Rockwood, ON Canada needs a rapid pivot to the realities of a shifting global trade environment with disruptive industrial policy initiatives of large economies, in which Canada’s agri-food sector could be increasingly targeted.
An Independent Agri-Food Policy Note released today by Agri-Food Economic Systems argues that the anti-dumping investigation undertaken by China against Canadian canola is a clear indicator of a changing international trade policy environment, where Canadian agri-food is exposed.
To help understand the context for China’s anti-dumping action on Canadian canola, the policy note reviews geo-political developments, the essential components of the global rules-based trading system, and identifies where gaps have opened up- and what this means for Canadian agri-food.
“Elements of geo-politics have moved beyond the limits envisioned under the rules-based trade system”, says Ted Bilyea, Agri-Food Economic Systems Research Associate and co-author of the paper. “It has resulted in industrial policies by global powers that leave Canada exposed under the rules-based trade system, and agri-food has become a favored target in trade retaliation. It is likely that Canada will face more trade actions against agri-food in the future- and in relation to other matters, that really have nothing to do with agri-food.”
The policy note discusses how the global trading environment has evolved and pushed some markets and policy issues outside of the rules-based framework, even as other aspects of rules-based trade are operating effectively- and have indeed been critical for Canadian agri-food. At the same time, despite current low price levels in North American agri-food markets, food has become globally scarce and is increasingly viewed in strategic and security terms internationally. Canada is among few net agri-food exporters operating at scale.
“Canada needs a rapid pivot to anticipate a future of adverse effects from large countries’ industrial policies, and a less friendly international trade environment- not readily contained by the rules-based system. But Canada still needs the rules-based system that shields smaller economies from geo-political intimidation”, says Al Mussell, Agri-Food Economic Systems Research Lead and co-author of the paper. “We need a mixed strategy- with our own industrial policies, new trade alliances, but also supporting the
system of trade rules we have now. Canadian agri-food policy needs to align with this- it represents a big shift”.
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