The international agricultural landscape is witnessing a troubling trend towards protectionism. In past eras, protectionism was enabled through prohibitive tariffs that blocked trade. World Trade Organization (WTO) negotiations and bilateral trade agreements have largely eliminated tariffs from the protectionists’ toolbox, but, as evidenced by recent events, there are other ways in which trade can be impeded.
California’s Proposition 12 and proposed changes to Product of the U.S.A. labeling will “thicken” the border between Canada and the U.S., making trade more difficult and disrupting the integrated North American market. Some of the costs of these new measures will be carried by Canadian hog farmers and beef producers, who will both face price discounts, but they are not alone. At the other end of the supply chain, consumers will pay more at the grocery store, something no politician should want to be associated with, especially during a time of rampant food inflation.
How did we get to this point? Have you heard about the road that is paved with good intentions? The new regulatory measures did not start out as trade barriers or with the intent to punish consumers, but this is where we have landed. For example, Californians who voted for Proposition 12 likely did so because they were convinced by a few activists that modern regulations do not consider the welfare of animals being raised for meat consumption, despite the science to the contrary. The result is not improved animal welfare standards but arbitrary requirements for raising animals.
Proposition 12 is not consistent with the rest of North America, including other U.S. states, Canada, and Mexico. This means that if farmers, processors, and retailers want to supply the California market they will need to segregate products. If other states implement their own version of the regulations, as is expected, supply chains will face multiple segregations across the continent, rather than a harmonized North American market. Segregating production, processing, and retail will reduce consumer choice, increase consumer prices, and drive down farmers’ returns.
Manitoba’s hog farmers join with other pork organizations in calling on Canada to respond assertively to California’s Proposition 12. All potential measures to stop the fragmentation of the North American market must be taken, including challenges through the WTO and the Canada – United States – Mexico Agreement.
We have successfully confronted protectionist U.S. regulations in the past. Canada and Mexico successfully challenged U.S. mandatory country of origin labeling at the WTO by demonstrating that the law was discriminatory against Canadian and Mexican hog and cattle farmers. However, the fight against discriminatory labelling is not over.
Today, a ham can be labelled “Product of the U.S.A.” if the animal from which it is derived was processed in the U.S., even if it was born in Canada. This approach recognizes the consistency between Canadian and American food safety regulations and high standards for raising animals. But this is about to change. Proposed amendments to U.S. regulations would require meat that carries the label to be derived from animals exclusively born, raised, and processed in the United States. Manitoba hog farmers have long standing, mutually beneficial, relationships with our customers in Iowa, Minnesota, and other states, but these relationships won’t count if the U.S. processors and retailers demand that their suppliers adhere to the terms of the new label. Manitoba Pork holds that if this occurs, the new label will be voluntary in name only and the millions of dollars in damage caused by mandatory country of origin labelling will recur. I am concerned that the revised labeling regulations not only undermine the integrity of international trade but also mislead consumers who may mistakenly believe that imported pork is of lower quality.
The new challenges faced by meat exporters, including Manitoba hog farmers, are not isolated incidents but rather part of a broader trend of growing international protectionism in agriculture. Many countries are adopting protectionist policies that prioritize domestic industries at the expense of global trade partnerships. Canada needs to fight back.
There is a provincial election coming in Manitoba. Manitoba Pork calls upon all parties to prioritize the preservation of our international agriculture and agri-food markets when setting platform policies. Federal, provincial, and territorial agriculture Ministers are meeting in July. The issue of rising protectionism and the thickening of the Canada and U.S. border should be a top agenda item at this meeting. It is vital that governments work together to dismantle barriers and promote an inclusive agricultural trading system. By doing so, we can ensure a prosperous future for farmers, while providing consumers with the quality products they deserve.