Diversification Key to Addressing Canada-U.S. Trade Tensions

The Research Lead with Agrifood Economic Systems suggests Canada needs to reduce its reliance on the United States by finding new friends with whom to trade, starting within Canada. An Independent Agri-Food Policy Note, released by Agrifood Economic Systems, examines the impact on Canada of U.S. policy shifts, involving deportations, tax policy changes, government cuts and tariffs.

Dr. Al Mussell, research lead with Agrifood Economic Systems and a Senior Research Fellow with the Canadian Agri-food Policy Institute, observes we have a new Prime Minister who brings some valuable experience in these type of matters to the table.

Clip-Dr. Al Mussell-Agrifood Economic Systems:

The worry I think just in general is that Canada needs to find friends.We're going to have to find some way to diversify away to some degree from the United States.We're not going to stop trading with the United States.There's no way.However, it's not as reliable or friendly a trading partner as it has been so that means we need to deal with alternatives.

One of the things government can help the industry with through policy is to help facilitate those alternatives, whether it's with third countries or, as we've got a good discussion now on interprovincial trade, on some of the things that we both export and import from the United States, there may be a natural opportunity to trade that within different regions of Canada and diversify in that way.But these are all points that are up for discussion.

Dr. Mussell notes the United States is engaged in negotiating so-called deals and between now and July 8th we'll start to see what that looks and President Trump and Prime Minister Carney seem to have a good relationship which is important so there is cause for optimism.He says, at the end of the day, the United States needs food and agriculture products from Canada which is why the United States has a trade deficit in food and agriculture products with Canada so we bring something to the United States that they need.