My previous column highlighted the lack of any specific agriculture policies from the two main American Presidential candidates. However, both the Trump and Clinton campaigns have other policies that would impact the agriculture industry, some of them in a severe way.
The Trump plan against illegal immigrants, for instance, would devastate the fruit and vegetable production sector. Such draconian actions would affect United States food exports to Canada, but an even bigger impact on Canadian agriculture would come from the policy positions of both candidates on trade treaties. The big concern is the Trump position on the North American Free Trade Agreement (NAFTA).
NAFTA has actually had more impact on sectors of the economy other than agriculture — the ag trade between Canada and the United States was already relatively tariff-free before NAFTA’s implementation. What plagued agricultural trade were American nuisance countervail actions, mostly against grains and cattle/beef, instigated by protectionist American groups. Most of the vexatious claims were eventually dismissed but at great cost to Canadian producers. Whether or not NAFTA had a role in reducing such trade mischief is not clear. Certainly the agreement played no role in the United States Country of Origin Labelling (COOL) dispute, which was resolved by a WTO tribunal after a 10-year fight. It should be realized that no matter what treaty the United States makes with anyone, the United States congress reserves the right to overrule the intent of such agreements virtually on a whim. This has been seen in the continuation of countervail actions, border protocol harassment and legislation like COOL.
Trump has emphatically stated that in his opinion NAFTA is the worst trade treaty in human history – no doubt if he wins he will seek to upset that treaty and hold Canada to ransom. The problem for the agriculture trade is that it will be caught in the crossfire and may be adversely affected as collateral damage. History has shown that the United States is quick to use countervail actions and border access mischief to frustrate Canadian ag imports. A Trump victory may embolden the usual cabal of protectionist zealots to re-launch trade actions. Interestingly, surveys show that Canadians are over 60 per cent opposed to NAFTA in the belief that the agreement negatively affects Canada in favour of the United States – which is the direct opposite of what Trump and many Americans perceive about the treaty.
The Clinton policy is less antagonistic towards NAFTA; it only implies that the agreement should be reviewed. NAFTA is a sensitive issue with Hillary Clinton as it was championed and implemented by her husband when he was President. As the Presidential campaign unfolds, though, she may be goaded into taking a more hardline position on the matter. That wouldn’t be difficult for Clinton as she has shown to be quick to kick Canada on trade issues. She supports Obama against the Keystone XL pipeline and as a former Senator she supported a resolution to close the United States border to all Canadian beef when BSE broke out. She was also an early supporter of COOL legislation when it was first proposed. One suspects that if she becomes President she could cause grief by supporting barriers to Canadian soft wood imports.
There is a positive/negative side to another trade policy of both candidates – they are both opposed to the Trans Pacific Partnership (TPP) trade agreement. This would effectively kill the agreement, as American participation is central to its very concept. For Canada, TPP has both good and bad aspects. Firstly, Canada has to be part of the agreement as trade is so critical to the lifeblood of our economy. There would be devastating trade and financial consequences to this country if we were outside of such an agreement. For agriculture, TPP is something of a mixed bag – it would be bad for supply managed commodities like dairy and poultry, but fairly good for grains, oilseeds and meat exports. One hopes that the likely demise of a TPP trade agreement will spur on our Canadian trade negotiators to come to bilateral free trade agreements with countries like Japan, South Korea, and China. Countries such as the United States and Australia have already signed such agreements with those countries.
It would seem that with COOL resolved and no other significant United States trade disputes involving agriculture, all is relatively calm except for some import protocol mischief involving beef. Perhaps the best Canada can hope for from whoever wins the upcoming American election is that our trade relationship will receive some benign neglect from the new President.