Not to take anything away from the original Christmas miracle, but the one that happened earlier this week in Mexico City when Canada, Mexico and the U.S. signed off on details of the new free trade deal, is truly a wonder.
In our current political era – when agreement on anything is harder than ever, made even more difficult by the impeachment proceedings against U.S. President Donald Trump – who would have thought this trade deal would emerge as a beacon of collaboration?
Now, that may be too starry-eyed of an interpretation. It may be simply a matter of Trump trying to divert attention from his troubled domestic situation, to convince the public that despite what is being said or even proven about him, he can still get the job done.
And he will certainly position the free trade agreement renegotiation, which was part of his campaign in 2016, as a tribute to his administration, even though the true heroes are the negotiating team members – particularly, from Canada, Deputy Prime Minister Chrystia Freeland.
But regardless of the intent, for many farmers, it’s welcome news with the holiday season upon us and the end of a very difficult year in sight. Finally, those who grow export-dependent commodities in particular, can exhale about this aspect of trade.
Agriculture is not a centrepiece in the renegotiated deal. However, the thought of farm products no longer changing hands in North America as they have done traditionally put even more stress on farmers’ plates. Trade has been a mess globally since Trump started instituting his protectionist policies. This deal may be a slight reprieve overall.
Still, huge issues must be considered. For example, dairy.
At the start of the deal, more than two years ago, U.S. negotiators were clear that they wanted Canada to open its borders and accept more American dairy products. The U.S., like many countries that don’t manage their dairy supply like we do, overproduces milk and sees Canada as a handy place to sell it.
For decades, Canada has resisted open borders. The dairy lobby convinced Ottawa that relaxed regulations would decimate the dairy sector here and not be in Canadians’ best interests.
Nonetheless, Canada has conceded – and not just to U.S. demands for more access, but to similar demands from Europe as well and as a result of the Comprehensive Economic and Trade Agreement (CETA). There are also concerns from the Pacific Rim courtesy of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). Through it all, Canadian dairy was in the bull’s-eye.
To help the sector, in August, federal agriculture and agri-food minister Marie-Claude Bibeau announced a whopping $1.75 billion compensation fund would be set up to help dairy farmers.
“This will allow everyone to make the best decisions based on new market realities and their respective situations,”she said.
It’s an eight-year program and amounts to about $28,000 in the first year for the average dairy farmer with an 80-cow herd.
Now it’s decision time. Recent research shows that marketing is farmers’ number one concern – not just dairy farmers, but all farmers. And no wonder, given the culture we’re in. How much of that compensation money will dairy farmers need just to respond to what the minister called “new market realities” and convince consumers here to buy Canadian, and retailers to sell it?
So while some farmers are applauding the new trade deal with the U.S. and Mexico, for others, it raises more questions than it answers. Overall though, I suspect it will be seen as a relief.