Introduction
Efficiency
Substitution
Redesign
Financing the transition
Introduction
As discussed under Problems, Place, trade agreements have contributed to the continuing export focus of the Canadian food system and there is some evidence that the agreements have limited the ability of countries to set their own course with food system development. 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).
Trade articles (see Instruments, International, Trade Agreements) in the General Agreement on Tariffs and Trade [GATT], several WTO agreements, including the Agreement on Agriculture (AoA), and in the North American Free Trade Agreement (NAFTA) (soon to be updated as the USMCA once ratified by all the countries) are 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).
So, given these realities, changes to the trade deals are required if nations, whether industrial or developing, are to set their own trajectories for food system development.
Financing the transition
Many estimates have been offered, typically by economists employing very market-friendly assumptions, of the financial benefits of the trade agreements, many of which are decidedly modest for the agri-food sector even with these favourable assumptions (cf Ciuriak et al., 2017). Typically such studies overestimate the benefits and underestimate the costs, especially those related to market failure and negative socio-economic, cultural, health and environmental impacts. See Redesign for an alternative view of economic assumptions and a critique of the fundamental elements of free trade theory.
The trade deals cost governments money for the food system in two main ways. The first is that they are not always working, the most recent example being the failures of the CETA to open up new markets for Canadian agri-food products. This means, of course, that the agri-food sector also does not generate new tax revenue for provincial and federal governments. The second way is that the federal government is providing compensatory payments to the supply managed sectors, the Ontario wine industry and food processors (see the 2019 and 2021 federal budgets) to the tune of billions of dollars for negative effects of the trade deals. It's been clear for years that the federal government is prepared to sacrifice certain subsectors of the food system (eg. supply management in exchange for supporting bulk commodities like grains and oilseeds), and the agri-food sector overall in exchange for new opportunities in other parts of the economy. The related complication is that the trade deals are responsible directly and indirectly for increasing negative environmental and social impacts associated with the food system and these costs are not at this point readily calculable. As discussed elsewhere on this site, governments have failed to invest in import substitution strategies which, if implemented, can contribute to export market reductions. All this makes the net gains for the food system harder to estimate, and the costs of transition less clear, especially because we are unlikely to return to pre-WTO scenario when agricultural was effectively exempt from the trade deals.
