Trade talk

FROM THE CEO'S DESK

Barry Senft, CEO, Grain Farmers of Ontario

I WAS PLEASED to see great attendance at our January District Meetings this year. It showed that our farmer-members have a significant interest in our organization, the work we are doing on their behalf, and the current issues facing the agriculture industry as a whole. Amongst the regional issues discussed at these meetings there were also several common concerns that were expressed by our farmer-members no matter where in the province we were. Among them — the cost of doing business, the environment, and market prices. But perhaps the most talked about issue was international trade.

Trade talks have been making headlines in recent months — predominantly the North American Free Trade Agreement (NAFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and a free trade agreement with China. Along with these talks has come speculation as to what the impact of any final agreement will be on the agriculture industry. Policy advisors and traders have had differing opinions on whether grain market prices will go up and whether the Canadian dollar will collapse. But speculation is like pulling the loose end of a wool sweater — you don’t know how it will unravel.

This is particularly true with NAFTA if the U.S. continues a more protectionist agenda. Our economies have become so integrated no one can predict what will happen if the agreement ceases to exist or is significantly altered. What we do know is that trade is more important than ever. Our increase in production in recent years has triggered an increase in exports of not only our raw commodities but processed ingredients and end user products as well.

That’s why China is another important market for our trade representatives to focus on. China accounts for more than half of our soybean exports. We need to be assured of secure access to this market — the type of security that can be found in a free trade agreement which focuses on advancing our economic opportunities.

Despite delays in reaching an agreement, CPTPP was finalized in late January and the official signing is expected in March. The deal is amongst 11 Pacific Rim countries — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. Canada is expecting a $4.2 billion boost to its GDP due to preferential access to the other 10 countries. The agri-food sector in particular stands to benefit from the fast-growing emerging nations involved in the agreement.

Grain Farmers of Ontario supports the maintenance and enhancement of access to foreign markets that new trade agreements can provide. However, negotiations should not limit one sector’s gains in order to save another sector. The signing of an agreement puts to end the speculation of what might be contained within a trade deal, but the full impact of new policies — whether positive or negative — won’t be understood until they are put into practice. •

About Barry Senft 69 Articles
CEO, Grain Farmers of Ontario