THE recent framework agreed upon by World Trade Organization member countries, which outlines issues that will be on the table for future negotiations, was greeted with cheers from some quarters and warnings from others.
Groups that espouse free trade welcomed the news that export subsidies will be eliminated over an unspecified time. They also approved of the latitude expected to give Canada room to negotiate greater market access.
But supply management and the Canadian Wheat Board were also tossed onto the negotiating table, drawing criticisms that Canadian officials have paved the road to destruction for these systems. Domestic subsidies, a key United States farm support, received less attention than many Canadian farm and export groups wanted, with reductions only on big ticket domestic subsidies up for discussion.
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On the CWB, Canadian officials must make it clear that the board cannot be negotiated out of existence by foreign governments. It is a domestic matter.
The CWB has been investigated numerous times by the U.S. government for alleged improper trading activities and has come out clean. Obviously some do not judge the board by its actions, but instead allow philosophical objections against monopolies to obscure their vision.
Most criticisms levelled at the board by WTO members focus on the federal government’s practice of picking up the tab if revenue at the end of the year falls short of initial payments. Only once in the last 13 years has this been necessary.
When compared to the rich subsidies thrown at agriculture in the U.S. and European Union each year, federal support for the CWB is a pittance.
But it is now a stated goal of the next WTO round to eliminate such government guarantees and end governments’ ability to underwrite credit losses.
Doing away with either has serious implications for farmers, especially in the cost of borrowing. If it comes to that, though, there are other ways to set up guarantees. For example, a fund backed by industry players could be established to act as insurance against shortfalls.
The CWB’s monopoly has also drawn fire, and while the language on that in the draft agreement is softer, it will be an issue at the table.
It is difficult to imagine the marketing agency that would remain without government backing through a legislated monopoly, but those types of decisions are for Canadian farmers to decide.
Farmers must make it clear that no deal is better than a bad deal. For Canadians to give up more at this point without first seeing commitments for drastic reductions in export and trade-distorting domestic subsidies, better access to foreign markets, and the freedom to help farmers with disaster assistance, there can be no deal.
It is time for farmers to share in some of the benefits of freer world trade.
