Canadians involved in trade with the United States may have felt a rather chill wind coming out of the south last week.
That wind of course was from the mouth of U.S. president Donald Trump who is again rattling his swords in regards to trade, with an eye to reopening agreements including the North American Free Trade Agreement.
Last week Trump gave a speech in Wisconsin where he railed against trade deals, calling NAFTA a “disaster”, and given the dairy sector in that U.S. state pointed specifically to the “unfair” rules he deems exist in the trade deal.
“Very, very unfair. It’s another typical one-sided deal against the United States and it’s not going to be happening for long,” Trump said. “We’re going to call Canada and we’re going to say, ‘what happened?’”
The same speech was a kick-off to Trump’s efforts to ‘Buy American’, which at least initially will be an effort based on following existing rules more closely, rather than creating harsher guidelines.
The situation is not exactly unexpected.
When John Gormley, the long-time radio talk show host, and former Member of Parliament, spoke in Yorkton earlier this year, he noted NAFTA was a target for the U.S. president.
“Mr. Trump says he wants to tweak NAFTA in regards to Canada,” said Gormley during his presentation, adding that there is no way of knowing what the U.S. president means with the word tweak.
Trump has also said he wants to see more “drastic” changes to NAFTA in terms of trade with Mexico, said Gormley.
But, Canada may have moved up the list in Trump’s mind, or at least in recent rhetoric.
John DePutter, founder and President of DePutter Publishing Ltd., speaking at a Farm Credit Canada Ag Knowledge Exchange event held in Yorkton earlier this year also hinted Trump could cause waves in terms of trade.
In crystal balling the commodity prices DePutter said there are unknown influences, one being American president Donald Trump.
“We’re talking about a loose cannon, a wild card,” he said.
DePutter said he has always termed unexpected shocks in terms of price ‘black swans’ adding Trump qualifies as one of those.
While noting he is generally on side with Republican ideals, DePutter said he is not sure Trump was a good choice as leader, He pointed to a general trend away from the concept of free trade.
“There’s an anti-globalization trend going on too, which is sad. Agriculture needs exports,” he said. “The U.S. and Canada both benefit from an open grain trade.”
Gormley too hinted at the uncertainty Trump creates.
“The man takes unorthodox to levels most of us can’t understand,” he said during his Yorkton presentation.
“… He turns every single assumption on its head. From beginning to end it will be a presidency without precedent. There is no playbook for him, no template for this.”
The most recent trade remarks have to be unsettling for Canadian business as there is a distinct possibility American business will look internally to appease the Trump administration’s posturing.
That is worrisome given the importance of U.S. trade for Canadian agriculture.
“Seventy-five per cent of Canadian exports go to the United States,” said Gormley, adding U.S. trade with Canada is second only to their trade with China.
Specific to Saskatchewan 60 per cent of the province’s exports head south, with an annual value of about $20 billion, and that includes about $2 billion in canola seed, oil and meal, with the U.S. also a key market for wheat, oats and several other farm crops.
Anything which works to destabilize that trade, in this case the inward-looking Trump is not good news on this side of the border.
Calvin Daniels is Editor with Yorkton This Week.