Earlier this month, in “Forget China: This Extremely "Developed" Country Just Suffered Its Biggest Money Outflow Ever,” we took a close look at Canada, where slumping crude prices are beginning to take a serious toll. As we noted, citing BofAML, Canada’s basic balance - a combination of the capital and the current account: a measure of national accounts that spans everything from trade to financial-market flows - swung from a surplus of 4.2% of GDP to a deficit of 7.9% in the 12 months ending in June. That’s the fastest one-year deterioration among 10 major developed nations.
Citing Sharma's data Bloomberg wrote that "money is flooding out of Canada at the fastest pace in the developed world as the nation’s decade-long oil boom comes to an end and little else looks ready to take the industry’s place as an economic driver." In fact, based on the chart below, the outflow is the fastest on record.
Well now, on the heels of the Obama administration's rejection of the "dangerous" Keystone Pipeline (which comes as oil tankers continue to derail across the country), some critics say The White House's controversial new trade deal could end up costing beleaguered Canada massive job along with the "overnight" collapse of their agriculture industry. Here's more, from Sputnik:
There are also major concerns over the effects the trade deal will have on Canadian agriculture industries.
Dr Sylvain Charlebois, professor of distribution and food policy at the University of Guelph's Food Institute in Canada, told Sputnik there were many unanswered questions in the deal.
"I think overall, reading the deal, there are some very strong elements to support Canada's membership into this partnership. However, there are a lot of unknowns unfortunately, particularly in the area of agriculture."
Dr Charlebois said that Canada's protectionist supply management scheme, which works to protect local industries, would be thrown out under the TPP, with concerns over how this would impact local producers.
"Canada has supply management, particularly with poultry, milk and eggs, so we basically produce what we need in Canada. Now the Trans-Pacific Partnership would compromise the equilibrium we have between supply and demand domestically […] allowing milk from other member countries to come into the Canadian market."
"What would happen to quotas for example? But most importantly, what would happen to processing? So there's lots of questions being asked by farmers and processors, and now with the changing government, hopefully we'll get some clarity on these issues."
Charlebois goes on to say that the dairy, egg, and poultry sectors may indeed collapse "overnight":
The supply management scheme has been in place since the mid-60s in order to protect Canadian agricultural sectors from larger US corporations.
As a result, Dr Charlebois says the local industries have become complacent and inefficient, and would not be able to survive under the TPP if it was implemented immediately. "Overnight if we were to eliminate tariffs on imports, we would likely see the dairy sector in Canada, and perhaps the poultry and egg sectors, collapse overnight.
"We're just not competitive so we need to give it some time for these sectors to adapt and change their modus operandi to make sure they do become more productive and efficient over the next 15 years or so."
So, with Canada already stinging from plunging crude, some are now suggesting that TPP could be set to cripple the country's economy even further. Meanwhile, Jim Balsillie, former co-CEO of BlackBerry - which is of course “dominating” the global smartphone market - thinks this is the “worst thing Canada has ever done":
“I’m not a partisan actor, but I actually think this is the worst thing that the Harper government has done for Canada… I think in 10 years from now, we’ll call that the signature worst thing in policy that Canada’s ever done. It’s such brilliantly systemic encirclement.
I’m just in awe at its powerful purity by the Americans… We’ve been outfoxed.”
Yeah ok, maybe, but let's just be honest, the Obama administration has never "outfoxed" anyone on anything. In fact, if recent geopolitical outcomes have taught us anything, Obama and Kerry couldn't "outfox" their way out of a wet paper bag, so to the extent they've designed some kind of cunning trade policy with the aim of bankrupting the Canadian dairy industry it would out of character, but again, stupidity sometimes produces unpredictable outcomes.
Anyway, incompetence and naïvety do have a way of creating unexpected consequences so we hope, for Canada's sake, that the The White House doesn't end up bankrupting everything chicken-related north of the border but if it does, don't worry, because that same incompetence will invariably end up starting a world war in Syria which will swiftly drive crude prices through the roof and then it's problem solved for the Canadians...