The Forgotten Scandal

by Ghislain Gervais - président

With the harvest season in full swing, you probably missed the scandal of the moment. I don’t mean the big Hollywood scandal involving Harvey Weinstein, or the issues affecting our homegrown Gilbert Rozon and Éric Salvail, which have raised some rather disturbing societal issues.

I am talking about a scandal that did not receive the press coverage it deserved because the above scandals filled the headlines.

While withdrawing from the North American Free Trade Agreement is something that Robert Lighthizer, the U.S. trade representative, and President Trump often bring up as an alternative to a new accord with Mexico and Canada, the U.S. trade representative’s office has not taken the time to analyse what the end of NAFTA would mean for the United States of America.

NAFTA is among the most significant trade accords yet since it created the largest free-trade zone in the world and groups together more than 480 million people. There are some 1.4 million dollars of products and services exchanged between Canada and the USA every single minute, and that represented $750 billion last year.

Many believe that the Trump administration’s decisions, which will affect millions of American jobs, are based solely on ideology and lack any true economic analysis, and that is a terrifying fact.

The U.S. government is improvising. The situation should call for a structured approach. The renegotiation that sought to modernise NAFTA is creating uncertainty and disturbing North American supply and value chains, which will undoubtedly curb investments. No need to add the threat of an economic chaos.

It is not surprising that in this context the U.S. government submitted a demand to the negotiating table to end supply management, thus allowing it to enjoy complete access to the Canadian dairy, egg and poultry markets.

This demand is just another in a series of controversial positions: Demanding that 50% of all automobile parts be manufactured on U.S. soil; getting rid of the dispute settlement system; the ‘Buy American Act’, which would limit Canada’s access to public call for tenders, or even the provision that would put an end to NAFTA after five years.

There are a number of people who believe that the only goal of making such demands is to derail negotiations and justify the U.S. pulling out of NAFTA.

Canada and Mexico had the right attitude in this context; they kept a cool head when confronted with these inadmissible demands and stated their desire to pursue negotiations until they could agree on a win-win deal.

Considering our country’s modest population, Canada’s economy needs international trade to prosper, and in this respect it is interesting to know that negotiations to conclude the Trans-Pacific Partnership without the U.S. are doing well.

Meanwhile, Japan is the second largest market for Quebec’s pork, and the conclusion of the Japan and EU free trade agreement last year could put us in a precarious position if we can’t arrive at the same export conditions.

However, we need to be cautious to ensure that the concessions made to satisfy our U.S. neighbours during the initial NAFTA negotiation, in sectors under supply management, are not de facto carried over into the new agreement.

Our governments need to understand that to feed a growing population in a context of extreme weather conditions they will have to develop and share a vision that would view foodstuffs as basic necessities that carry a heavy cultural weight rather than simple items to be traded

To summarize, agriculture and food must no longer be used as currency in other trade issues.

Think about it, and while you’re doing that I’ll wish you all an early Happy Holidays, far from such preoccupations.