April 12, 2003
U.S. Anger Clouds Rural Economy
Any hope Canada has for a quick resolution of trade disputes with the United States is gone. Canada’s stance on the Iraq war, coupled with the intemperate anti-American remarks of senior government officials, has soured the hope that the Americans will “listen to reason.”
You can forget the traditional rule that trade disputes not be linked to other disagreements. From the Canadian Wheat Board to softwood lumber to country-of-origin labeling for meat products, a host of negotiations will be conditioned by Canada’s foreign policy. Unfortunately, the vulnerable and trade-dependent rural economies of western Canada will be the first casualties.
Americans are dying in a war that the U.S. sees as vital to its national interest. For this reason alone, the United States will reward its allies and punish those who were not with them. Some American official will calculate how many American lives would have been saved had other countries joined the war effort. That’s the first step.
Secondly, we will probably see a greatly expanded “country-of-origin” labeling program for all products sold in the U.S. The Americans have clearly stated that other countries are either with them or against them. If regulations tighten up, Canada’s exposure will be extreme.
The next shoe to drop will be American consumer boycotts, easily organized through the Internet. Look at beef, one of the bright spots in the rural economy. Over 70% of Canada’s beef products are exported to the United States, but that represents just 5% of U.S. beef consumption, a miniscule proportion easily made up from other sources. Australia, Canada’s main competitor in the American market, is a willing member of the coalition forces. Whose beef do you think the U.S. consumer will choose to buy?
The damage has already started. A rancher friend recently relayed a story about a sale lot of Manitoba cattle on offer in the U.S. Citing the Canadian stance on the Iraq war, packers refused to buy. The media reports that Peak-of-the Market vegetables sit unsold in Manitoba warehouses. An aggressive, grassroots campaign to “buy American” has great appeal for war-affected families.
If this weren’t so serious, our government’s attempt to point out how much the U.S. depends on Canada would be laughable. The U.S. may need some of our goods like newsprint and oil, but would we ever refuse to sell those commodities to the U.S.? Not likely. On the other hand, the United States has a robust internal economy where trade and exports are a much smaller percentage of their GDP than Canada’s. We are the most trade-dependent nation on earth and they are one of the least.
They buy cars, auto parts and manufactured goods from Canada because they are cheaper, not because they can’t do it themselves. I wonder how many quiet phone calls have already been placed to the heads of the Big Three auto companies to ask if they really need to have all those plants in Canada.
The nationalists in Ottawa assert that Canada has an independent foreign policy, and of course we are free to say what we like. But never think that these actions have no consequences. Like all great calamities, this is one that Canada has brought on itself. Rural Western Canada is paying the price.
Robert Sopuck, Senior Fellow
is a modern environmentalst whose interests include solving environmental problems without reducing human freedom. He is a natural resource policy consultant with a special interest in rural issues who lives and works at Lake Audy, Manitoba. He received his B.Sc. from the University of Manitoba and Masters from Cornell University. His first career was in fisheries management. He later coordinated the sustainable development initiative for the province of Manitoba and was on the Canadian delegation to the Earth Summit in Rio de Janeiro in 1992. He was Manitoba's observer on the Board of the International Institute for Sustainable Development. In October 2007 he was appointed to the federal government's National Round Table on the Environment and Economy.