches to program delivery that could provide data and knowledge leading to the growth of domestic markets and the diversification of export markets.”

Those efforts will include a “challenge fund” for innovations in food processing, grocery retail and food service.

“Challenges offer funding and other resources to help global innovators put their ideas into action and deliver meaningful results to Canadians,” the plan said.

AAFC is planning to shift the way agri-environmental research is conducted, according to its plans, by introducing a “Living Laboratories Initiative” using $10 million to “advance agricultural discovery science and innovation.”

The Living Laboratories Initiative will fund collaborative research between farmers and scientists that develops, tests and monitors new practices in a real farm context. Two of five sites in the works have been in operation since April 2019.

A project in Manitoba focuses on climate change, soil health, water health and biodiversity while dozens of people and organizations are involved in a project on Prince Edward Island focusing on subjects such as water management and fertilizer use.

Sites in Quebec and Ontario are being set up this year, with British Columbia establishing a Living Laboratory in 2021.

“The result will be more practical technologies and sustainable farming practices that can be adopted more quickly by Canadian farmers,” AAFC said.

— D.C. Fraser reports for Glacier FarmMedia from Ottawa.

The post Trade pacts, food policy on AAFC’s agenda for 2020-21 appeared first on Alberta Farmer Express.

The escalating clash over trade between Washington and some of its closest global partners cast a cloud over Trump’s efforts to make history in nuclear talks in Singapore on Tuesday with Kim Jong Un of North Korea, one of America’s bitterest foes.

Having left the Group of Seven summit in Canada early, Trump’s announcement that he was backing out of the joint communique torpedoed what appeared to be a fragile consensus on the trade dispute between Washington and its top allies.

“Fair trade is now to be called fool trade if it is not reciprocal,” said Trump, who flew from Canada to Singapore on Sunday to prepare for the first-ever summit between a U.S. and North Korean leader.

“Sorry, we cannot let our friends, or enemies, take advantage of us on trade anymore. We must put the American worker first!”

The communique, which had appeared to have papered over the cracks that surfaced so uncharacteristically at the G7, said the leaders of the U.S., Canada, Britain, France, Italy, Germany and Japan were agreed on the need for “free, fair, and mutually beneficial trade” and the importance of fighting protectionism.

“We strive to reduce tariff barriers, non-tariff barriers and subsidies,” the statement said, which came despite Washington appearing intent on taking more punitive steps on trade.

Trump’s extraordinary outburst on Monday against NATO allies, the European Union and Canada appeared aimed at striking a chord with voters who support his “America First” agenda.

At the same time, however, it put Trump in the position of going into a crucial summit at odds with countries he needs on his side to pressure North Korea to move toward dismantling a nuclear arsenal that threatens the U.S.

“Not fair to the people of America! $800 billion trade deficit,” he said. “Why should I, as president of the United State, allow countries to continue to make massive trade surpluses, as they have for decades, while our farmers, workers + taxpayers have such a big and unfair price to pay?”

It was left to Trump’s aides to figure out how to explain Trump’s airing of grievances against trading partners instead of focusing on his coming talks with Kim, which the president’s supporters hope will provide him with a major foreign policy win.

Irritants will be overcome

Secretary of State Mike Pompeo praised European countries for helping to bring about the North Korea summit, alluding to their enforcement of sanctions against Pyongyang. He expressed confidence that U.S. relations with other G7 countries would continue to move forward, despite the weekend clash in Canada.

“There are always irritants in relationships,” Pompeo told reporters. He dismissed as “ludicrous” the notion that Kim would decide he could not trust the U.S. because of the G7 dispute.

White House spokesman Raj Shah said Trump was “rattling the cages right now on trade,” insisting there was no reason to believe there would be any negative fallout for the North Korea summit. “These are really unrelated baskets of issues.”

But one U.S. official, speaking on condition of anonymity, acknowledged: “The timing for all this is not very good at all.”

The prospect that Trump could be moving toward an even greater protectionist trade policy is likely to chill financial markets worried about tit-for-tat escalation that could lead to a full-blown global trade war.

“Business confidence, and subsequently capital spending, is at risk if this tension continues through the summer,” said Tai Hui, J.P. Morgan Asset Management Chief Market Strategist for Asia Pacific. “This could cast a long shadow over global growth, which has rebounded in recent weeks after a soft start to the year.”

