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The State, Organized Interests and Canadian Agricultural Trade Policy: The Impact of Institutions*

Published online by Cambridge University Press:  10 November 2009

Grace Skogstad
Grace Skogstad
Affiliation:
University of Toronto
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Abstract

This article examines the Canada-United States Free Trade Agreement (FTA) with the objective of explaining the inclusion of agriculture in the FTA, the negotiation process surrounding the FTA and the outcomes with respect to agricultural commodities. It departs from both the systemic and state-centred models which have dominated Canadian foreign economic policy to argue that, while developments in the international trading system are important factors in explaining Canada's decision to pursue the FTA, the negotiation process and outcomes of the FTA are importantly accounted for in terms of domestic institutions: specifically, state-societal linkages in combination with federal structures. Evidence that the autonomy and capacity of national trade officials was constrained throughout the negotiation process and in terms of the FTA provisions regarding agricultural commodities requires a re-formulation of foreign economic policy-making that links it to the domestic institutional context. Within the latter, the sub-national governments, in combination with durable state-group policy networks, are important factors.

Résumé

Cet article passe en revue l'accord de libre-échange (ALE) entre le Canada et les États-Unis, avec pour objectif d'expliquer la fa¸on dont l'agriculture a été traitée dans l'ALE, le processus de négociation concernant l'ALE et ses résultats touchant le domaine agricole. L'approche retenue est différente des modèles systémiques et centrés sur l'État qui ont dominé l'explication des politiques économiques extérieures canadiennes. Il est soutenu que les changements dans le système de commerce extérieur sont des facteurs importants qui ont pesé dans la décision du Canada de s'engager dans un accord de libre échange. De měme, le processus de négociation et les résultats de l'ALE sont fortement reliés aux institutions nationales—en particulier aux liens gouvernements-sociétés ainsi qu'aux structures fédérates. Il est démontré que l'autonomie et la capacité d'action des négociateurs nationaux ont été limitées tout au long du processus de négociation. Pour comprendre le traitement reçu par le domaine agricole dans l'ALE, il faut prendre en compte les liens entre le processus de décision en matière de politique économique extérieure et le contexte institutionnel national. Dans ce contexte, les gouvernements sub-nationaux ainsi que les réseaux bien établis entre les gouvernements et les groupes sont des facteurs importants.

Type
Research Article
Information
Canadian Journal of Political Science/Revue canadienne de science politique , Volume 25 , Issue 2 , June 1992 , pp. 319 - 347
Copyright
Copyright © Canadian Political Science Association (l'Association canadienne de science politique) and/et la Société québécoise de science politique 1992

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References

1 A good summary of these three models can be found in Ikenberry, G. John, Lake, David A. and Mastanduno, Michael, “Introduction: Approaches to Explaining American Foreign Economic Policy,” International Organization 42 (1988), 1–14CrossRefGoogle Scholar.

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24 Goldstein, Judith, “The Impact of Ideas on Trade Policy: The Origins of U.S. Agricultural and Manufacturing Policies,” International Organization 43 (1989), 31–71CrossRefGoogle Scholar, is instructive in documenting how the two divergent strands of US trade policy—a protectionist agricultural trade policy and a liberalized commercial trade policy—became institutionalized.

25 March and Olsen, “The New Institutionalism,” 738.

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27 See Skocpol, Theda, “Bringing the State Back In: Strategies of Analysis in Current Research,” in Evans, Peter B., Rueschmeyer, Dietrich and Skocpol, Theda, eds., Bringing the State Back In (New York: Cambridge University Press, 1985)Google Scholar; Helen Milner, “Resisting the Protectionist Temptation”; and Atkinson, Michael M. and Coleman, William D., The State, Business and Industrial Change in Canada (Toronto: University of Toronto Press, 1989)CrossRefGoogle Scholar.

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29 Anonymous, , “Issues of Constitutional Jurisdiction,” in Leslie, Peter M. and Watts, Ronald L., eds., Canada: The State of the Federation 1987–88 (Kingston: Institute of Intergovernmental Relations, 1988)Google Scholar notes that neither Parliament nor the governments or legislatures of the provinces has any legal authority to make or be a party to international treaties. That right rests with the federal government as a prerogative power. Compared to the US, where the executive must obtain the approval of the Senate for treaties, the Canadian government has thus considerable autonomy.

