Canadian agrifood exporters in a tough game

Ottawa needs to monitor foreign takeovers in the agrifood system.

Ottawa—Canadian agrifood exporters need increased protection from an increasingly unkind trade environment, says Al Mussell, Research Director of the Canadian Agri-Food Policy Institute (CAPI).

Canada also needs to take much more critical examinations of any proposed foreign investment in or takeover of domestic agrifood company or assets, he told the Commons agriculture committee.

The federal government should also elevate the status of the sector in its foreign policy and make sure it is able to fully support our allies in any war situation, he said.

“As an open economy and a major agrifood exporter, Canada can be vulnerable in an international trade environment that has grown increasingly unkind,” he said. “Redoubling of market access enforcement under trade agreements is necessary, but Canada must go further.”

Canadian exporters need greater protection from the abusive effects of frivolous and predatory actions of other countries. “Increased export market advocacy, indemnification for sudden losses of market access and increased investment in processing to support value-added exports and greater import replacements are strategies Canada should advance.”

Equally important is making sure the government is able to recognize the risk that foreign investments in Canadian agrifood supply chains “could be extensions of the political and mercantilist agendas of others and not aligned with Canada’s interests.”

To achieve that level of awareness, Canada should institute formal reviews of foreign investments and acquisitions of Canadian agrifood assets if there are concerns about the impact of such deals, he said.

“As our rules-based system of international trade has eroded and countries target farm and food products as an instrument of retaliation and political agendas, Canadian companies are increasingly exposed.

“When companies invoke shifting or arbitrary food regulation and technical standards, such as coronavirus sampling on food packaging, as a means of disguised protection, the first victim is the exporting company.”

These kinds of actions expose Canadian companies are vulnerable to serious financial as has been seen with canola and pork exports, Mussell said.

“Conversely, we need to concern ourselves with the prospect of predatory foreign acquisitions of Canadian agrifood assets, stemming from the financial injury from frivolous intentional trade barriers and otherwise.”

Agriculture Canada has developed new capacity to monitor and analyze supply chains through a retail and consumer task team that could be further expanded.

“We have learned through the COVID-19 pandemic that agrifood supply chains can be long, complex, and subject to shifting bottlenecks,” he said. “This presents the need for expanded conceptual frameworks and much broader data collection.

At the same, there is a need for a more agile regulatory system and new investment in automation and digitization in supply chains to improve efficiency and competitiveness,” Mussell said. “These are already known from the Barton report, the economic strategy table and previous research, and simply need to be fully enacted.”