Nevertheless, markets were relatively calm on Monday after an early wobble.

Trump also lambasted fellow members of the North Atlantic Treaty Organization (NATO) for paying disproportionately less than the United States to maintain the Western alliance.

“The U.S. pays close to the entire cost of NATO — protecting many of these same countries that rip us off on trade (they pay only a fraction of the cost – and laugh!),” he tweeted. “The European Union had a $151 billion surplus – should pay much more for military!”

“Germany pays 1 percent (slowly) of GDP towards NATO, while we pay 4 percent of a much larger GDP. Does anybody believe that makes sense?”

“We protect Europe (which is good) at great financial loss, and then get unfairly clobbered on trade. Change is coming!”

Trump also renewed attacks on Canadian Prime Minister Justin Trudeau, who had hosted the G7 meeting in Quebec.

“Justin acts hurt when called out!” the U.S. president said in his latest tweet. On Saturday, he called the Canadian prime minister “very dishonest and weak” and added that “Our Tariffs are in response to his of 270% on dairy!”

Place in heaven

White House economic adviser Larry Kudlow accused Trudeau of betraying Trump with “polarizing” statements on trade policy that risked making the U.S. leader look weak ahead of the historic summit with Kim.

“(Trudeau) really kind of stabbed us in the back,” Kudlow, the director of the National Economic Council who had accompanied Trump to Canada, said on CNN’s “State of the Union.”

Trade adviser Peter Navarro told Fox News Sunday that “there is a special place in hell for any leader that engages in bad faith diplomacy” with Trump.

Pompeo, at the Singapore briefing, pointedly ignored a reporter’s question about Navarro’s comment and left the podium while he was being pressed for an answer.

Trudeau, in Quebec City for bilateral meetings with non-G7 leaders after the summit, did not comment as he arrived.

But he got direct personal support from some European leaders.

British Prime Minister Theresa May “is fully supportive” of Trudeau and his leadership, a senior UK government source said, while European Council President Donald Tusk tweeted: “There is a special place in heaven for @JustinTrudeau.”

— Reporting for Reuters by Matt Spetalnick and David Brunnstrom; additional reporting by Vidya Ranganathan in Singapore and Marius Zaharia in Hong Kong; writing by Simon Cameron-Moore.

The post Trump’s tweets spew ire on Trudeau, EU, NATO appeared first on Alberta Farmer Express.

More than 20 provisions have been suspended or changed in the final text ahead of the deal’s official signing in March, including rules around intellectual property originally included at the behest of Washington.

The original 12-member deal was thrown into limbo early last year when U.S. President Donald Trump withdrew from the agreement to prioritize protecting U.S. jobs.

The 11 remaining nations, led by Japan, finalized a revised trade pact in January, called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). It is expected to be signed in Chile on March 8.

The deal will reduce tariffs in economies that together amount to more than 13 per cent of the global GDP — a total of US$10 trillion. With the U.S., it would have represented 40 per cent.

“The big changes with TPP 11 are the suspension of a whole lot of the provisions of the agreement. They have suspended many of the controversial ones, particularly around pharmaceuticals,” said Kimberlee Weatherall, professor of law at the University of Sydney.

Many of these changes had been inserted into the original TPP 12 at the demand of U.S. negotiators, such as rules ramping up intellectual property protection of pharmaceuticals, which some governments and activists worried would raise the costs of medicine.

The success of the deal has been touted by officials in Japan and other member countries as an antidote to counter growing U.S. protectionism, and with the hope that Washington would eventually sign back up.

“CPTPP has become more important because of the growing threats to the effective operation of the World Trade Organization rules,” New Zealand Trade Minister David Parker said on Wednesday.

Last month, Trump told the World Economic Forum in Switzerland that it was possible Washington might return to the pact if it got a better deal.

However, Parker said on Wednesday that the prospect of the U.S. joining in the next couple of years was “very unlikely” and that even if Washington expressed a willingness to join CPTPP, there was no guarantee that the members would lift all the suspensions.

Parker said the deal would likely come into force at the end of 2018 or the first half of 2019.

