Saskatoon

'Saskatchewan has a lot potentially to lose' in NAFTA talks, says prof.

Saskatchewan's exporters will be watching North American Free Trade Agreement negotiations closely when the document is reopened next month.

Farm groups, industry watching negotiations closely

According to Ian Mosby, rather than subsidizing big farming with more than $6 billion every year, the federal and provincial governments should encourage more small, local farms. (Tory Gillis/CBC)

Saskatchewan's exporters will be watching North American Free Trade Agreement negotiations closely when the agreement is reopened next month.

American trade negotiators said Tuesday they want to send more grain, wine and dairy products to their neighbours. 

Negotiating objectives released the same day say the goal is to make regulations more uniform and break down unnecessary barriers along with "other unjustified measures that unfairly limit access to markets for U.S. goods."

They've also made it clear they want to ditch the dispute mechanism in Chapter 19 of NAFTA, which ensures duties collected unfairly are returned.

We are Canada's largest wheat producer, so if they remove that section of the NAFTA agreement that could really hurt Saskatchewan's economy.-  Greg  Poelzer , University of Saskatchewan political studies professor 

University of Saskatchewan political studies professor Greg Poelzer said Chapter 19 has helped Canada resolve disputes over our lumber, beef, pork and wheat exports.

"This is a big one," said Poelzer. "Saskatchewan has a lot potentially to lose."

Poelzer said producers in Saskatchewan who export goods to the United States have relied on the trade dispute resolution mechanism to get large amounts of money back, collected by Americans unfairly through duties.

"We are Canada's largest wheat producer, so if they remove that section of the NAFTA that could really hurt Saskatchewan's economy," he said.

"These are going to be a tough set of negotiations especially from a Saskatchewan perspective," said University of Saskatchewan professor Greg Poelzer. (CBC)

President of the Agricultural Producers Association of Saskatchewan Todd Lewis said Canadian farmers do want to sell more grain south of the border, but they have some concerns.

Currently, the U.S. and Canada grow different varieties of grain, and use different grading systems. Lewis said integrating those systems could take years.

"It's simple to say 'wheat is wheat' but, I mean, it's different varieties, different classes, different grades, different protein levels. You know there's a lot of science behind all the different varieties that we grow," he said.

Lewis argued that if Americans get more access in Canada, the same freedom should apply to Canadian farmers sending grain south.

'Canada is not a solution to the U.S.'s oversupply problem'

Egg and dairy producers in Saskatchewan, on the other hand, have said they're pleased with Canada's current supply-management system and don't want to see things change.

"Dairy wasn't part of the first NAFTA," said Joy Smith, policy manager at SaskMilk.

She said no tariffs or policies have changed since the original agreement was signed, and noted Americans send far more dairy products north than Canadians send south. 

"Canada is not a solution to the U.S.'s oversupply problem," said Smith, adding that American trade goals in agriculture remain somewhat vague. "Once things start in mid-August, we'll probably start to see more of the details come out."

Ditch 'useless legislation': cattle producers 

Cattle producers said they are in favour of the same things as their American counterparts: reducing regulatory burdens, maintaining duty-free access to agricultural goods, reducing non-tariff trade barriers, and getting more clarification on phytosanitary rules.
Saskatchewan Cattlemen's Association chairman Ryan Beierbach said livestock producers have fared well under NAFTA, but he would like to see more red tape eliminated. (Submitted by Saskatchewan Cattlemen's Association)

But after fighting American country-of-origin labelling (COOL) rules for years, Canadian ranchers said they are leery of protectionist lobby groups south of the border.

"The way it's written leaves it pretty open to interpretation on where they're going to go," said Ryan Beierbach, chair of the Saskatchewan Cattlemen's Association.

He said measures imposed since Canada's bovine spongiform encephalopathy (BSE) outbreak in 2003 call for live Canadian feeder cattle to be unloaded, inspected by a veterinarian and branded at the border. BSE has since been diagnosed in the United States.

Canadian ranchers said forcing cattle shipments to unload at the border is costly, and causes stress to the animals.

"Basically it's useless legislation that's kind of been left in place just because a couple of special interest groups in the U.S. have pushed to keep it there," Beierbach said.

He said Canadian veterinarians and the Canadian Food Inspection Agency already inspect and sign off on each shipment of cattle and beef heading south, and a new NAFTA should streamline that process.

Hope for the best, prepare for the worst

According to Poelzer, considering the rhetoric by U.S. President Donald Trump on the campaign trail, the demands made by American negotiators are "fairly modest."

Canada still buys more services dollar-wise from the U.S. than it sells to the U.S., so he said the country is in a good negotiating position.

"We're not the big target in the U.S. crosshairs," Poelzer said. American trade negotiators want to roll sections on environmental protection and labour laws into the body of an updated NAFTA, something Poelzer called an attempt to level out the playing field with Mexico.

"It's one of those things where you hope for the best, prepare for the worst," Poelzer said.