Canadian-American Agricultural Trade Relations: A Brief History

Abstract

Introduction Although in recent years some specialized work has been done on the agricultural trade relationship between Canada and the United States, relatively little historical work has been devoted to this subject. This is true despite a voluminous literature--most of which, admittedly, has been written from a Canadian point-of-view--on the history of Canadian-American relations generally. But, here again, the subject of agricultural trade rarely appears, and then usually only to illustrate a more general problem or conflict. There are a number of likely reasons for this, most prominently the fact that agricultural trade has been on a long-term decline relative to other forms of commodity trade within the world's largest bilateral trading and investment relationship; that is, Canada-U.S. trade has been dominated by manufactured goods for most of the postwar era, leaving agriculture a negligible position. Nonetheless, understanding the history of Canadian-American agricultural trade relations remains important for a number of reasons. First, economic disputes between the two countries have shaped the very nature of the bilateral relationship and, until the 1960s, agricultural trade, along with the fisheries, consistently took top prize as the subject matter of these disputes. Since the early 1960s, disputes over automobiles (rules of origin), culture (Canadian content regulations), and softwood lumber have joined, but not supplanted, these sectoral problem areas, as the recent disputes over salmon and wheat testify. Second, as Table 1 illustrates, bilateral agricultural exports have been more important than the percentage of total trade between the two countries would appear to indicate. An $18 billion annual trade in agricultural commodities (1996) is sizeable by almost any absolute measure, and the historical importance of this trade was proportionately much greater. During the postwar era, the United States has become Canada's main agricultural trading partner, in both exports and imports, while Canada has remained one of the United States' main partners--since the 1970s, the second largest exporter (after the European Community)to the U.S., and among the top four importers of American agricultural goods. Moreover, because of the very regional nature of this trade, it has had, and continues to have, a disproportionate impact on the lives of Canadians and Americans in regions of both countries including the fruit and vegetable growers of California, the cattle ranchers of Alberta, and the durum wheat growers of Saskatchewan, to cite only a few examples (Cohn 1990, 13-14). [Part 1 of 2] Table 1: Agricultural Exports as a Percentage of Total Bilateral Trade in the United States and Canada, 1992-1996 (million of dollars) CANADA 1992 1993 1994 1. Agricultural Exports to the U.S. (1) 6,942 7,367 8,104 2. Total Exports to the U.S. 123,377 149,006 180,837 3. % of Ag. Exports to Total Exports 5.63% 4.94% 4.48% 4. Agricultural Exports to the World 30,679 32,789 37,749 5. Total Exports to the World 163,467 190,383 227,892 6. % of Ag. Exports to Total Exports 18.77% 17.22% 16.56% UNITED STATES 7. Agricultural Exports to Canada (2) 5,980 6,417 7,155 8. Total Exports to Canada 110,379 130,714 156,342 9. % of Ag. Exports to Total Exports 5.42% 4.91% 4.58% 10. Agricultural Exports to the World 42,238 41,938 44,936 11. Total Exports to the World 448,164 465,091 512,626 12. % of Ag. Exports to Total Exports 9.42% 9.02% 8.77% [Part 2 of 2] Table 1: Agricultural Exports as a Percentage of Total Bilateral Trade in the United States and Canada, 1992-1996 (million of dollars) CANADA 1995 1996 1. Agricultural Exports to the U. …