30 Protheroe, Imports and Politics, 81.

31 Dearlove, John, “Bringing the Constitution Back In: Political Science and the State,” Political Studies 37 (1989), 534CrossRefGoogle Scholar, makes a more general point about the need to “attend to” constitutions—in this case, the federal principle of Canadian constitutionalism—when “bringing the state in”: “when we attend to the significance of constitutional theory—to the interpretation of laws, customs and conventions—we are getting to grips with the way in which a system of rules provides rules and resources and so both constrains and enables the capacity of institutions and the behaviour of individuals occupying key positions within the state.” (Emphasis in original.)

32 Finlayson, “Canadian International Economic Policy,” 31–34.

33 A much fuller historical and contemporary discussion of Canadian agricultural policy can be found in Skogstad, Grace, The Politics of Agricultural Policy-Making in Canada (Toronto: University of Toronto Press, 1987)Google Scholar.

34 Winham, International Trade and the Tokyo Round Negotiation, 344, 348.

35 Pross, A. Paul, “Pressure Groups: Adaptive Instruments of Political Communication,” in Pross, A. Paul, ed., Pressure Group Behaviour in Canadian Politics (Toronto: McGraw-Hill, 1975), 1–22Google Scholar; Pross, A. Paul, Group Politics and Public Policy (Toronto: Oxford University Press, 1986)Google Scholar; and Coleman, William D., Business and Politics: A Study in Collective Action (Montreal: McGill-Queen's University Press, 1988)Google Scholar.

36 Atkinson and Coleman, The State, Business and Industrial Change in Canada.

37 The differing factors affecting the organizational development of Ontario and Quebec farmers are dealt with more fully in Skogstad, Grace, “The Farm Policy Community and Public Policy in Ontario and Quebec,” in Coleman, William D. and Skogstad, Grace, eds., Policy Communities and Public Policy in Canada (Toronto: Copp Clark Pitman, 1990), 60–67Google Scholar.

38 Among others, see Cairns, “The Embedded State”; Burt, Sandra, “Organized Women's Groups and the State,” in Coleman, and Skogstad, , eds., Policy Communities and Public Policy, 191–211Google Scholar; Leslie A. Pal, “Official Language Minorities and the State: Dual Dynamics in a Single Policy Network,” in Ibid., 170–90; A. Paul Pross and S. McCorquodale, “The State, Interests and Policy Making in the East Coast Fishery,” in Ibid., 34–58; and Skogstad, “The Farm Policy Community and Public Policy in Ontario and Quebec.”

39 Dawson, Helen Jones, “National Pressure Groups and the Federal Government,” in Pross, , ed., Pressure Group Behaviour in Canadian Politics, 27–58Google Scholar.

40 Coleman, W. D. and Grant, Wyn P., “Regional Differentiation of Business Interest Associations: A Comparison of Canada and the United Kingdom,” this Journal 18 (1985), 7–9Google Scholar, and Coleman, Business and Politics, 239–48.

41 Schultz, Richard, Federalism, Bureaucracy and Public Policy: The Politics of Highway Transportation (Montreal: McGill-Queen's University Press, 1980)Google Scholar; Simeon, Richard, Federal-Provincial Diplomacy (Toronto: University of Toronto Press, 1972), 142Google Scholar; and Thorburn, Hugh, Interest Groups in the Canadian Federal System (Toronto: University of Toronto Press for Supply and Services Canada, 1985), 68–77Google Scholar. Elsewhere Thorburn notes that groups may influence government players in advance of intergovernmental bargaining (60–68, 118, 119).

42 Atkinson, Michael M. and Coleman, William, “Strong States and Weak States: Sectoral Policy Networks in Advanced Capitalist Economies,” British Journal of Political Science 19 (1989). 47–67CrossRefGoogle Scholar.

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45 Skogstad, “The Farm Policy Community and Public Policy.”

46 Expert opinions on the jurisdictional niceties with regard to trade policy formulation and implementation can be found in Anonymous, “Issues of Constitutional Jurisdiction,” and in the testimony of Andrew Petter to the Senate Standing Committee on Foreign Affairs, Proceedings (Ottawa: Queen's Printer), February 23, 1988, 15:7 and 15:42. For a discussion of the implications of this for agriculture, see Skogstad, Grace, “Canada, Agriculture and the MTN: Seeking to Reconcile Conflicting Domestic Interests,” in Skogstad, Grace and Cooper, Andrew Fenton, eds., Agricultural Trade: Domestic Pressures and International Tensions (Montreal: Institute for Research on Public Policy, 1990)Google Scholar.