Governments were quick to tout the economic benefits of the agreement.

“The TPP-11 will help create new Australian jobs across all sectors — agriculture, manufacturing, mining, services — as it creates new opportunities in a free trade area that spans the Americas and Asia,” said Steven Ciobo, Australia’s minister for trade in an emailed statement.

New Zealand’s government expected the CPTPP to boost the island nation’s economy by between NZ$1.2 billion (C$1.11 billion) and NZ$4 billion a year, with beef and kiwifruit exporters among the top beneficiaries of the deal.

Brian Innes, president of the Canadian Agri-Food Trade Alliance, representing export commodity groups, said CAFTA is “especially pleased that the market access provisions in the original agreement remain intact.”

Gaining preferential access to Japan is “especially important,” he said in a release Wednesday, “since it is the third-largest market for Canadian agriculture and agri-food products, accounting for $4 billion in exports in 2016.”

Taking part in the CPTPP will give Canada a competitive advantage over the U.S. in several markets, CAFTA said, and will also level the playing field for Canadian exports to other CPTPP countries, such as Australia, which already have trade pacts with Japan.

The pact’s 11 member countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

— Reporting for Reuters by Charlotte Greenfield in Wellington and Colin Packham in Sydney. Includes files from AGCanada.com Network staff.

The post Final version of Trans-Pacific trade deal released appeared first on Alberta Farmer Express.

Frum, a senior editor at The Atlantic magazine and, more recently, an owner of Ontario farmland, told the Grain Farmers of Ontario March Classic in London recently that global markets have been poor at pricing in political risk, so farmers should take steps to manage their risk themselves.

The good for the economy includes a likely end to tepid economic growth in the U.S. over the past 15 years, said Frum.

“There is a big tax cut on the way in the U.S. It will have two powerful and positive effects,” including putting more money in people’s pockets and creating government deficits.

Deficits are also stimulating to the economy, said Frum, who recently took possession of a piece of Prince Edward County farmland through a family succession process.

Stimulus should lead to more demand for products, including food from Canada. That fiscal stimulus will be thrown into an economy that is already growing and creating more consumer confidence.

The Trump administration has already limited some of the regulations of the Dodd-Frank Act and as a result, consumer lending will be made easier.

“There will also be a lot less petty, harassing regulation, especially in agriculture,” he said.

The Waters of the United States regulations was one of the worst offenders, said Frum, as the U.S. Environmental Protection Agency was claiming authority over areas where water ran for limited periods of time each year.

“The foot of government will be less on their neck and that will be a positive thing,” he said. “Regulatory changes in the U.S. will have knock-on effects here too.”

He expects 2017 to be a bullish year and 2018 likely will be so too.

The bad

However, there are other concerns with the U.S. administration that we haven’t seen from previous presidents.

Not only is the Trump administration protectionist, it will be manifested in “petty and capricious protectionism, through regulation, not through law,” said Frum.

He doesn’t expect that the administration will have the capacity to renegotiate the North American Free Trade Agreement (NAFTA) anytime soon. But he expects to see petty harassment, including harassment of travellers.

Trump’s travel ban, now on six countries, isn’t just affecting residents of those countries, but also the large diasporas of those countries. Foreign applications to U.S. universities are already down 40,000 year over year, Frum said, and businesspeople and professionals with conferences and holdings in the U.S. are limiting their travel.

A rise in interest rates driven by consumer spending and greater deficits in the U.S. could mean a rising U.S. dollar, which could help Canadian exports. It could also inflame protectionist sentiment in the administration, which has yet to find much problem with Canada.

Frum’s other concerns include the way the Trump family is acting and the deals they are completing to their benefit, along with cash infusions they are taking from foreign entities.

“The presidential family is behaving in a way the presidential family has never behaved before,” he said.

He worries about the decline in public integrity, the tradition of a lack of corruption.

“It is a precious, precious thing and once it is damaged it is hard to change it. It starts from the top.”

The ugly

Frum said his concerns about potential ugly implications of the Trump presidency include areas harder to predict.

He’s chiefly concerned with the unpredictability and renegade tendencies of the Trump administration.

There are members of the White House who can’t even get security clearance because of their previous relationships and transgressions.

“There’s a real instinct for conflict and a bad instinct for bringing friends along.”

