ONTARIO GRAIN FARMER 8 COVER STORY continued from page 7 U.S. TRADE TIES At the same time, Canada continues pushing for greater trade diversification. Ottawa has set ambitious goals to double non-U.S. exports by 2035, with agriculture expected to carry much of that growth. But panelists repeatedly cautioned that diversification cannot mean weakening ties with the United States. “If we achieve the goal of doubling our nonU.S. exports by shrinking our exports to the United States, that is not a growing economy for Canada,” said Meredith Lilly, a professor and Simon Reisman Chair in International Economic Policy at Carleton University’s Norman Paterson School of International Affairs. “That is a shrinking pie.” Dawson agreed, warning the language around diversification is sometimes misunderstood. “Diversification sounds like reducing our relationship with the United States,” she said. “I think it has to be a U.S.- plus diversification, so that we don’t cut off our nose to spite our face.” Trade strategy advisor Jeff Mahon added that agriculture is already one of Canada’s most internationally exposed industries. “Canadian agriculture is already pretty diversified,” he said. “Telling Canadian agriculture it needs to diversify further is like telling a cayenne pepper it needs to be spicy.” The challenge is not whether Canadian agriculture exports broadly, but whether those relationships are stable enough to support long-term investment and growth. China is one of the clearest examples of that tension. The Prairie canola sector has repeatedly found itself caught in broader geopolitical disputes between Canada and China. Dawson expressed direct sympathy for producers facing those risks. “My heart goes out to the canola sector,” she said. “You’re really between the devil and the deep blue sea, with the United States and China… you don’t want to be the political wedge in the middle in a conflict that is way, way out of your control.” Lilly noted canola has already experienced multiple severe disruptions over the past decade. “This is at least the third terrible time that canola has been through,” she said. Mahon argued those experiences illustrate a broader reality agriculture has faced for years before other sectors fully recognized it. “The rest of the global economy is finally getting to know what it felt like to be agriculture,” he said, “facing uncertainty, nontariff barriers and the weaponization of trade.” Agricultural products are especially vulnerable because commodities are relatively substitutable. If one exporter is disrupted, buyers can often source similar crops elsewhere. Mahon pointed to how countries can impose restrictions under the guise of health or safety concerns while maintaining plausible deniability. “You can shut down barley in Australia, and then the Canadians and Americans or Russians sell it again,” he said. That creates enormous uncertainty for farmers whose livelihoods depend on export continuity. Political disputes thousands of kilometres away can quickly influence local basis and cash bids. Major importers can weaponize agriculture during unrelated diplomatic conflicts. Diversification across crops, buyers, and end uses increasingly functions less as a growth strategy and more as risk management. MEXICO, A MARKET TO EXPLORE Within North America, panelists also highlighted Mexico as an underdeveloped opportunity. Despite sharing CUSMA, Canada’s trade relationship with Mexico remains relatively modest. Laing noted that only about 3.6 per cent of Canada’s total trade involves Mexico. Lilly called that a missed opportunity. “Mexico is a hugely under-explored market,” she said, arguing the country’s growing middle class and expanding economy offer long-term potential for Canadian agriculture and agri-food exports. Still, the United States remains the anchor of Canada’s economy and agricultural system. Ontario grain is deeply embedded in U.S. feed, ethanol, and food-processing supply chains. Any effort to weaken that relationship in pursuit of diversification would ultimately shrink opportunities for Canadian farmers. That is why the upcoming CUSMA review looms so large. The agreement’s six-year review process carries a statutory deadline of July 1. Lilly explained that if all three countries agree to continue the agreement, CUSMA effectively gets another 16-year runway. If not, the deal enters a prolonged period of annual reviews through 2036. That scenario has been informally dubbed “Zombie CUSMA.” (L to R): Jeff Mahon, trade strategy advisor, Greg MacDonald, Canada's agriculture counsellor to the EU, and Edwini Kessie, WTO agriculture director discuss trade at the Canadian Crops Convention. Photo: Kristy Nudds
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