Say Cheese

 

The argument I hear in favour of defending Canada’s “supply management” cartel for dairy, chicken, and eggs, against American demands for a trade deal, is that American farm products are subsidized. So it is unfair of the Americans to object. Our government set up this cartel instead of a subsidy, saving us tax money. 

Wait a minute. If the Americans are prepared to subsidize the chicken, cheese, and eggs we buy from them, why would we object? Great!

Bad for Canadian farmers? Good for consumers, especially the poor. There are a lot more Canadian consumers than Canadian farmers. The greatest good to the greatest number.

The loss of a strategic industry? I am not concerned, so long as the loss is to the US. We are not going to war with the USA. We are bound to the US strategically; what’s good for them is good for us. Nor is there any possibility of some hostile power cutting our supply lines—we share the world’s longest land border.

It is not even clear to me that the cartel is to the benefit of Canadian agribusiness. By preventing competition, it prevents innovation and excellence. Canada used to be a major supplier of cheese to Europe. There used to be dairies near every small town in Quebec or Ontario. Supply management seems to have killed all that. We need artisanal dairies developing unique local cheeses that might command premium prices; like Oka cheese from Quebec. We need innovation; competition forces innovation.

Thucydides Missed the Real Trap

Thucydides

“Thucydides’ Trap” is not real. This is the thesis that an established power will generally go to war with a rising power that is on course to overtake it. History does not bear this out.

What history does bear out is that a power or government in decline will lash out as a last resort, a roll of the dice. For what then do they have to lose? It was declining and fracturing Austria-Hungary who forced the world into the First World War. It was a once-whipped Germany that started the Second, as the Nazi economic miracle was about to collapse. It was a Ponzi scheme, and Hitler told his generals that unless they could plunder Poland, they were going to face economic ruin. Similarly, Imperial Japan bombed Pearl Harbor in desperation, cut off from oil and about to see their forces in China collapse. Juntas in Argentina and Greece risked reckless foreign invasions, of the Falklands and of Cyprus, to forestall their collapse.

Islam has been troublesome in recent decades for the same reason: it faced collapse in the face of Christian success and the spread of secularism through improved communications.

Unfortunately, we are in such a situation. Putin in Russia looks desperate. China faces grave demographic decline. They are liable to calculate that they must use whatever power they have now, bad as that gamble might be, or lose it forever.

We are at a moment of great danger.

Dispatches from the War Front

 Mark Carney has idiotically actually declared war against the USA, claiming Canada has been “attacked.” The sense of privilege this implies is staggering: so the US is obliged to trade with Canada, and on terms Canada finds acceptable? And every prominent federal Canadian politician, and most at the provincial level, have echoed his call for war.

Trump has in response threatened to change the name of Lake Ontario to “Lake America.” The best part of the gag is that so many Canadians are getting irate about it. If he actually did that, who would it harm? Nor could he—it would surely still remain “Lake Ontario” to Canadians. Just a great troll, exposing Canadian idiocy.

One accusation—the actual terms of the rejected deal are being withheld from Canadians by our government, which is sinister-- is that the Americans wanted to end the requirement for bilingual packaging on all imports to Canada. This might be politically impossible for a Carney government to agree to, but it is a legitimate concern for American producers. They must repackage everything for the Canadian market. In practice, it amounts to protectionism—and forces up prices for all Canadians. It would be fairer for everyone if it were left to the consumer whether they were prepared to buy an item not labelled in French. 

Another rumour is that the Americans were demanding control over any trade deals Canada made with other countries. This has been called an unacceptable violation of Canadian sovereignty. 

But this is logically necessary for any free trade zone. The countries of the EU have had to agree to the same deal to make that free trade zone possible. Without it, Canadian firms can cheat by bringing in cheap foreign products and reselling them into the US, avoiding US tariffs by the back door.

Another accusation is that the US is demanding priority access to Canadian strategic minerals. How outrageous is that?

But they should, in their self-interest, and Canada should be eager to agree. America defends Canada; American security is Canadian security. We should be as concerned as they are that they have full and first access to our strategic minerals. Not long ago, the UK had similar priority access to Canadian strategic minerals as a matter of course. And for the same reason: they defended Canada if necessary.

Then, of course, there is dairy. The Canadian government is prepared to let the country die on that hill. But agreeing to American demands to allow in more dairy products would be of immediate benefit to the poorest Canadians. The free market is the best distribution mechanism.

No Deal Is a Bad Deal

If I am a prophet, the trade war our government has committed to with the US spells disaster for Canada.

A nation can decline quickly. In 1950, the Philippines were the richest country in Asia. Detroit was the richest city in America. Argentina was part of the First World.

Bad government can destroy. Any country is vulnerable.

Canada has had recklessly bad government since 2015.

I think Carney walked away from the trade deal his government had negotiated, because he was starting to get negative feedback. A lot of Canadians were irate at the harsh terms. The bad trade deal is largely if not entirely due to his “elbows up” tactics. 

Carney saw the Canadian public were going to blame him, notably in Quebec, and he was unlikely as a result to stay in office.

Walking away and having no deal is worse for Canada, but better for Carney. Now he can blame Trump instead of taking the blame, and stir up anti-Americanism.

Like Castro, or Maduro, or the mullahs in Iran. This never bodes well for the general public. 

God help Canada.

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