Trump has also hit back at critical allies Germany, Britain and Australia. “There’s a potential for a conflict that the U.S. could get bogged down in and is in alone.”

However, Frum said, there are numerous ways that Trump could be sidelined in his tone and agenda, including by Congress, by the fact that government is paralyzed due to a lack of the many appointees needed to make it work, or by the potential Trump could find other interests that are less dangerous.

The challenge for businesses is that no one knows, and unlike previous administrations, no one can predict outcomes from this administration. Managing that risk will be up to businesses themselves.

— John Greig is a field editor for Glacier FarmMedia based at Ailsa Craig, Ont. Follow him at @jgreig on Twitter.

The post Take advantage of growth, guard against risk with new U.S. regime: Frum appeared first on Alberta Farmer Express.

That’s the advice of former prime minister Brian Mulroney for those wondering what Donald Trump’s presidency will mean for this country.

“I know you’re wondering how Canada will fare under the Trump administration,” Mulroney said at FarmTech. “I’ve had the privilege of knowing both Hillary (Clinton) and Donald for 25 years, and the unpredictability he is showing is a side of his personality that I have not seen before.

“But I am convinced that if we play this wisely, there are more opportunities for constructive partnerships between us than for difference or concern.”

Mulroney helmed the Canada-U.S. Free Trade Agreement three decades ago and negotiated the North American Free Trade Agreement with Mexico five years later.

“The theory was that if we compete fairly and effectively on our own continent, we would be much better able to compete globally,” said Mulroney, prime minister from 1984 to 1993. “That promise is even more compelling today, especially as we see increasing signs of protectionism on many, many fronts.”

But Canada also needs to be vigilant in safeguarding access to the U.S. market, he said.

“I don’t have to remind anyone with a television today of the damage of protectionism and the growing threat that protectionism has on the prosperity of anyone in this room today,” he said. “You will see it on your television tonight and every night thereafter for a long period of time.”

Easy targets

Trade agreements have become easy targets for Americans frustrated by the slow recovery of their economy. That ire isn’t directed at Canada, but “we should do everything to make sure we don’t become a target accidentally,” he said.

He likened the reaction to the early days of Trump’s tenure to the initial negative attitudes towards president Ronald Reagan.

“Don’t take in all the stuff you see in the news at night and conclude that those people know what they are talking about. Give him the benefit of the doubt,” he said.

Mulroney said he used that approach when negotiating trade deals with both Reagan and president George Bush Sr.

“The key is to find avenues of common ground and common purpose while managing differences — in a relationship this complex, there are bound to be differences,” he said.

Mulroney spoke of the positive benefits of the free trade deals, including a 300 per cent increase in trade between Canada and the U.S., and increased job creation in both countries. The two countries’ acid rain treaty was also a landmark agreement and set the stage for future ones, he said.

But he urged a go-slow approach to environmental measures, such as the carbon tax, that would undermine Canada’s competitiveness.

Instead, Ottawa should be persistent and rigorous about defending access to the U.S., and in reminding American leaders that two-way trade flow benefits both countries.

“What we cannot do is stick our heads in the sand ostrich style and hope that the protectionist measures down in Washington will abate on their own,” he said. “Forget it. It’s not going to happen.”

Look abroad

The agreement with the European Union, once ratified, will offer significant promise to Canadian agriculture. Canadian exporters face high tariffs on agricultural products, but there is duty-free access for beef, pork, and bison along with preferential access for processed food products and beverages.

“It is estimated conservatively that our agri-food exports to the EU will increase by a minimum of a billion dollars annually,” Mulroney said. “The agreement has been signed and is ready for ratification… but it will not be a slam dunk because of the nationalist protectionist pressures we saw in Brexit that are now present across Europe.”

Along with planning for a post-Brexit agreement with the U.K., Canada should be a “leader instead of a laggard” in seeking out trade deals.

China is now Canada’s second-largest market for agricultural goods, and now comprises 16 per cent of Canada’s total exports versus five per cent in 2008.

“I strongly encourage the Trudeau government to move coherently and sensibly evaluate China. Because of our rich commodity base, Canada is better positioned to take advantage of emerging opportunities for economic expansion, not only in China, but throughout the Asia Pacific region.”

