Your Reading List

Dittmer: Opening trade wars vs. getting the lid back on

Free Market Reflections with Steve Dittmer

Cattle producers have historically fretted at being regulated and taxed by politicians in some distant capitol. I believe Canadian cattle producers agree. Down here in the States, we sometimes ponder giving up on draining the swamp and just adding lots more water. But Canadians actually get a double dose. You not only have to deal with Ottawa but because our economies are so linked and yours is a tad smaller, you can fall prey to the vagaries of Washington politics, too.

I thought of this while reading a recent editorial in the Wall Street Journal by a Canadian columnist, talking about how President Trump is living large, rent-free in the minds of Liberals in Canada almost as much as in the Democrats’ minds down here. There was a furor down here after the G7 summit because Trump actually was not afraid one bit about not being on the same page as the Europeans about running the world.

Related Articles

So what about improving the Canadian-American trading relationship? A recent story said Democrat Congressmen in so-called swing districts — districts both parties covet to get or retain power — are pressing House Speaker Nancy Pelosi for a CUSMA-USMCA vote before year’s end. Some 19 signed the letter. They are afraid they can’t win their districts if they appear to ignore business and employment by not voting the agreement down. Texas businessmen, who trade so much with Mexico, have been vocal.

These Democrats are also concerned that Republican leadership is right, and that other Democrats are so concerned with spiting the president by denying him a win that they hurt themselves more in the next election.

Speaking of Europe, Prime Minister Boris Johnson is trying to keep the opposition from fermenting and building up too much pressure by throwing them out of the tank. Wish our president had the power to shut down Congress when they got too fractious. It’s said that our administration and the U.K. have had several meetings about a trade agreement when Brexit happens. Britain has a compelling need and Trump loves trade deals, so they could have a deal pronto after October 31.

I always thought the EU was a pretty good idea as a trade agreement but stupendously stupid as a layer of government. Talk about being governed from afar. As Canadians and having various levels of political connection with Great Britain for centuries, perhaps the Irish question is easily comprehensible to you all. But the concept of the island of Ireland being two countries, with only one being part of the U.K., is mindboggling to mere Americans. Currently, both are part of the EU, but it’s likely that one will leave the EU soon. Trying to decide which Ireland you’re in and what duties should be collected and whether to have anyone in a border inspection box seems to be the big hurdle for a Brexit deal.

I haven’t heard but I’m assuming your government is also talking to Britain about access for Canadian beef. Your success in Japan with reduced tariffs under CPTPP has been remarkable (up 51 per cent through June). Such a deal would go over better with at least some British consumers, according to a story in the Wall Street Journal that quoted British folks as regarding American meat as unsafe and produced in deplorable “industrialized” agriculture. If they think all Canadian grain-fed beef jumps directly into the box from vast Canadian Prairies, I won’t tell.

Then there’s the other elephant. The hearing for Huawei’s Meng has been moved from September to January 2020. That delays any resolution involving getting her off Canadian soil. With China’s economy hurting on every side, Trump holding firm and Hong Kong in foment, President Xi must be owly. However, Canada has merely been an agent of the law, so maybe something can get done. An editorial recently in a Canadian publication castigated Prime Minister Trudeau for not doing more. Another was resolute that Canada must stand for the rule of law.

That principle, of course, is at the root of Trump’s problem with China. China’s attitude for 40 years has been that rules are for Westerners. While most of the developed countries privately support Trump’s efforts to force China to play by the rules, few have done so publicly. Instead, they have complained about the tariffs’ effects on the world economy. Canada is probably the only country that has stood up for the rule of law. While that is something for Canadians to be proud of, it doesn’t help beef, pork and canola producers now.

Canada’s governments — both national and provincial — have always been more involved in private business than in the States. Trump has provided direct support for corn and bean farmers most hit by China’s tariffs and blocks. We are free marketers in the long run but if tariffs and short-term pain is the only way to deal with flaunters like China, perhaps some short-term help is admissible.

About the author

Contributor

Steve Dittmer is the CEO of Agribusiness Freedom Foundation, a non-profit group promoting free market principles throughout the food chain. He can be reached at [email protected]

Comments

explore

Stories from our other publications