Protectionism hinders trade deals, says policy group

In line with a recent stream of supply management criticism, the C.D. Howe Institute has published a report that calls the protectionist policy a barrier to ambitious trade deals.

In particular, the institute’s February commentary portrayed it as a “supply management stumbling block” to Canada being allowed to join trade talks in the Trans-Pacific Partnership negotiation.

The TPP negotiation among Pacific and Asian countries is considered the “next great thing” among trade promoters, opening up potentially billions of dollars in new trade opportunities for Canadian exporters.

After years of hesitation, Canada has signalled it wants to join the negotiation, but New Zealand is insisting Canada agree to negotiate away some supply management protections as the price for joining the negotiation.

The trade liberalization lobby has argued this is a clear example of supply management thwarting Canada’s broader trade goals.

But last week, a leading agricultural export promoter told MPs at a House of Commons agriculture committee meeting that blaming supply management for Canada’s exclusion from TPP negotiations is too simplistic.

The issue is to convince the United States that Canada should be at the negotiating table and so far, the Americans “are not paying attention to us,” Canadian AgriFood Trade Alliance executive director Kathleen Sullivan told MPs.

“I don’t think it comes down to any particular protectionist policy we have in Canada,” she said. “The U.S. has its own protectionist policies and they certainly have them in abundance on agriculture: their own dairy sector and their sugar policy as well.”

She said winning support from the U.S. is key to Canada’s inclusion in the TPP negotiation, as the C.D. Howe study argued.

“We have a lot of work to do with the Americans,” said Sullivan. “I don’t think that Canada’s supply management policy is the specific problem or the only problem.”

She said Canada’s decision during free trade talks with the European Union to put all issues on the table for negotiation was a breakthrough.

A deal is expected this year.

“For the first time in negotiating a trade deal, Canada made no exclusions to its negotiating mandate,” she said. “You have no idea how much that has helped us in the context of Canada-EU. It sends a signal to the rest of the world that we are serious about talking about trade.”

And despite complaints from supply management defenders that making the system a discussion item means the system will be undermined, Sullivan said it simply signals that Canadian trade goals are comprehensive.

“At the end of the day, every country has sensitivities (and) it’s up to our negotiators to defend those sensitivities or narrow the gaps in them or find ways to make the deal work,” she said.

“Providing a comprehensive negotiating mandate doesn’t mean we’re trading off every sector in Canada but it sends a signal at the beginning that we’re prepared to trade.”

Viterra vice-president Richard Wansbutter told MPs that the government should put more resources into its Agriculture Canada market access secretariat.

“It needs to be properly resourced,” Wansbutter said.

“If that means more staff, I know that that’s a tough one in today’s economic climate but we need to have more resources there, human and financial, to help us work through our market access issues.”

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