The tan­gi­ble may not pro­vide the best per­spec­tive

The Aurora (Labrador City) - - Editorial - Thom Barker

Peo­ple tend to fo­cus on the tan­gi­ble. It’s nat­u­ral.

A great ex­am­ple is mea­sur­ing the health of the econ­omy by how stock mar­kets are fluc­tu­at­ing. This is an ex­cep­tion­ally com­pli­cated sub­ject, but the bot­tom line is stock mar­kets are a great in­di­ca­tor of how a small per­cent­age of the top cor­po­ra­tions, and an even smaller per­cent­age of the pop­u­la­tion, are do­ing fi­nan­cially – but not nec­es­sar­ily how well things are go­ing gen­er­ally.

This is the con­tin­u­ing lie of trick­le­down eco­nomics. We’re sup­posed to be­lieve that the bet­ter big cor­po­ra­tions and rich peo­ple do, the bet­ter we all do, you know, be­cause they have such a great track record of shar­ing the wealth.

But a big green ar­row point­ing up or red one point­ing down makes a great graphic on a TV or com­puter screen.

An­other great ex­am­ple is crime sta­tis­tics. It’s easy to quan­tify how many crimes are be­ing com­mit­ted and by whom (ex­cept for all the fi­nan­cial crimes be­ing com­mit­ted by the big play­ers in the stock mar­kets, which we ig­nore). It is not so easy to pin­point why peo­ple com­mit crimes. So, we keep treat­ing the symp­tom (crime) in­stead of the un­der­ly­ing dis­ease (so­cioe­co­nomic im­bal­ance).

And so it is with un­der­stand­ing the im­pact of the new North Amer­i­can Free Trade Agree­ment, now called some­thing else be­cause, well, Trump.

The big­gest tan­gi­ble noise, by far, out of this whole thing has been about dairy. Credit to dairy farm­ers, their lobby punches way above its weight class. And, of course, Trump made our dairy in­dus­try his whip­ping boy be­cause in his sim­ple (or shrewd) mind, harp­ing on tan­gi­ble 300 per cent tar­iffs, how­ever in­ac­cu­rate and mis­lead­ing that is, makes great fod­der for the end­less po­lit­i­cal ral­lies he holds in­stead of gov­ern­ing.

For bet­ter or worse, that made dairy the bar­gain­ing chip by which Canada could make con­ces­sions and Trump could win – the big­gest, great­est, most ter­rific vic­tory in the his­tory of the world, no, the his­tory of the uni­verse – even if he lost.

With the United States-Mex­i­coCanada Agree­ment, Canada gives Amer­i­can dairy ac­cess to about 3.5 per cent of our mar­ket phased in over six years.

To hear the op­po­si­tion talk about it, this means the en­tire Cana­dian dairy in­dus­try is in im­mi­nent dan­ger of to­tal col­lapse, with dras­tic con­se­quences for the over­all econ­omy – and that the gov­ern­ment com­pletely and mis­er­ably failed by mak­ing the worst deal pos­si­ble.

On pur­pose, no less, so Trudeau can run as the anti-Trump in the 2019 elec­tion.

Let’s get some per­spec­tive, shall we?

Canada’s gross do­mes­tic prod­uct (GDP) is ap­prox­i­mately $2.2 tril­lion. Dairy con­trib­utes about $20 bil­lion to that. That is a big num­ber, but as a per­cent­age of GDP, it is less than one per cent.

Fur­ther­more, the pur­ported up­side, con­sumer ac­cess to cheaper U.S. dairy, is not go­ing to have much of an im­pact on Cana­dian pock­et­books at all, ac­cord­ing to most ex­perts.

I am not, by any means, say­ing that the 12,000 dairy farms and 220,000 peo­ple they em­ploy are not im­por­tant or that one per cent of $2.2 tril­lion is in­signif­i­cant. I am also not say­ing that in­tan­gi­ble is­sues such as ‘food sovereignty’ are unim­por­tant.

I am say­ing that 3.5 per cent over six years of a mar­ket that makes up less than one per cent of our econ­omy (and only 0.1 per cent of trade be­tween Canada and the U.S.) should maybe not be what we are all fo­cussing so much at­ten­tion on, how­ever tan­gi­ble it may be and how much noise is be­ing made about it.

Be­ing all but drowned out by the dairy ca­coph­ony are some real pock­et­book is­sues such as the ex­ten­sion of patent pro­tec­tion for bi­o­log­i­cal phar­ma­ceu­ti­cal drugs from eight to 10 years and the like­li­hood of in­ter­est rate hikes.

And then there is the big pic­ture. If we are go­ing to be free traders (can we re­ally af­ford not to be?) sac­ri­fices have to be made for the greater good.

Un­for­tu­nately, we will likely never know whether the greater good was served be­cause that is an ex­cep­tion­ally com­pli­cated anal­y­sis that be­comes even less tan­gi­ble with the pas­sage of time.

The good news is, the stock mar­kets did re­ally well in light of the con­clu­sion of ne­go­ti­a­tions, so at least the rich are get­ting richer and maybe a few crumbs of cheap Amer­i­can cheese will trickle down to the rest of us.

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