Trade agreements

(adapted from MacRae, 2014)

The shift from primarily locally to globally distributed foods is a longstanding process, dating back some 500 years in the European world (Coleman, 2008).  Although much of the global food supply remains local (in 2004, only 8% of global agricultural and food products were exported [Anderson and Croser, 2010][1]), in the industrial world, production efficiencies have produced volumes beyond domestic food requirements.  This has helped trigger a shift in many jurisdictions away from policies of domestic self-reliance in basic foods to international movement of goods. Agriculture was originally part of the trade rules established under the General Agreement on Tariffs and Trade (GATT) but there were so many loopholes that it was effectively exempt until the 1994 Uruguay round agreement resulted in its full inclusion (what became the Agreement on Agriculture when the WTO was founded in 1995).  Subsequent multilateral agreements have GATT rules at their core and have applied many of these rules to agriculture.

The role of the trade deals in food globalization is open to some debate (Bonnanno and Constance, 2008), but at a minimum they have helped cement the shift away from the local and regional supply chains that provided basic foodstuffs up until the 1960s (Friedmann and McMichael, 1989; Hendrickson and Heffernan, 2002).

Many still question the benefits of including agriculture in international trade agreements (Rosset, 2006; Smith, 2009; Burnett and Murphy, 2013).  Some critics promote regional self-reliance and local food distribution as an alternative approach, in part because local/sustainable systems are thought to counter many of the negative effects of the industrial, global model, with enhanced regional economic development, environmental improvements, and a higher quality food supply the likely result (Bendavid-Val, 1991; MacRae et al., 2014a,b). This heightened interest in such food systems has analysts exploring the many policy obstacles and opportunities to enhance their development, including examining the role of trade agreements, both domestic and international (COG, 2007; Carter-Whitney, 2008; Friedmann, 2007).

Canada appears committed to the trade agreements in the near term, since the federal government views their benefits, including economic opportunities for many agri-food firms and consumer choice, as vastly superior to the disbenefits (those firms penalized by the deals, including those engaged primarily in local/sustainable food supply chains, socio-economic and environmental perturbations).  Canada’s participation in the World Trade Organization (WTO) Agreement on Agriculture (AoA) represented a shift from a national state-assistance approach to agricultural development - the idea that agriculture had some exceptional characteristics requiring unique state interventions - to partial adoption of a neo-liberal paradigm (Skogstad, 2008).   However, Skogstad (2008) cautions against viewing this as a paradigm change, arguing that it represents a shift, but not a rejection, of the state assistance model.  And she argues that such shifts have not exclusively been a product of the trade arrangements, influenced as well by changes in policy communities, state budgets and other domestic factors.  Given that the state assistance model has provided some protection for domestic food production, processing and distribution, the retention of that paradigm may afford some support for local/sustainable systems.

A commonly expressed view in policy and business circles is that some trade articles and disciplines do significantly limit the range of policy and programme instruments that can be applied by governments[2]. The trade articles selected for examination (in the General Agreement on Tariffs and Trade [GATT], several WTO agreements, including the AoA, and in the North American Free Trade Agreement [NAFTA]) are those commonly named by Canadian government officials as reasons not to support local procurement and domestic producers interested in transitioning to sustainable practices and marketing (Carter-Whitney, 2006).  An additional component of this discussion concerns the role of the Canadian Agreement on Internal Trade (AIT), a domestic agreement complementary to Canada’s international trade arrangements (Doern and MacDonald, 1999) and also potentially constraining to local/sustainable food systems.

This is a very preliminary textual analysis because no trade case law exists (e.g., WTO disputes) that directly relates to the research question (see discussion below), and trade texts are ambiguous and open to interpretation.  There are numerous ways to examine the texts, including policy analysis (Hajer, 2003), through the lens of economic and political globalization (Coleman et al., 2004), food regime theory (Pritchard, 2009; Otero and Pechlaner, 2010), analyzing economic risks and benefits  across food chain actors (Kerr and Gaisford, ), and trade deals as “roll back” neoliberalism, or the use of neoliberal concepts and actions to rollback certain dimensions of social progress (Peck and Tickell, 2002). The approach taken here, however, is modeled after Swinbank (2006) and Daugbjerg (2012) who both addressed related questions (animal welfare and organic food, respectively) in trade agreements.  Because the loss of instrument choices is commonly identified as the reason why the state cannot support the evolution of local/sustainable systems, I read select trade articles through a local/sustainable food system lens (see the discussion below on the parameters of such a lens) to identify how they might impact instrument choice for Canadian governments[3].

I offer an argument that Canadian governments have far more instrument latitude than is typically acknowledged, and, although there are restrictions, more substantial drivers can be put in place than currently exist without triggering trade disputes. In other words, the trade agreements are not entirely restrictive for a variety of reasons related to partial adoption of neo-liberal ideology, the challenges of finding common ground amongst so many nations that also have to attend to domestic voters, associated current disagreements over pertinent issues, and the enormously complicated nature of food supply chains and their governance.  It is beyond the scope of this paper to examine why the federal government persists in arguing that it cannot act without violating trade agreements, but current institutional and economic arrangements and ideological commitments admittedly make overt implementation of such local/sustainable support measures unlikely in the short term.  It may be important for advocates of such systems to be well informed on the trade agreements should they wish to make their case in the mid to long term.

The analysis suggested here is an intermediate line of inquiry because much of the current opposition of local/sustainable food advocates to trade regimes in Canada focuses on the need to withdraw from them, or to substantially alter their construction, and these are clearly long term agendas.  For example, the Toronto Food Policy Council (TFPC, 1994) used food security, community health and agro-ecological frameworks within Hill and MacRae’s (1995) Efficiency-Substitution-Redesign transition frame to set out how trade agreements need to be redesigned if health and sustainability are the ultimate public policy objectives.  While this is an important line of reasoning, this paper has more modest ambitions.  In the short to medium term, can local/sustainable food systems be supported within the current trade environment?  Can efficiency-stage initiatives be proposed that still comply with trade arrangements?


[1] Note that this estimate excludes intra EU trade.

[2] The author has heard this argument put forward for years in meetings with government officials and agri-food firms and organizations.

[3] Note that it is not the purpose of this study to determine the merits of local/sustainable systems, nor to identify the winners and losers should such systems be widely adopted.