- The trade policy regarding agriculture in the European Union is called the Common Agricultural policy. The policy was inaugurated in 1962, but since then, it has undergone several reviews. The objectives of the policy are to improve agricultural productivity within the member states by promoting the use of technology and optimizing the factors of production, ensure equitable standards of living for members in the agricultural community, establish stability in the markets, secure the availability of agricultural supplies to member states and provide consumers in members states with reasonably priced foods as well as good profits for the agricultural farmers (Ciolos 6). Several trade policy reviews have been performed. For instance, a report by the World Trade Organization shows that the Common Agricultural Policy continues to determine the conditions for access in the European Union. The reports decries the spillover effects of the policy to maintain self-sufficiency in the European Union member states, especially with regard to primary agricultural products. Although high tariffs are applied at the borders, tariff quotas allow members of the World Trade Organization to get reduced or zero rates in high-tariff items from the European Union. Often, the Common Agricultural Policy has been criticized for its environmental impact. However, the trade policy review of 2013 noted the reforms to the policy already agreed upon, especially the integrating of environmental aspects and the support for the development of rural areas. The trade policy review also highlights the commitment of the European Union to offer income support to the farmers in member states in order to enhance the continued provision of agricultural goods to the member states and by extension meeting its policies in self-sufficiency for primary goods (World Trade Organization 5).
- Canada is a strategic trade partner for many countries. The textile and clothing sector is one of the main industries in the country, and the source of many products in the export market for the country’s economy. The trade policy review of the World Trade Organization highlights several points, especially as the trade policy touches on the textile and clothing sectors of the economy. Canada has zero-rated many tariff lines that relate to machinery, manufacturing inputs and equipment in order to enhance the competitiveness of different sectors, more so the manufacturing sector of the economy. As such, Canada became the first country in the G-20 to effect a tariff-free zone specifically for industrial manufacturers. However, this move resulted in an increased tariff escalation that in turn resulted in increased effective rates, with regards to effective protection for many sectors, including the textile and clothing sectors of the Canadian economy (World Trade Organization 9).
Additionally, the trade policy in Canada has seen the unilateral liberalization of trade tariffs. However, trade partners have urged the country to reform its trade policy even further. For instance, Sinagapore, a country enjoying strong economic ties with Canada. In the trade policy review of 2011, Singapore noted the tariff escalation in the textile and clothing industry in Canada (World Trade Organization 16). The same sentiments were noted by Turkey, a trading partner of Canada. More precisely, Turkey noted that since the trade policy review in 2007, high tariffs were were still charged on textiles and clothing (World Trade Organization 17). Regardless, Canada has many trade partners. For instance, the trade policy review highlights the strong economic ties between Canada and Pakistan. Consequently, the main exports of Canada from Pakistan include textile and clothing (World Trade Organization 15). The trade policy in Canada has allowed this partnership to flourish. Honduras is also another trading partner, with exports from the textile and clothing sectors highlight the trade relations between these two countries (World Trade Organization 44).
- The United States of America has several complaints against Canada, especially with regards to trade in dairy and agricultural products. Canada employs supply management systems in order to control several industries, among them the dairy industry. This involves the use of production quotas to regulate international trade. As such, the supply management regime adversely impedes the ability of producers of dairy products from the United States to increase their exports to Canadian markets. This is because the exports are limited to the tariff quota rates. This also inflates the prices of these products imported from the United States. Currently, prohibitively high tariffs are levied on products imported from the United States because imports have exceeded the quota levels. Additionally, the compositional standards for various dairy products, such as cheese in Canada restrict access to particular dairy products from the United States market. The regulations control the ingredients that dairy industries can use in making cheese. They have also established a minimum percentage of certain ingredients such as fluid milk in cheese preparation. The importers of cheese are required to ensure compliance for these products with these regulations. These complaints affect the ability of producers in the United States to export into the Canadian market. Consequently the United States has been lobbying for the elimination of these tariffs (Office of the United States Trade Representative 2).
- Most of the export goods are transported by road. This accounts for 34.3% of of the exports in 2013. Of note is the fact that 97.1% of the exports transported by road are taken to the United States. This shows the significance of the geographical proximity to the trade relations between these two countries. The least used mode of transport for export goods was air. This can be attributed to the fact that this mode is relatively expensive compared to the other modes of transport. With imports, the road also was the preferred mode of transport for merchandise, accounting for 52.8% of all imports. In a similar trend, most of the imports by road came from neighboring United States, with estimates of around 70.9%. This also highlights the significance of geographic proximity to the trade relations (Fast n.p.)
Ciolos, Dacian. The common agricultural policy: A partnership between Europe and farmers. 2012. Web. 5. Nov 2014.
Fast, Ed. Canada’s State of Trade: Trade and Investment Update – 2014. 2014. Web. 5. Nov 2014.
Office of the United States Trade Representative. Trade Summary, 2014. Web. 5. Nov 2014.
World Trade Organization. Trade policy review. 23. Oct 2013. Web. 5. Nov 2014.
World Trade Organization. Trade policy review. 27. Jul 2011. Web. 5. Nov 2014.