The International Politics of Agricultural Trade: Canadian-American Relations in a Global Agricultural Context

By Theodore H. Cohn | Go to book overview
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CONCLUSIONS

Some preliminary conclusions can now be drawn regarding the independent and dependent variables. This chapter has clearly demonstrated that conflict is more likely in Canadian-American relations when large surpluses overhang the market. However, it is during these periods that the United States and Canada--in view of their interdependence--tend to seek new forms of co-operation to deal with (multilateral as well as bilateral) competition and conflict. For example, the two countries co-ordinated their stockholding policies in the 1950s and their production cutback programs in the late 1960s and 1970s. Furthermore, in the 1980s surplus period they concluded a bilateral free trade agreement with agricultural provisions, and they jointly pressured for greater coverage of agricultural trade issues in the Uruguay Round of GATT negotiations.

During the 1970s shortage period, there was generally less conflict between the two countries in agricultural trade. This relative harmony was especially notable since the Nixon import surcharge and Canada's Third Option policy contributed to fairly high levels of bilateral conflict in the 1970s in other areas. However, some fundamental economic changes were occurring at this time that eventually led to serious problems in agricultural trade relations. The growing U.S. balance of payments deficit contributed to more aggressive American trade policies, and the United States began to compete for Canada's Communist markets. During this period, the European Community's agricultural production and exports were also increasing, and the stage was set for a major confrontation between the EC and the United States. When surpluses re-emerged, the underlying sources of tension in the 1970s became full-blown conflicts in the 1980s.

This chapter also provides some preliminary findings regarding the strategies each country uses to achieve its agricultural export objectives. In view of its greater economic size and capabilities, the United States was often more inclined than Canada to adopt unilateral strategies, extending from the PL 480 program in the 1950s to the Export Enhancement Program in the 1980s. In Chapters 4 to 6, the issue of export strategies is examined in greater detail.

Finally, some preliminary statements can be offered regarding the ability of each country to achieve its agricultural export objectives. The nature of the agricultural trade regime, with the American price supports often serving as guidelines to competitors, at times permitted Canada (and other exporters) to undercut U.S. price levels. However, when the United States was determined to promote its agricultural exports, it could rely upon its greater economic size and capabilities. American agricultural trade policies in the 1950s and 1960s

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