Don’t “wait for customers to come calling at our door,” he warned.

“We have to demonstrate convincingly that we want their business; that we will invest and innovate to ensure high quality; and that we will be able to provide them with an efficient source of supply, which is something that our railroads have to understand as well.”

With the Trans-Pacific Partnership dead in the water, Canada should strike trade agreements with countries such as Japan, Malaysia, and Vietnam, he said.

“Above all, we need to broaden the vision on trade and the audacity to pursue, but not to replace, to complement what would be our most likely market — the United States, for decades to come. The more balance, the better.”

Mulroney also said Canada should consider dismantling its supply management systems for dairy and poultry in order to facilitate trade deals. The former prime minister fought to preserve supply management during NAFTA negotiations but in recent years has called for it to be phased out.

This article first appeared on AGCanada.com.

The post Give Trump a chance and ‘play this wisely,’ says Brian Mulroney appeared first on Alberta Farmer Express.

Trump’s pride in his unpredictability is troubling, given he’s the president-elect, said David Frum, political commentator, former speechwriter for President George W. Bush, and a senior editor for Washington-based magazine The Atlantic.

However, it’s not necessarily all bad news, Frum told an audience at Saskatoon’s Prairieland Park on Tuesday during the CropSphere conference.

Frum, the conference’s opening keynote speaker, said he foresees big tax cuts, corporate tax reform and few spending cuts under Trump. The U.S. could turn into an “import magnet,” pulling up global economic growth, Frum said.

Given the low unemployment numbers in the U.S. and Trump’s anti-immigration stance, however, the country could also flip into inflation. The likelihood of inflation depends on whether the U.S. has already reached its capacity for economic growth. Frum was “agnostic” on whether that was the case, though he said they were in the neighbourhood.

But Trump’s commitment to protectionism, combined with his capriciousness, means trade troubles are likely on the horizon. Speaking to media on the conference sidelines, Frum said the stakes are “colossal” for the U.S., Canada, and the world.

“You blow up world trading systems, that’s not something that just touches other people. It touches everybody.”

Frum said Trump has a point about abuses by China. China does have currency problems, he said, but the problem has to be handled carefully, keeping the end goal in mind. “You don’t make a cure that’s worse than the problem.”

But will Trump’s protectionism directly impact Canada’s ag exports?

Trump has a lot of energy, Frum said, but it’s finite. He may direct his energy away from issues that would hurt Canada.

As well, the president does not form the whole of the government, Frum added. Along with Congress, there are people working for government agencies who are “very sophisticated” about trade and economic issues, he said.

Canadians have already been reminding members of the U.S. Congress about the importance of trade between the two countries, he said. The continental investment economy is so integrated that it’s not feasible to hurt Canada without blowback in the U.S., he added.

“When Canadian farmers borrow money, they borrow from Canadian banks. But where are the Canadian banks getting their capital from? They’re going to a global financial market.”

U.S.-Canada relations don’t run entirely through the national capitals, Frum said. The governor of South Dakota and premier of Saskatchewan are likely to be concerned about the same issues, and have the same views on those issues, for example.

“These are integrated relationships that look a lot like the domestic economy, frankly,” said Frum.

Frum also fielded questions from the CropSphere audience. Asked about whether Canada’s planned carbon tax will hurt exports, he said it will depend on program design. It will need to be remittable at the border to be economically neutral, he said.

Frum’s main advice to Prime Minister Justin Trudeau is to remember that Trump is “emotionally needy” and “sensitive.”

“He loves compliments. And just when you think you’ve given him enough compliments to turn your own stomach, that’s when the compliments are beginning to work.”

Frum was also asked about the likelihood of impeachment. It would take a huge financial scandal or real evidence of collusion with Russia to remove Trump, Frum said.

As for whether Trump will soften once he takes office, Frum said there was little chance of maturing at Trump’s age. “There’s only decay.”

Frum repeatedly emphasized that Trump would not be the whole government, given the role of Congress and other institutions.

“We’re going to see a test of the whole American system.”

— Lisa Guenther is a field editor for Grainews and Country Guide at Livelong, Sask.

The post Protectionism game comes with raised economic stakes: Frum appeared first on Alberta Farmer Express.