47 Goldstein, “The Impact of Ideas on Trade Policy,” 71.

48 Forbes, J. D. et al. , Economic Intervention and Regulation in Canadian Agriculture (Ottawa: Economic Council of Canada, 1982)Google Scholar claim that state officials involved in the creation and implementation of the poultry and egg marketing boards have been “captured” by them. This is not the view of the author but, as Streeck, Wolfgang and Schmitter, P. C., eds., note in Private Interest Government (London: Sage, 1985)Google Scholar, state officials must have considerable policy capacity if they are to ensure that “private interest governments,” such as self-regulatory marketing boards, internalize the costs of their self-interested behaviour.

49 The “Statement of Administrative Action” submitted to Congress by the US administration regarding the Canada-US FTA reiterated the administration's intention to pursue consultations to make the price-setting mechanism of the Canadian Wheat Board “transparent to the US Government, producers and processors” (32).

50 See the testimony and documentation of Jim Lohoar, Assistant Director, International Trade Policy Division, Agriculture Canada, before the Senate Standing Committee on Foreign Affairs (Proceedings, December 8, 1987, 10:17–10A: 16).

51 Atkinson and Coleman, The State, Business, and Industrial Change, 6.

52 The classic example of effective institutional change with significant policy ramifications is the delegation of the US Congress' trade-making authority to the executive in the 1934 U.S. Trade Act. The action allowed Congress to remove itself as a target of interest group pressure, pressure which had led to the protectionist Hawley-Smoot tariffs and the world-wide Depression. Goldstein ( “The Impact of Ideas on Trade Policy,” 59) argues that trade liberalization in the manufacturing sector would not have succeeded in the US without this shift in authority.

53 Winham, International Trade and the Tokyo Round Negotiation, 347.

54 Ibid., 340.

55 Ibid., 341.

56 This committee was effectively displaced by a parallel committee, the Federal-Provincial Agriculture Trade Policy Committee, which predated it. Co-chaired by the senior official responsible for International Trade in Agriculture Canada and a deputy minister of agriculture from Alberta, it was briefed regularly by an official from the TNO.

57 Winham, International Trade and the Tokyo Round Negotiation, 336.

58 For an insight into the Canadian government's anxiety about opponents of free trade seizing “the initiative” and its strategy to head off the possibility of a major coalition of free trade critics, see Prime Minister's Office, “Communications Strategy,” in Cameron, , ed., The Free Trade Papers, 7–8Google Scholar. Winham (International Trade and the Tokyo Round Negotiation, 33) notes that the efforts in the US to structure constituency relations during the Tokyo round were designed to identify passive interests, as well as to shape demands and balance interests. See Dasko, Donna, “Canadian Public Opinion: Sources of Support and Dissent,” in Cameron, , ed., The Free Trade Papers, 26–32Google Scholar, for Canadian public opinion towards free trade.

59 Winham, International Trade and the Tokyo Round Negotiation, 335–37, notes that a similar body, the Canadian Trade and Tariff Committee, existed during the Tokyo GATT round as an interdepartmental committee which received submissions from constituents and served as a conduit to industry and agriculture. See also Winham, Gilbert R., “Formulating Trade Policy in Canada and the U.S.: The Institutional Framework,” in Skogstad, and Cooper, , eds., Agricultural Trade, 29–38Google Scholar.

60 Figures provided by Anderson, Andrew and Rugman, Alan M., “Business and Trade Policy: The Structure of Canada's New Private Sector Advisory System,” Canadian Journal of Administrative Sciences 4 (1987), 4Google Scholar.

61 Winham, “Formulating Trade Policy in Canada and the US,” 36–37.

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63 Wilson, Barry, Farming the System (Saskatoon: Western Producer Books, 1990), 147Google Scholar.

64 See the testimony of various farm groups before the Senate Standing Committee on Foreign Affairs, Proceedings, 32:103–04, for indications of disenchantment. Forfarm groups' views of the FTA, see Proceedings, August 8, 1988, Issue No. 30, and August 10, 1988, Issue No. 32.

