Early in its mandate, the Liberal cabinet was urged by its senior international trade negotiator to abandon Canada’s membership in one of its key trade negotiating alliances – the Cairns Group of exporting nations.
Then-trade minister Roy MacLaren rejected the early-1994 proposal and Canada remains a member of Cairns as it prepares for the next round of world trade talks.
“I thought we should get out of the Cairns Group and I recommended that to the government,” said Gerry Shannon, formerly Canada’s chief trade negotiator.
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“I had problems with Australia’s leadership of it and told minister MacLaren that. He decided not to take it up.”
The Cairns Group was formed in 1986 when 13 small and middle-level exporters joined forces at a meeting in Australia to press for freer trade and for an end to the export subsidy war.
Australia, as the host of the meeting, was given the chair of the Cairns Group.
It played a key role through seven years of General Agreement on Tariffs and Trade negotiations in pressing the Europeans and the Americans to reduce their subsidy levels.
It also became a critic of Canada’s attempt to defend its protection of supply managed industries.
On the export subsidy side, European Union representatives accused Cairns of being a “stalking horse” for the Americans. Cairns representatives, while criticizing the export subsidy practices of both major traders, often appeared to be excusing the Americans by seeing their subsidies as a reaction to the Europeans.
On the supply management side, the majority of Cairns members also sided with American attempts to dismantle import barriers Canada created under GATT article XI.
Last week during a speech to a chicken industry forum, Shannon described the role the Cairns Group played in forcing Canada to drop its defence of article XI.
“The United States, backed by our colleagues in the Cairns Group, strong-armed us into agreeing in the concluding days of the negotiation to replace our quantitative restrictions with high tariffs …,” he said.
Shannon said in the end, Canada was able to win tariffs high enough, and levels of duty-free access low enough, that the new rules “did not, in my judgment, significantly expose the domestic producing industry to severe challenge.”
