Business & Policy
From the Editor: April 2017
By Brandi Cowen
While making the rounds at ag industry events this winter, I noticed one topic was sure to draw a crowd every time. It seems producers, suppliers and other industry stakeholders are eager to soak up information on markets and international trade – and with good reason.
Within days of taking office, President Donald Trump signed an executive order withdrawing the United States from the Trans-Pacific Partnership (TPP), a 12-country deal representing about 40 per cent of the global economy. The move essentially killed the trade deal since, as Canada’s Foreign Affairs Minister, Chrystia Freeland, told reporters, “This agreement was so constructed that it can only enter into force with the United States as a ratifying country.”
When final details of the TPP were announced, industry groups expressed concerns. Chicken Farmers of Canada (CFC) noted Canada would be required to “increase its market access for chicken by 28 per cent to almost 10 per cent of our consumption” under the TPP, and Egg Farmers of Canada (EFC) cited “additional access to the Canadian egg market in the order of 16.7 million dozen eggs, increasing to 18.8 million (or approximately 2.3 per cent of production),” according to press releases issued by both groups in October 2015.
Turkey Farmers of Canada (TFC), too, had concerns about what increased market access for imported products could mean for Canadian production. However, as TFC chair Mark Davies stated in a press release, “Although the additional access granted to the Canadian turkey market will certainly be challenging, the finalization of the TPP agreement removes the cloud of uncertainty farmers have been living with over the last several years. We trust this will provide a stable, predictable trading environment moving forward, as the government predicts.”
Now, with TPP off the table, that trading environment seems a lot less stable and predictable. In the days immediately after the U.S. pulled out of the agreement, cable news channels filled hours of programming with pundits speculating on what form a substitute for TPP might take. One thing most seemed to agree on? The governments that invested so much time and money in securing the TPP will eventually come up with a new trade deal; securing more favourable terms of trade with such a large proportion of the global economy – with or without the U.S. – is too tempting an opportunity to let slip away.
Another element of uncertainty stemming from south of the border is how the North American Free Trade Agreement (NAFTA) may be transformed if Trump fulfills his promise to “tweak” it.
Terms of trade with the U.S. may change anyway, at least in the poultry sector, in response to recent issues with American spent fowl exports to Canada in excess of total national production figures. As our story on page 30 explains, CFC has forwarded three key recommendations to the federal government that would address spent fowl fraud at the border and protect domestic producers’ share of the market. How the government will respond remains to be seen.
So, what are Canadian producers to do? Get involved with associations and commodity groups to help shape the messages being passed along to the officials who negotiate trade deals. You can bet other sectors will be advocating for their own interests. The poultry industry can’t afford not to have a voice at the negotiating table.