Russell Wangersky: Trade tribunals and other amusements
How many lawyers does it take to decide whether an infant’s bouncy-chair is a toy or furniture? (No, this isn’t a joke.)
Dal AC students drink milk from calf bottles during 'Farmers' Olympics' activities in this file photo from 2016.
When President Donald Trump visited the dairy heartland of the United States last week, he was quick to tell a Wisconsin audience that, “in Canada some very unfair things have happened to our dairy farmers and others.”
He called Canadian trade practices a disgrace.
So much for “tweaking” NAFTA. Daisy the cow is now at the heart of a looming international trade war.
It’s our bad luck that China’s leader was recently in Florida, and suddenly the attention-span-challenged U.S. president has a new best friend. After criticizing China relentlessly about its trade practices, Trump now speaks highly of his largest and most predatory trading partner.
But he’s scaled back the anti-Chinese rhetoric and replaced it with an anti-Canada tirade. We’re on his revolving axis of evil for political expediency.
No sooner had he called out Daisy than Trump was slamming Canadian softwood lumber and Alberta oil. If his intention was to rattle his northern neighbour, he’s succeeded. Trade imbalances directed at Mexico and China are now pointing this way.
In the span of 24 hours this week, Trump went from tweaking NAFTA, to threatening an executive order abandoning the 1988 deal, and back to renegotiation. His latest tirades are ploys to win concessions at the bargaining table.
He clearly doesn’t realize the U.S. enjoys a huge dairy surplus with Canada. Or he just doesn’t care. We import $900 million in dairy products a year and export just under $211 million. How can he win a NAFTA ruling? He can’t, so he will force renegotiations on Canada.
And things are not all tranquil with Canadian milk. While farmers enjoy a degree of stability, dairies are consolidating and streamlining. Major Nova Scotia player Scotsburn, which closed its operations in St. John’s, was later purchased by Agropur of Quebec. Various plant closures and layoffs have occurred in all Atlantic provinces. Dairy giants Agropur, Saputo and Parmalat have gained control of a major share of the Canadian market.
ADL, a producer-owned major dairy based in Summerside, P.E.I., will face stiff challenges from cheese imports under the recently signed CETA trade agreement with the European Union.
Canada’s stable supply management system, which puts the burden on consumers, is far more efficient than American farm subsidies, which puts the burden on taxpayers. Yet, somehow, the fair treatment of U.S. dairy farmers is supposed to start in Canada?
U.S. dairy farmers are simply producing too much milk. In fact, the U.S. Department of Agriculture reported that 43 million gallons of milk were dumped in the first eight months of 2016. How is this Canada’s fault?
Former prime minister Brian Mulroney, who negotiated and signed NAFTA and is buddies with Trump, offers sage advice. To paraphrase: keep your head down, your mouth shut, go to court or a trade tribunal and eventually Canada will win, like we always have done.