OUR RACKETS A LITTLE WORSE.

Saturday’s Financial Post featured the story “Protectionist Racket”, Naomi Powell’s terrific report on U.S. trade policy’s sacred cows, from cotton to sugar to maritime transport. We have notoriously skyhigh tariffs in our supply-managed industries, but the Americans have their blemishes, too. In fact, although some countries protect much more than others, just about all countries have industries that, for various political reasons, are too sensitive to open up to full foreign competition.

Without really disagreeing with Powell’s points, let me quibble with the details and then ask whether truth really matters in the dogfight we’re currently in with the Americans.

On services, the Americans may actually be a little more protectionist than we are. That’s strange because they’re world leaders in many services. But of 22 industries for which the OECD calculates a “services trade restrictiveness index” our index is lower in 13, which means that in those industries we’re less restrictive. Theirs is lower in just seven and in two industries the two countries have basically the same score. Sure, how you score depends on exactly how the index is calculated and that’s always debatable so I wouldn’t bet the bank (or telecoms or retail sector) on those numbers, but they’re not what you might have expected.

However, on goods, which are President Trump’s big focus, the WTO’s “tariff profiles” data suggest that for most categories of goods the U.S. is at least a little more open than we are.

The simple average of their tariff rates for all countries and all goods? 3.4 per cent. Ours? 6.5 per cent. Their average in agricultural goods? 4.8 per cent. Ours? 15.4 per cent. Theirs in dairy products? 16.0 per cent. Ours (as even the president knows, and might be the only thing he knows about Canadian tariffs): 218.5 per cent.

They do have higher average tariffs than we do on “sugars and confectionery” (13.2 per cent versus our 4.3 per cent), “beverages and tobacco” (15.0 per cent versus our 6.5), and cotton (4.6 per cent versus 0.8). But for most other broad categories of goods, our tariffs are higher than theirs.

Among the highest remaining tariffs in both countries are those on clothing, textiles and footwear and leather goods. Are those things crucial to national security? Hardly. North America isn’t France: neither country needs to look stylish marching off to war. No, we protect these industries because they have been important employers in the past and, politically, it’s hard to let those jobs go. But if our tariffs are down to zero or next to zero for thousands of other goods, does it really make sense to be locavores for shoes, pants, skirts and shirts?

In sum, although both countries have mainly low tariffs, we do each have our tariff “peaks,” which is what particularly high duties are called in trade circles. And ours are higher and at least slightly more numerous than theirs.

Does it matter? The truth always matters and it especially matters in a world of Trumps and Putins. But will it influence the negotiations? The president is unlikely to be moved, even if the facts do penetrate his highly selective consciousness. The Wall Street Journal reported this week that the United States’ 20 most manufacturing-intensive Congressional districts all voted Republican in 2016. Unless the truth also penetrates to those voters, it won’t much influence the politicians they’ll be voting for, even if they know the true trade numbers. Neither the president nor Congress seems willing to suffer the political pain of reducing U.S. protection merely to get a trade deal with Canada.

Where does that leave us? America’s trade negotiator, Robert Lighthizer, is continuing trade talks with the new Mexican administration. He’s also engaged in blue-sky talks with Europe and Japan about how to re-write the WTO so as to deal with Chinese state capitalism. That doesn’t leave much time, space or patience for us. And his patience reportedly is already close to running out.

At the moment, the truths most relevant to us are that: the Trump-mare isn’t ending soon. We do have more and higher tariff peaks than the Americans do. And we’re facing an administration that believes it holds the key trump (sorry) in its dealings with us — which is that access to the Americans’ market means a lot more to us than access to our market means to them.

Lowering our tariff peaks might hurt our pride. But it would help consumers, who, policy-makers forget, are Canadians, too. In the long run it probably also helps our producers, even if it hurts initially. Are 218.5-per-cent dairy tariffs really a political, social and national security necessity for us? We couldn’t get by with just 100 per cent? Or maybe 99, to be able to say we no longer have any three-digit offenders?

Let’s face up to these truths and get on with it.

CANADA’S TARIFF ‘PEAKS’ ARE STILL HIGHER AND MORE NUMEROUS THAN IN THE U.S.