The U.S.-China trade deal is bad for Canada – and we can’t do a thing about it


Barrie McKenna, Opinion, Special to The Globe and Mail (Canada)

January 12, 2020


It is the burden of smallish countries such as Canada that they’re forever at the mercy of larger powers.


Take the “Phase 1” trade deal slated to be signed this week in Washington by the United States and China, the world’s two largest economies.


This agreement is bad news for Canada, and we can’t do a thing about it.


It’s also ominous for global trade more broadly.


The details of the pending agreement are still murky. But U.S. officials say Beijing has agreed to boost purchases of U.S. goods and services by as much as US$200-billion within two years, including tens of billions worth of farm products. U.S. President Donald Trump has called it a “very large and comprehensive” deal.


Despite Mr. Trump’s bravado, it’s unclear the two countries can live up to their ambitious commitments. And experts say the deal may well violate World Trade Organization rules.


“Despite the spin from the U.S. administration, there’s lots to suggest that the Phase 1 deal is more of a truce than a meaningful settlement of anything,” says trade lawyer Matthew Kronby, partner at Borden Ladner Gervais in Toronto.


Here’s the problem: Whatever China commits to buying from the U.S. will inevitably come at the expense of other exporting countries. In farm products, Canada is among the countries most at risk of losing market share, along with Australia, New Zealand, Brazil and Argentina.


For Canada, some of the exports that could suffer include frozen pork, beef, soybeans...