Trump’s trade policy helps exports of Canadian lobster
Trade pacts giving processors here a big advantage overseas
This lobster factory on a windswept bay in eastern Canada is so remote that its workers have to drive for miles just to get cellphone service. But Gidney Fisheries is truly global, with its lobsters landing on plates in Paris and Shanghai through trade agreements hammered out in far-off capitals.
Of late, these trade pacts have been shifting in the factory’s favour, giving it an advantage over its U.S. competitors.
A new trade agreement between Canada and the European Union has slashed tariffs on imports of Canadian lobsters. That means more 747s filled with the crustaceans will depart from Nova Scotia for European markets this winter — and more revenue will flow to Gidney Fisheries.
The factory, which in the 1800s sent its lobsters to Boston by steamship, is flush with potential as it gains access to new markets and plans to increase its workforce by roughly 50 per cent, adding dozens of positions to its current payroll of around 85 workers.
“For us, free trade is a good thing,” said Robert MacDonald, president of Gidney Fisheries, which processes 10,000 to 15,000 lobsters a day.
The Trump administration has adopted a skeptical view of trade deals, promising to scrap or renegotiate global agreements that it believes put U.S. companies and workers at a disadvantage. Among them is the North American Free Trade Agreement, which the United States is trying to renegotiate.
It will join its partners in the agreement, Canada and Mexico, for a fifth round of talks in Mexico City that officially begin Friday.
Some trade experts, though, say the U.S.’s get-tough approach is dissuading foreign partners from jumping into talks. Other countries, like Canada, are forging ahead with their own trade deals as they balk at the tough terms the U.S. is demanding in its trade negotiations. Over the weekend, a group of 11 countries including Canada announced that they were committed to moving ahead with the Trans-Pacific Partnership, a sweeping multinational trade deal negotiated by the Obama administration.
As these deals progress, U.S. companies, particularly exporters, are finding themselves on the losing end of global trade as their competitors abroad gain easier access to foreign markets.
“We live in such a low-margin world, where industry after industry is engaged in fierce global competition,” said John G. Murphy, senior vice-president for international policy at the U.S. Chamber of Commerce.
“There is a sense in which the United States is standing still, while countries around us are moving forward.”
It’s a historic shift for the U.S., which has long led the charge for free trade and open markets. The U.S. has traditionally been the global leader in forging trade pacts, including during the Obama administration, which negotiated an earlier version of the Trans-Pacific Partnership and began talks with Europe on an agreement known as the TransAtlantic Trade and Investment Partnership.
When Americans think about lobster, Maine often comes to mind. But Nova Scotia has emerged as a fierce competitor in exporting lobsters, particularly to Europe. Last year, U.S. lobstermen sold only slightly more to Europe than their Canadian counterparts.
That balance could soon shift given the Canadian-European trade pact, which eliminated an eight per cent European tariff on live lobster when it went into effect in September. Tariffs on frozen and processed Canadian lobster will be phased out in the next three to five years as part of the agreement.
The elimination of European tariffs is “the single most challenging issue” for the U.S. lobster industry, said Annie Tselikis, executive director of the Maine Lobster Dealers’ Association, which represents companies that buy lobster from Maine fishermen. “This trade agreement does give Canada a huge leg up in the European marketplace,” she said.