Canadian Agriculture, and International Trade “A country that depends on exports, imports its misfortunes” Stephen Leacock, 1941 Trade has always been a big part of what Canada is all about Trade and trade routes motivated discovery (short cut to the East) Early development in the East the result of trade interests supply of resources to the colonial powers (Britain, France) Exploration and settlement of Western Canada: driven by trade interests
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Canadian Agriculture, and International Trade “A country that depends on exports, imports its misfortunes” Stephen Leacock, 1941 Trade has always been.
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Canadian Agriculture, and International Trade
“A country that depends on exports, imports its misfortunes”
Stephen Leacock, 1941
Trade has always been a big part of what Canada is all about
Trade and trade routes motivated discovery (short cut to the East)
Early development in the East the result of trade interests
supply of resources to the colonial powers (Britain, France)
Exploration and settlement of Western Canada: driven by trade interests
Company of Adventurers
The CPR + Macdonald’s National Policy (1878)
Fortunes and misfortunes of the 1600’s – 1900’s: All linked to trade
Late 1700’s – Napoleonic Wars – Louisiana Purcahse (1803)
1822 - Canada Trade Act
1840 – Corn Laws – 1849 Montreal Manifesto
1854 – Reciprocity Treaty
1900’s – prosperity linked to agr. exports
1911 – Federal Election (Laurier loses ….. again)
Late 1800’s MacKinley Tariff
1930’s - Smoot Hawley Tariff
Post WW II and future prosperity depends on our success in international trade
Canada Depends on Exports
1971 = $21 Billion2005 = $500 Billion
Exports of Goods and Services ($millions)1971- 2005
4 - Tri-national panel to deal with subsidy issues
5 - commitment to work towards elimination of export subsidies
6- technical, sanitary and phytosanitary regulations and standards still sovereign
• must be based on science criteria
7 - strict limits on export taxes and no new tariffs
8 - Commission for Environmental Cooperation (CEC)
GATT/WTO Agreement (1986 - 1995)
Agricultural Outcomes of the Agreement:.1 – Market Access: Tariffs - reductions by an average of 21% by 2001
- tariffications subject to GATT reductions
- minimum access to increase to 5% by 2001
2 - Domestic supports - progressive reductions of 20% on average by 2001
3 - Export Subsidies - progressive reductions in expenditures of 36%
4 - Sanitary & Phytosanitary Reg’s: - international scientific criteria
5 - Better dispute settlement process - International Trade Court
Some impacts on Canada
1) Market Access:
Canada agreed to a schedule of tariffs for Supply Managed commodities, and grains and oilseeds. These were to be reduced over time. 5% access with no tariff
AMBER BOX - trade distorting - subject to reduction over time
• direct support payments, input subsidies
• many Canadian programs fell into this box
• (GRIP, NISA, crop insurance)
BLUE BOX - US/EU programs (fixed areas); transitory programs
RED BOX – policies to be stopped - no agreement
e.g. quantitative restrictions that were replaced by TRQ’s
3) Export Subsidiesimpacted the US EEP and EU export restitutions subsidies for grain exports (WGTA in 1995)
Bottom Line
1) SM emerged unscathed in real terms
2) Prices for Western grains did move down
3) Set the stage for more livestock production and exports to the US and Asia (Japan)
4) More market access for grain and oilseeds in the international market, and processed agr-food products
What’s Ahead - Doha Round2001 - ??
1999 – Seattle: no agreement or real progress
2003 – Cancun: again no progress
2005 - Hong Kong
2006 - talks suspended, potentially revived in 2007
2008 - near agreement on agricultural texts
2007 US and EU - unwilling to agree on concessions on levels of domestic support and tariffs
Future Issues for Canada ?
>“Mega tariffs”
> Environment
> Food safety & food labeling (GMO)
NATO II ? - trade agreement with the EU ?
For centuries, England has relied on protection, has carried it to extremes and has obtained satisfactory results from it. After two centuries England has found it convenient to adopt free trade because it thinks that protection can no longer offer it anything.
Very well then, Gentlemen, my knowledge of our country leads me to believe that within 200 years, when America has gotten out of protection all that it can offer, it too will adopt free trade.
Attributed to Ulysses Grant, President of the US, 1868 - 1876
(Excerpted from Le monde diplomatique, December, 2003)