Trump says Canada treats U.S. ‘poorly’
Farm exports to Canada since 1987 up tenfold
As Canadian and American trade negotiators resumed their high-pressure talks in Washington Wednesday, one of Donald Trump’s favourite themes loomed large.
For 17 months, the president has accused this country of giving U.S. farmers a raw deal, imposing 300-per-cent tariffs on their dairy products and committing other, unspecified injustices that would have to be remedied in a revamped NAFTA deal.
“Canada has treated our Agricultural business and Farmers very poorly for a very long period of time,” he charged on Twitter in June. “Highly restrictive on Trade!”
Canada will be left out of a new agreement the U.S. has struck with Mexico if a fair deal cannot be reached “after decades of abuse,” Trump said last weekend.
But the agriculture issue’s outsized profile in the negotiations belies a surprising fact: for most of the States’ farm sector, the North American Free Trade Agreement — and trade with Canada specifically — has been a resounding success.
With tariffs reduced to zero on the vast majority of agricultural products, U.S. farm exports to Canada have soared from about $2 billion a year to over $20 billion since the nations first signed a free-trade pact, American government data show. Even U.S. exports of dairy products to Canada — a legitimate sore point — have ballooned over ten-fold in that time.
In March the Trump administration itself admitted that “the main reason for strong increases in (farm) trade with Canada” was the countries’ 1987 free-trade agreement, and the NAFTA accord that replaced it.
“These trade agreements eliminated nearly all tariffs on U.S. exports to Canada, significantly improving export opportunities for U.S. producers,” said the U.S. Department of Agriculture report.
Canada was the biggest export market for U.S. agriculture in 2017.
“For farmers, it’s just seen as a place where there has been a lot of good back-andforth trade,” Dave Salmonsen of the American Farm Bureau Federation said about NAFTA. “They want it to keep going.”
Nick Giordano, a vice president at the National Pork Producers Association, said Wednesday he applauds generally the White House’s push to improve trading conditions for America.
But he said NAFTA has been “extraordinarily important” to his members, and the original Canada-U.S. free-trade accord the first of many that helped make the U.S. a top exporter of pork after being a net importer.
“By and large, the vast majority of farmers in the U.S. want more trade deals,” he said.
Meanwhile, American food producers have repeatedly benefited from using the “Chapter 19” disputeresolution tool in NAFTA, a mechanism their government wants killed and that is another major sticking point in the talks.
Canada’s protection of dairy and poultry producers with supply-management systems is clearly a point of contention for some U.S. farmers and food processors, as well as U.S. negotiators.
Though Americans export almost $500 million worth of milk products to Canada yearly free of tariffs — three times what they import from here — farm groups and politicians have decried a Canadian system that prevents more dairy exports by imposing duties as high as 298 per cent on anything above the quota granted the U.S.
Sources have said Canadian negotiators have offered more access to the dairy market, though the U.S. Trade Representative (USTR) office told some media last week there had been no such concessions.
Regardless, Trump has tried to broaden the issue, singling out agriculture generally as his one, recurring grievance with his northern neighbour.
“Canada does not treat us right in terms of the farming and the crossing the borders,” Trump said in February.
“Canada has all sorts of trade barriers on our Agricultural products. Not acceptable!” he tweeted in June.
Yet since NAFTA was implemented in 1994, agricultural exports to Canada have ballooned more than 400 per cent to $24 billion, giving the U.S. a $2-billion farm-trade surplus last year, according to statistics from the USTR.
U.S. agriculture exports to other countries have increased, too, but the Canadian and Mexican markets have expanded in relative terms, from 19 to 28 per cent of the total, says the Chicagobased CME Group of futures markets.
And much like the highly intertwined automobile industry, agricultural goods “move across the border, are processed, packaged and exported back,” said the U.S. Department of Agriculture report. It called the deeply integrated supply chains “a testament to NAFTA’s importance for both countries.”
So how then did Canada’s alleged mistreatment of U.S. farmers come to define the current trade talks?
Though the president has called NAFTA one of the worst deals “in history,” he had little but praise for Canada when he first came to power, suggesting he was more concerned by the loss of manufacturing jobs to Mexico. The turning point may have been an April, 2017 speech in Wisconsin, when he first raised the spectre of Canada’s milk tariffs. He has since appeared fixated on the issue.
For many American farm groups, the president’s threat now to end a 30-year free-trade partnership with Canada — citing the cause of U.S. agriculture in doing so — is itself a major worry.
The National Corn Growers Association were among those who urged the White House last week to quickly strike a deal with Canada.
“NAFTA,” it said, “has been an unequivocal success story for American agriculture.”