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Canada should look to the Alberta experience for an object lesson on why it needs to make diversification of export markets a top priority.

Being an export hostage to the U.S. has been a relative disaster for Alberta.  The province will never get a fair price for its oil exports as long as all pipeline routes lead to one country, especially when Canada's pipelines are choked and the importing country in question has its own booming shale oil production.

In September, Western Canadian Select, Alberta's heavy crude, was priced at about $34 per barrel, compared to $69 for West Texas Intermediate crude.

The factors for Canada's current wider worry about North American trade are different, but the core issue — the stranglehold the U.S. has on Canadian exports — is similar.

One cure for both Alberta and Canada on the trade front is deceptively simple — diversify your export markets.  Easier said than done.  There's that darn geography issue for one thing.  We're a long way from anywhere except the U.S.

And now there's the political threat issue — and heaven knows there have been plenty of threats from the current denizen of the White House.

But that can't stand in the way of making best efforts, from trade missions to government to government contact, to overcome the obstacles to finding a wider customer base.

Canada came out of U.S.-Mexico-Canada Agreement (USMCA) negotiations with a "could have been worse" result.

Chapter 19, the dispute resolution mechanism, survived.  That provision has served western Canada's forestry industry well over the years.

Dairy took a battering, but the sector wasn't gutted.

For Alberta, talk of oil tariffs failed to materialize and the province's Economic Development Minister Deron Bilous points out that a line was struck out that guaranteed a certain amount of oil must be shipped to the U.S. from Canada.

"When you look at some of the potential alternatives and what could have happened — potential barriers to trade or tariffs in our energy sector — that would have had monumental impacts on Alberta and all of Canada," he said Monday.

What should give Alberta, and Canada in general, more pause is the "non-market country" clause in the new agreement and its potential to limit access to a major market for Canada's exports.

The clause requires USMCA participants to give notice when they plan to negotiate free trade with a "non-market" country.  USMCA signatories can withdraw from the North American pact if they don't like their partner's proposed new deal.  Critics argue this is President Donald Trump's stick to prevent trading partners from making deals with his current foe-of-the-day, China.

The tactic isn't surprising.  Note that his title for the new deal pointedly removed the term "free trade".  'America first' isn't just about internal policy — it's about maintaining the hostage relationship of client states.

In times of a more benign American regime, the advantage of being cheek by jowl with the massive American market has been, on balance, just fine for Canada.  Trade has been pretty evenly balanced and both have prospered.

Alberta's oil price plight, however, which is based on economic factors beyond the purely political realm, should have been a warning of potential trouble.  Now the Trump regime's unpredictability is clanging the alarm bells about the inherent risks of tying the economy so exclusively to one country.

The U.S. market accounts for 75 per cent of Canada's exports.  Alberta, which exports 99 per cent of its oil to the U.S., has been frantically trying to increase its potential to get product to tidewater in order to diversify that market.

Heaving a sigh of relief because Canada got and 11th hour deal inked with the U.S. is not enough.  What is needed now is a policy to cushion the country from the kind of peril it has been experiencing in recently months.  Even if the purely political threat presented by a capricious American president diminishes with the next couple of election cycles, the larger economic issue remains.

Canada has the advantage of its existing trade relationships in Europe and Asia.  It should be stepping up its market growth in India, southeast Asia, Europe and South America.

And Canada needs to find a politically palatable way to increase pipeline reach to ports, to bolster Alberta's key contribution to the nation's economic health.

The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.


So NAFTA negotiations finally wrapped up at two minutes to midnight of Trump pulling the trigger on the gun he had placed firmly against Canada's head.  NAFTA has been replaced by the revamped United States-Mexico-Canada Agreement (USMCA), which basically resulted in Canada giving up concessions, even sovereignty some say, in almost all of the amendments to the deal, yet somehow this makes Foreign Affairs Minister Chrystia Freeland a brilliant negotiator according to the Canadian lapdog press.

Of course this isn't to say Canada had much choice in the matter when America has most of the leverage and a president more than willing to exploit it, but to pretend this is a victory for us is nothing short of patronizing propaganda.  This is the same minister who cried during the final tweaking of the Comprehensive Economic and Trade Agreement with Europe that had been teed up for her by the Harper government.  This is the same minister who thought Mexico would have our back — Trudeau dropping the traveller visa for Mexican travellers to Canada among other good faith gestures — only to have Mexico abandon us.  This is the same minister who repeatedly went to events bashing Trump, passive-aggressively denouncing him, which didn't go unnoticed.  Who knows if Trump capriciously added a couple of demands for the deal because of Freeland's unprofessional, public backbiting?

But what was one market Canada stood steadfast in protecting at all costs, despite it being the one concession Trump seemed to be dead set on getting?  Our holiest of holy cows: Canadian dairy.

As dairy farmers and their army of paid lobbyists screamed bloody murder — "A death by 1,000 cuts" said one melodramatic bad actor â€” over giving the Americans an additional tiny fraction of the overall market in Canada the cartel still gets to retain a virtual monopoly on, politicians got in line to back them up in their disgusting playacting aggrievement over the new deal.

Ontario Premier Doug Ford, a lover of chocolate milk and farmers, jumped into the fray, demanding Ottawa compensate the farmers for losing a tiny piece of their golden goose.  "And we're going to hold the federal government accountable to ensure our dairy farmers are fairly compensated," he tweeted, adding in the legislature they were being "thrown under the bus."

In reality, the vast majority of farmers (those not in poultry, eggs or dairy) and consumers are the ones repeatedly thrown under the bus in these trade agreements when Canada insists on keeping a cartel in place that price fixes what we pay for all products connected to dairy.

So why, then, does a supposed lover of farmers and free markets like Ford want to pay more for his chocolate milk?

The answer is the dairy cartel's political clout has become outsized over the past four decades it has hosed Canadians.  Former Liberal MP Martha Hall Findlay estimates the cartel spends tens of millions on an army of lobbyists (over 200 registered in Ottawa alone), advertising (recall all those blue and white cow ads we've been inundated with), and so-called studies showing how supply management supposedly doesn't rip off Canadians, but that omit mentioning the spare millions upon millions extra cash the cartel has free to spend on brainwashing Canadians on how great they are.

Findlay's comprehensive study from several years ago exhaustively scrutinized the dairy cartel and communistic (my own apt description of it) supply management.  She found the cartel can be dismantled successfully by adding a temporary tax on dairy products to buyout the cartel.  Meanwhile the overall price of those products still goes down when the free market reigns, or at least that was the case in Australia.

It's disappointing Ford kowtowed and didn't show the fortitude to stand up for the vast majority of farmers and Ontario consumers in telling the dairy cartel to drop the histrionic playacting, instead joining in.  Many Conservatives are fed up with the dairy cartel in Canada (just look at the civil war that erupted federally largely over it) and there are virtually no ridings at stake in Ontario in opposing the cartel.  Since supply management hasn't stopped the consolidation of dairy farms over the years there are virtually no rural ridings where the dairy sector is the dominant industry for constituents.  It's time Ford drop gimmicks like buck-a-beer and cutting Toronto city council, use his imagination, and do something substantive.

Written by Graeme C. Gordon

The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.