Huffing, puffing, pounding his chest and waving the flag, International Trade Minister David Emerson has said Canada will stop being a "Boy Scout" when it comes to international trade. Last week, he showed his moxy by challenging the U.S. to defend its obscene trade-distorting farm subsidies at the World Trade Organization. Agriculturally, Canada and every other exporting nation have been pushed around by the United States for decades. Countries have responded to American trade abuse by trying to give offsetting subsidies to their farmers. But who among us can compete against the bottomless U.S. treasury, the one that knows no limits, the one that somehow just goes on and on? Nobody! And negotiations just don't seem to work. Think back to last year, to the collapse of what was called the Doha round of international trade talks. They fell apart because the Americans and the Europeans couldn't agree on how much farm subsidies should be cut, or how much they'd already cut. With no one — including Canada — rushing back to the negotiating table, Emerson and the crew in Ottawa decided to flex their muscles independently. This is the big league. Going to the World Trade Organization is like trying to get someone in trouble by ratting on them to the principal, not just the teacher. For trade matters, the World Trade Organization is the ultimate arbiter, and countries it finds to be in the wrong are supposed to adhere to its directives. So, if it looks into how much the U.S. is subsidizing its farmers and orders a change, the Americans are supposed to abide. But what happens if the U.S. loses, but ignores the ruling? It might. Farm subsidies are a part of American culture. Canada estimates the U.S. has doled out $19 billion a year in five of the last eight years to its farmers — $9 billion alone has gone to corn producers. Imagine Americans' reaction to a foreign country trying to have influence over that kind of money. A friend of mine who is a U.S. farm journalist is indignant about Americans' right to protect its farmers. He is convinced other nations, particularly the European Union, started the subsidy problem and put the U.S. in a position where it had to institute huge payouts to its farmers. We acted like Americans when we started trying to compete with their subsidies. Now, we are going to act like Americans again and immerse ourselves in litigation. Lawyers in Ottawa are rubbing their hands together. This will cost Canada millions of dollars. It's a frustrating situation. You'd like to think a diplomatic solution could be reached. But Ottawa believes it has to hurry and get this case heard. With the Iraqi war having cost so much, there's some thought the U.S. Senate is looking for places to cut. An anti-subsidy ruling on the international stage might give them some ammunition. But whatever the internal political situation may be in the U.S., Ottawa believes it has to do something for farmers. There's optimism about producers starting to make money this year on corn and soybeans, because of the competition for their crops from ethanol production. But that won't fix the underlying problem of U.S. farm subsidies. The first step in the World Trade Organization grievance is a consultation with the United States. Some observers think other countries may join in. Canada will need their support. But it will also need to remember the U.S. is our biggest trading partner, and doesn't take kindly to losing or being embarrassed. The subsidy matter is pressing to farmers; so is access to U.S. markets. Farmers don't like American subsidies, but neither would they like even more border challenges than they have now. Owen Roberts teaches agricultural communications at the University of Guelph.
About The Author
Owen Roberts is a faculty member in the Agricultural Leadership, Education and Communications program at the University of Illinois. As an agricultural journalist, he is the past president of the International Federation of Agricultural Journalists and a lifetime achievement award recipient from the Canadian Farm Writers' Federation. His programs and research papers have been recognized nationally and internationally through awards from the Journal of Applied Communications, the National Agri-Marketing Association, the Association for Communications Excellence, and others.