During free trade negotiations with the United States a decade ago, the Canadian side was a reluctant defender of supply management protections, says one of the key Canadian negotiators.
Canada’s defence of supply management was based on political considerations and pressure, primarily centred on keeping Quebec happy, rather than the logic of the position, deputy chief negotiator Gordon Ritchie says in a new book on the trade deal.
And early in the talks, negotiators were willing to make some concessions to allow more lower-priced American product across the border.
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They knew supply management was politically popular, particularly in Quebec. “We were prepared, nonetheless, to work to find some agreement that would enable our consumers to buy better quality food at lower prices while protecting the legitimate interests of the agricultural community.”
Political pressure crucial
Ritchie, now an Ottawa-based trade consultant, made it clear that the negotiators were not fans of supply management. His account confirm suspicions of farm leaders at the time that only their political pressure kept the negotiators on their side.
“Canada has a system to protect inefficient poultry farmers and dairy farmers,” he wrote in Wrestling with the Elephant, the Inside Story of the Canada-U.S. Trade Wars.
After describing the regime of production quotas, fixed prices and import restrictions, Ritchie called it a “cozy little cartel” which creates some of the highest food prices in the world in those commodities, hurting low-income consumers.
But it is popular with farmers. “The inefficient producers are thus permitted to eke out a subsistence living while the efficient producers make their fortunes.”
In the end, negotiators obeyed their political instructions and won protection for supply management, in part because the Americans offered little in return for opening the board.
“We were, regrettably, successful in protecting these restrictions,” wrote Ritchie. “We shut the Americans out of our dairy business and limited them to a derisory share of our markets, spelled out in percentages, so much for chickens, so much for powered eggs, etc. This was, I suppose, a negotiating triumph. It certainly pleased the federal agriculture minister, not to mention the premier of Quebec.”
But it was a bittersweet victory for the negotiators.
“As a matter of national policy, I for one would welcome the removal of those restrictions,” he said. “As a negotiator, however, I did not feel the Americans had paid us enough to be entitled to their removal.”
In his book, Ritchie also predicted the Americans will continue to use trade negotiations and rules to attack the power of the Canadian Wheat Board, accusing it of using subsidies to gain market share in the U.S.
“Two free trade panels have already examined these charges and dismissed them as unfounded,” he noted. “That will not stop the Americans from taking another run.”
