Our federal government recently irritated the Grain Growers of Canada (GGC) when it seemed to indicate that it was rejecting some of the proposals put forth by the free trading “Cairns Group” of countries.
The Cairns Group, a loose association of countries dedicated to promoting free trade in agriculture, includes Australia and New Zealand, in addition to Canada, among others. Named after Cairns, Australia, where the group was formed, the association is supposed to stand as a free trade bloc, fighting off protectionist policies and trade-distorting subsidies, primarily from the United States and the European Union. As a principled organization, the member countries are supposed to “walk the walk” of free trade and not just “talk the talk.”
Little New Zealand has been at the forefront of trade liberalization and has completely opened its markets to all agricultural products. The benefits have been enormous, and agriculture has not only become more efficient but is now the real engine of the New Zealand economy. The 50 million sheep in New Zealand today produce as much meat as 90 million sheep did in that country prior to the liberalization. New Zealand “walks the walk.”
Canada, however, seems to want it both ways and this caused the GGC to spring into action. We claim to be free traders, yet do whatever we can to “protect” certain industrial and agricultural sectors. According to an initial GGC news release, “Canada has rejected the Cairns Group proposals for increases in market access and reductions in domestic support.”
Thanks to some effective lobbying by the GGC it appears the feds have not lost their senses after all. At a recent meeting in Bolivia, federal agriculture minister Lyle van Clief reaffirmed Canada’s determination to push together with the other members of the Cairns Group for a market-oriented agriculture trading system. This confirms the importance of involvement by farm and rural organizations in the policy process.
In western Canada, we live and die by free and open trade. Over 80% of what we produce on the farm is exported. This is especially so for the burgeoning livestock sector, which in Manitoba accounts for thousands of permanent jobs.
Brian Kriz, President of the GGC said, “Canada’s 80,000 grain and oilseed farmers’ production is worth roughly $10 billion per year. This significant contribution to Canada’s economy, its trade surplus, employment and rural well-being will be jeopardized by failure to realize real gains during the current WTO round.”
Closed markets and restrictions on international trade in agricultural products really hurt rural western Canada. Rejecting the Cairns Group, which Canada nearly did, would have made it all the more difficult for Canada to press the free trade case in other areas like softwood lumber and minerals.
Staying within the rules of the WTO still allows us to support agriculture in ways that are not self-defeating. These include Crop Insurance and payments that encourage farmers to deliver “environmental services” to the rest of society. These are the sorts of things we can and should do.
Trade inconsistencies make it very difficult for Canada to press the case for across-the-board free trade. Canada is the most trade-dependent nation on the earth, and it’s about time that we got serious about it. Staying with the Cairns Group of countries, thanks to the efforts of the GGC, is a good decision.