How the Canadian Trade Hgreement 



Will Affect Farmers 



By Henry A. Wallace, Secretary of Agriculture 



DETAILS of the new trade agree- 

 ment between Canada and the 

 United States appeared in the 

 newspapers on Monday, Nov. 18. It is 

 now possible to analyze the probable 

 effect of this agreement on American 

 agriculture, and I am taking this early 

 opportunity to lay the outstanding facts 

 about the agreement before you. 



Apparently it will be increasingly 

 difficult, as time goes on, to discuss 

 this new agreement calmly. Many peo- 

 ple have political axes to grind, and 

 there is nothing like a tariff change to 

 start the axes a-grinding. So while there 

 is y?t time, suppose we see for our- 

 selves exactly what is in this new trade 

 agreement. 



Five years ago we exported 50 million 

 dollars worth of farm products to Can- 

 ada; last year, about 15 million dollars 

 worth. To recapture even half of that 

 lost 35 njillion do'-lars worth of farm 

 business would surely be worth while. 

 Five years ago American industry ex- 

 ported to Canada 400 million dollars 

 worth of goods included in the list on 

 which Canada is now making con- 

 cession; last year, that total was down 

 to 100 million dollars. To get that trade 

 even part-way back to the 400-million- 

 doMar figure would surely put many of 

 our unemployed to work, would increase 

 industrial payrolls, and thereby improve 

 the American market for American farm 

 products, and especially for beef and 

 farm products produced in the East. 



Canada Cuts Duties 



Considering only the farm items now, 

 Canada has agreed to reduce import 

 duties on more than a hundred Ameri- 

 can farm products. The reductions range 

 from 25 percent on many fruits and 

 vegetables to 100 percent on potatoes. 

 There is an average reduction of 50 per- 

 cent in the Canadian tariff on our pork 

 products which will be a matter of real 

 significance when we have had several 

 years of good corn yields per acre. If 

 there were time, it would be interesting 

 to itemize these concessions, and see 

 how they may mean an improved mar- 

 ket for products grown in practically 

 every section of the United States. That 

 itemized list will have to be left to a 

 publication the Department of Agricul- 

 ture is now preparing, and which you 



may have in a week or so for the asking. 



In return for Canada's concession on 

 more than 100 American farm products, 

 the United States agrees to make 

 limited concessions on 19 Canadian farm 

 products. You will notice the word 

 "limited." It means that while we are 

 reducing these tariff duties for Can- 

 ada, we agree to admit into the United 

 States only limited amounts of certain 

 important farm products at the reduced 

 rates of duty. Furthermore, if we see 

 any danger of imports interfering with 

 the purposes of an adjustment program 

 under the Agricultural Adjustment Act, 

 we have the right to limit such imports 

 to whatever extent may be necessary. 



Notwithstanding these limitations, 

 and notwithstanding the benefits which 

 the United States as a whole is bound 

 to get from this trade agreement with 

 Canada, it is quite possib'e that you will 

 hear a great deal during the coming 

 months about imports of certain farm 

 products from Canada. To judge by 

 what has appeared in the press already, 

 you will hear charges that the new 

 agreement is unfair to such important 

 farm products as cattle and cream. 



10 Months Study 



In considering these charges, you 

 should know that this trade agreement 

 with Canada has been under intensive 

 consideration for 10 months, and that 

 the probable consequences of every 

 American concession have been studied 

 with the utmost care. The negotiators 

 wanted to avoid any possibility of injury 

 to any producing group. I believe the 

 negotiators have succeeded surprisingly 

 well, but of course that fact will not 

 silence those who do not want us to 

 restore our trade with Canada. 



Now let's look into these American 

 concessions on cattle. Three classes are 

 involved: cattle weighing 700 pounds or 

 more, calves weighing 175 pounds or 

 less, and dairy cows. Cattle weighing be- 

 tween 175 and 700 pounds are not af- 

 fected by this agreement. The Hawley- 

 Smoot tariff rate on cattle weighing 700 

 pounds and over was 3 cents a pound. 

 The new rate for Canada is to be 2 cents 

 per pound, which is the same as in the 

 Pordney-McCumber tariff, but with the 

 limitation that no more than 155,000 

 head a year may be imported at this 



rate from Canada and all other nations 

 put together. This number of cattle rep- 

 resents three-fourths of one percent of 

 the cattle slaughtered in the United 

 States in an average year. It is a num- 

 ber materially less than the average 

 total annual cattle imports from Canada 

 • from 1927 to 1929. Can it be seriously 

 argued that the stockmen of the United 

 States are likely to suffer from any such 

 importation? There need be no fear of 

 the generalization of this agreement to 

 other nations, because practically all im- 

 ports of cattle over 700 pounds in weight 

 come from Canada. The Mexican imports 

 weigh less than 700 pounds per head, 

 and are still bound by the Hawley-Smoot 

 rates. 



The duty on calves is reduced in the 

 Canadian agreement from 2y2 to 1% 

 cents a pound, but again this reduced 

 duty will apply to only 52,000 head, or 

 about Vi of 1 percent of the total cattle 

 slaughter in this country. The duty on 

 dairy cows is reduced from S to IVt 

 cents a pound on a quantity not to ex- 

 ceed 20,000 head. Inasmuch as our dairy 

 cattle numbers are not now excessive, 

 and inasmuch as the program to eradi- 

 cate tuberculosis and Bang's disease has 

 eliminated 858.000 animals during the 

 year ending last August, a quota of 

 20,000 at a reduced duty is so in- 

 finitesimal that it should not alarm any- 

 one. 



Another American concession about 

 which much will be said is the reduced 

 duty on Canadian cream. It has been 

 reduced from 56.6 cents to 35 cents a 

 gallon, but again there is a quota in- 

 volved. The agreement says we will 

 admit no more than 1.500,000 gallons of 

 cream a year from Canada at the re- 

 duced duty. 



Facts .\bnut Cream 



In terms of whole milk equivalent this 

 represents about one-tenth of one per- 

 cent of the total annual milk produc- 

 tion of the United States. Imports of 

 1,500,000 gallons of cream under the new 

 agreement should be compared with im- 

 ports from Canada of three to five mil- 

 lion gallons a year between 1924 and 

 1929. 



It is difficult to see anything at all 

 disturbing to the American dairyman 

 (Continued on page 33) 



30 



I. A. A. RECORD 



