Canadian ag's view of NAFTA: Strong support north of border, official says
The North American Free Trade Agreement is a big deal to U.S. agriculturalists. NAFTA is even more important to their Canadian counterparts, a Canadian attorney with close ties to agriculture says.
Given that, ongoing efforts to revise NAFTA are "a huge concern," Kenton Rein says.
Rein is a partner in Cassels Brock's Calgary, Alberta, office, where he leads the firm's agribusiness practice. He also is on the executive committee of the Canadian Bar Association's Food and Agribusiness Section.
There's particular concern in western Canadian agriculture that the ongoing dispute over dairy products will expand to include Canadian grains and pulses, he says.
"We hope grains and pulses don't get dragged into the dairy side," Rein says.
NAFTA, which went into force in 1994, eliminated almost all tariff and quota barriers on trade among the United States, Canada and Mexico. The agreement also simplifies cross-border investment and expands cooperation on environment and labor issues.
There's an old rule of thumb that the U.S. population is about 10 times greater than Canada's and that the U.S. economy is about 10 times bigger than Canada's.
Because the U.S. economy is so large, Canadian agriculture — including its grain and pulse producers — rely heavily on exports to America, Rein says.
"As Canadians, we've benefitted from having a neighbor with a very large market," he says.
Despite disagreements, most notably on Canadian dairy and Mexican sugar, U.S. agriculturalists generally support NAFTA.
Canadian ag does, too, Rein says. So there's concern that President Donald Trump, who frequently criticized NAFTA as a candidate, has directed his administration to make major changes to the agreement. He's even threatened to withdraw the United States from the agreement.
Canadian agriculturalists see the impetus to revise NAFTA as politically motivated and coming from the Trump administration, Rein says.
"If not for President Trump, we'd probably have seen an extension of NAFTA," he says.
Dairy, which was excluded from NAFTA in 1994, is a particular area of contention. The Trump administration, as well as many in U.S. ag, say the agreement now favors Canadian dairy producers, most of them in eastern Canada, at the expense of U.S. dairy farmers.
The concern in western Canada is that when "you open up a trade deal like this, everything goes on the table," Rein says. "Emotions can run high and everything becomes heightened," possibly lead to actions that otherwise might be not be taken.
American and Canadian ag producers, especially ones living in the western parts of the two countries, have far more in common than they do differences, says Rein, who once lived in the United States.
He thinks those bonds will grow over time as the world's growing population requires more food.
"Agriculture's time is coming," Rein says. "As food demands increase, there will be regional banding together of western U.S. and western Canadian agricultural producers."