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Colombia-Canada: The Flowers of Free Trade

Colombia-Canada: The Flowers of Free Trade

Posted by Bruce McDougall on September 18, 2014

While it eliminates trade barriers and encourages efficiency, free trade between nations remains a controversial concept, especially among the industries that suffer as they adjust to its impact.

When the free trade agreement between Canada and Colombia took effect in 2011, Canada’s domestic flower industry criticized the federal government for eliminating protective tariffs immediately rather than giving it another 10 years of protection against pesky foreigners. According to Irwin Smith, then executive director of an industry group called Flowers Canada Growers, the government had sacrificed its domestic flower industry by giving Colombians full access to the Canadian market. In return, Canada gained access to Colombia’s markets for wheat, barley, mining and financials. Citing differences in environmental standards and wage disparities between the two countries of $5 an hour, Smith said, “The only way forward for Canadian flower growers is to be better than their competition.”

Since that’s one of the objectives of free trade, the Canadian government stood back and gave the industry its silent blessing.

Since then, Canada’s exports to Colombia have risen by close to 10%, based primarily on wheat, potash and newsprint, while Colombia’s exports to Canada have declined. For Colombia, the brightest spot in its less than stellar trade performance with Canada is flowers. Between 2011 and 2014, flower exports to Canada have increased by 35%.

The $100-billion global market for cut flowers is twice as big as the global trade in copper. As an exporter of cut flowers, Colombia ranks second in the world behind the Netherlands, shipping carnations, roses and chrysanthemums worth more than US$1 billion a year. Over half of all the fresh flowers imported to Canada come from Colombia, including more than 50% of the roses and almost every carnation sold by corner stores, florists, Loblaws and Home Depot.

At less than $1 a stem, carnations are the front-line cannon fodder in the global flower industry’s battle for market supremacy. Colombia also exports another 1,500 varieties of flower, from $5 calla lilies to eustoma that sells for $17 a stem.

Reacting to the inevitable, Canada’s flower growers have either adjusted to free trade or abandoned the business. From more than a dozen operations before 2011, for example, only one grower of cut roses remains in Ontario, which accounts for more than 50% of Canada’s flower industry.

“Currently surviving on their equity, it is likely that additional cut flower growers will be forced out of business within the next few years,” says Wayne Brown of the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA).

As Canada’s third-largest agricultural industry, behind dairy and meat production, flower growers have not folded completely. Some have turned to growing greenhouse vegetables or flower varieties that cannot be shipped over long distances, while others have invested in automation. While Colombian growers pay $3 an hour to workers who plant, maintain and harvest flowers, many Canadian growers now use robots.

Unfortunately for Canada’s growers, consumers in this country still regard flowers as a discretionary luxury. Europeans spend 10 times as much as North Americans on cut flowers, which they buy every week. In Ontario, consumers buy cut flowers only three or four times a year, primarily for impressing girlfriends and maintaining marital peace.

Perhaps the industry could increase sales to hopeful Canadian husbands if it publicized test results from an article in the British Medical Journal. According to the Journal article, a vase of flowers will stand up straight for as long as a week beyond its natural life span when sprinkled with a few grains of Viagra.

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