65 Winham (“Formulating Trade Policy in Canada and the US,” 32–33) notes that the US counterpart of the Canadian ITAC during the Tokyo round, the Advisory Committee on Trade Negotiations (ACTN), was considerably more influential, principally because the latter had the power, which the ITAC did not, to advise Congress formally on whether the Tokyo round agreements were in the interest of the US. His conclusions regarding the influence of the US Sectoral Advisory Committee (SAC) system are the same as those I draw here regarding the SAGITs: namely, that the SAC system increased the power of the executive over significant constituency groups.

66 Anderson and Rugman, “Business and Trade Policy.”

67 This information is based on an interview with a senior negotiator in the TNO in December 1989, and on Brown, Douglas M., “The Federal-Provincial Consultation Process,” in Leslie, and Watts, , eds., Canada: The State of the Federation 1987–88, 77–93Google Scholar.

68 Winham, International Trade and the Tokyo Round Negotiation, 339.

69 Information obtained in an interview with a senior official in the TNO in February 1990.

70 The decision to defer the negotiation of a subsidies and countervailing duty code to further consultations over the next five to seven years was the result of internal dissension in both Canada and the US. However, to the extent that agricultural subsidies constitute a significant portion of such non-tariff barriers, little progress on such a code can be made until there is consensus within both countries as to which subsidies should be deemed to be trade-distorting and which should not.

71 Senate Standing Committee on Foreign Affairs, Proceedings, August 8–10, Issues No. 30–32, for submissions of the major farm groups and food industries.

72 Compare Wilson, Barry, “Marketing Boards Safe in Trade Talks,” Western Producer, January 30, 1986, 1Google Scholar, and Staff Reporters, “We Give Up: What Do They Mean?” Western Producer, February 6, 1986, A5.

73 Warnock, John, “Agriculture and the Food Industry,” in Cameron, , ed., The Free Trade Papers, 167–168.Google Scholar

74 The blow the FTA dealt to grape growers as a result of the Canadian government's agreement to terminate the procurement, mark up and domestic content practices followed by provincial liquor boards that discriminate against US wines and grapes will not be discussed here. The origin of the national treatment clause in the FTA with respect to US wines and distilled spirits can be traced to the need to abide by a prior GATT commitment and a GATT panel ruling. In the Tokyo round, Canada agreed to honour Article III of the GATT (the national treatment clause) no later than 1987. In 1987, when Canada still had not complied with Article III, a GATT panel ruled that provincial liquor boards and commissions violated the GATT provisions regarding treatment of wine imports.

75 Coleman, Business and Politics, 198–203. See also Coleman and Grant, “Regional Differentiation of Business Interest Associations.”

76 See Marotte, Bertrand, “Quebec to Demand Import Controls, Minister Says,” Globe and Mail, December 4, 1987, A15Google Scholar, and Wilson, Barry, “More Dairy Protection: Quebeckers Approve,” Western Producer, February 18, 1988, A34Google Scholar.

77 Skogstad, “The Farm Policy Community and Public Policy.”

78 Donald V. Smiley defines executive federalism as the relations among federal and provincial political and bureaucratic officials as they interact in policy formulation and implementation (Canada in Question: Federalism in the Eighties [3rd ed.; Toronto: McGraw-Hill Ryerson, 1980], 91Google Scholar).

79 “Trade Negotiations and the Canadian Dairy Industry,” address by Richard Doyle, Executive Director, Dairy Farmers of Canada, February 1990, describes these tactics and links with a number of European producer organizations and the powerful Japanese producer co-operative organization. On January 29–31, 1990, an international meeting of agricultural producer organizations interested in clarifying and strengthening Article XI of the GATT met in Ottawa and endorsed a joint statement (see Dairy Farmers of Canada, “International Meeting on Article XI of the GATT, Statement of Principles”).

80 The GATT Council moved in December 1989 to accept the recommendation of a GATT Panel called at the request of the US that the protection afforded supply management by Article XI.2(c) did not extend to further processed dairy products like yogurt and ice cream. See General Agreement on Tariffs and Trade, Canada—Import Restrictions on Ice Cream and Yoghurt: Report of the Panel, September 27, 1989, and General Agreement on Tariffs and Trade (Council Report), Canada-Quantitative Restrictions on Imports of Ice Cream and Yoghurt—Panel report, n.d.

81 Whether this GATT ruling should be deemed to constitute a victory for interests supporting market liberalization remains to be determined. The Canadian government has resisted pressure to conform to the ruling, pending the outcome of the Uruguay round of the GATT. During this round, Canada has proposed a clarification and amplification of Article XI.2(c) which would render null the GATT ruling.