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Sunday, March 29, 2020
Connecting Our Communities

North American market offers glimmer of hope for recovery

With unusually little fanfare, the Canadian government hurriedly passed legislation approving a new trade deal with the U.S. and Mexico – popularly known by the acronym USMCA – in just one day last week, before closing down parliament.

The approval’s unspectacular nature was understandable, given the world’s preoccupation with the COVID-19 coronavirus. In fact, limiting exposure to one another to try slowing down the virus’ spread was the reason parliamentarians were leaving Ottawa so quickly in the first place.

Canada was the last of the three countries to ratify the agreement, after trade negotiators reached a deal back in 2018. Mexico was the first country to ratify the agreement last June, followed by the U.S. earlier this month. The USMCA deal couldn’t go into effect until all three countries’ governments approved it.

Normally, this kind of a milestone would be accompanied by all kinds of posturing and self-congratulatory backslapping. It’s huge. And while it’s so unfortunately overshadowed by efforts to fight the coronavirus, the disease actually underlines why the deal is vital to our countries.

When times get tough, like they are now, we look to family and neighbours for help. In the trade sense, that’s what the U.S. and Mexico are to Canada, and vice versa. All three governments claimed victory when the deal was negotiated, and they were right – trading with your neighbours is good business.

Sometimes, U.S. President Donald Trump is a lousy neighbour, especially when he intimates that Canada is a threat to U.S. security. But from a business perspective, the huge and mostly accessible market the U.S. represents to Canada and Mexico could be key to long-term recovery, as long as the Americans don’t introduce new protectionist measures to try to stimulate their economy. Hopefully the trade deal will deter such actions from happening.

Most parts of the agricultural value chain are winners in this deal. Supply-managed commodities continue wondering what’s going to happen to them, as new trade deals chip away at what’s been a guaranteed domestic market for them. The Canadian government has come through with significant support for some parts of the sector to offset potential losses.

But for commodities that totally rely on the market, the USMCA agreement is golden (if indeed anything can be considered golden at this time in our history). Greater access to 328 million Americans can’t be anything but good for our exporters. Mexicans too are fans of Canadian commodities, such as pork, beef, canola oil, maple syrup and butter. The addition of bacon or ham on pizza there makes it a “Canadian pizza.” They admire our beautiful country. And while Mexico is further away than the U.S. and not as big, it’s still a market of almost 130 million people and a lot closer than Europe or Asia.

Coming the other way, Mexico increasingly supplements our winter diets with fresh fruit. When I was there last week, in the agriculturally rich Jalisco district, harvests were teeming with raspberries, strawberries, blueberries, blackberries and avocadoes. Huge tracts of land are dedicated to winter production. We need healthy food like this at the best of times, and the worst.

Who knows when we’ll be able to really realize the advantages the USMCA trade deal affords us. But at least it’s in place now, and offers a glimmer of hope for recovery, at a time when optimism is understandably in very short supply.


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