Freeland’s victory lap, Trump’s win
Canada’s Foreign Affairs Minister Chrystia Freeland came down east this week to take a bit of a victory lap for cutting a new trade deal that the petulant pup in the White House actually gets to chalk up as a win.
There were Freeland sightings in Nova Scotia at Pictou County’s expanding Michelin Tire plant and in Hackett’s Cove, outside Halifax where home-grown success story Nautel is located. Both businesses have significant U.S. exports.
Ms. Freeland’s 90-minute drive between those two stops would have taken her within view of several dairy farms she sold out to get a deal that Donald Trump will tout as a tangible expression of his undying love for the American farmer.
Yes, Canada needed an agreement with its biggest trade partner, but it is galling that to placate the Orange Ego another wound was inflicted on rural Canada and another piece of national sovereignty was surrendered.
The economic realists tell us the glass is half full; that without relatively unfettered access to the U.S. market, great chunks of the Canadian economy would grind to a frozen halt; that giving the American dairy industry access to about four per cent of the Canadian market was a reasonable price to pay; and that Ottawa will find a way to compensate Canadian dairy farmers for their losses.
First, let’s force that four per cent – or 3.6 per cent to be precise – of Canada’s dairy sector into a context that makes it real. It is equal to 100 per cent of the milk produced by Nova Scotia’s 215 dairy farms plus all of Prince Edward Island’s 165 dairy farms.
It’s also just the latest insult to one of the country’s most stable and successful farm sectors. Various international trade deals have collectively opened 18 per cent of Canada’s dairy market to foreign competition.
And what’s wrong with that, ask the free trade purists and myopic consumer advocates. Not a thing, so long as you’re also willing to sacrifice food security and don’t give a whit about the economic viability of rural Canada.
Dairy farms are an economic mainstay in countless small communities across the country. Canadian dairy farms are highly efficient, mostly family-owned and operated businesses that return more than 80 per cent of their gross earnings to their local, rural economies.
Supply management, much maligned by those who worship at the altar of unrestrained market forces, ensures price stability and a fair return for Canadian milk producers who, on average, milk fewer than 100 cows.
Contrast Canada’s stable milk market and family dairy farms to the American experience, where a third of the milk is produced by about one per cent of the farms – factory farms milking more than 2,000 cows.
A full third of American dairy farms – the family farms that Willie Nelson’s been trying to save with Farm Aid concerts since 1985 – teeter perpetually on the brink of financial ruin and produce a little more than one per cent of the milk for a land awash in the stuff.
Dairy farms are spread across Canada, roughly in proportion to the population, so the milk Canadians drink almost certainly came from a farm nearby. Two U.S. states – Wisconsin and California – supply more than a third of the dairy products demanded by all 50 states.
Almost lost in the national sigh of relief when we got a trade deal with Trump, was Canada’s surrender to U.S. demands that exports of milk protein concentrates, skim milk powder and infant formula from Canada will be limited, worldwide. Canada ceded to the U.S. its right to compete internationally in those products.
Sure, it was nice to have Ms. Freeland in the neighbourhood for a few days. And yes, we are thankful for the Canadian jobs salvaged – provided the agreement is ratified by Parliament and Congress – by the deal Trump calls USMCA (United States-mexico-canadaAgreement) apparently forcing the rest of us to call it that too.
But, if you value things like a viable rural economy, the family farm, and a secure supply of milk for the kids located just a few kilometres away, understand that this deal chips away at each of those fragile assets.