A prominent trade analyst is warning that Canadian agriculture should temper its enthusiasm about potential market gains if Canada and the European Union sign a free trade deal.Canadian food and agriculture exporters have been telling parliamentary committees that Canada-EU trade talks scheduled to wrap up next year could open up hundreds of millions of dollars worth of export opportunities in Europe.But Peter Clark of Ottawa-based Grey, Clark, Shih and Associates last week sent a submission to the agriculture and trade committees challenging the optimists.“The most important question for Canadian farmers and ranchers is whether or not the Common Agricultural Policy will really be on the table,” Clark wrote.He insisted the EU would never compromise its subsidy rich and protectionist farm policy.“The EU wants Canada to open up its dairy markets, to undo the Canadian Wheat Board export monopoly and to further open markets for depressed and declining European wine industries,” he said.“Yet at the same time, the EU negotiators are not even prepared to discuss concessions to discipline production and trade-distorting support under the CAP. CAP provides tens of billions of euros in support every year to EU farmers.“It seems inevitable that Canadian farmers and ranchers will be forced to compete with the deep-pocketed EU and member state treasuries and any gains envisaged going into the negotiations will prove to be illusory,” he wrote.Last week, the House of Commons international trade committee continued to hear evidence that negotiations are going well and that Canadian market access gains are possible.“The Europeans have characterized it as about a year ahead of schedule of where they thought they would be, so we are well ahead,” chief negotiator Steve Verheul, a former chief agriculture negotiator, told MPs June 15.“That’s partly because the negotiations so far have gone more smoothly than we had thought and we’re trying to do it quickly so we can maintain the momentum.”Chief agriculture negotiator Gilles Gauthier said neither side has so far indicated that any topic is off the table, including supply management protections.“It remains to be seen whether among their top interests there will be some interest pertaining to supply managed products.”But he said the Canadian government has made clear it will resist attempts to undermine supply management.Verheul also noted that as negotiations proceed through several more rounds of talks, difficult issues will arise.“Both sides have some sensitivities,” he said. “The EU has some sensitivities in areas where they have taken protection for things such as genetically modified organisms and biotechnology.”Gauthier earlier told an economics conference that the Canadian beef sector should not expect the EU to ease its resistance to imports of hormone-treated beef.Meanwhile, Jacques Pomerleau, executive director of Canada Pork International, went before MPs to express agriculture’s optimism.He said Canada has become one of the world’s largest pork exporters without significant access to Europe. CPI hopes the free trade talks will change that.“Although it is difficult to quantify the exact potential of the market at this time, we estimate that if the conditions are right, the EU could easily become one of our top 10 markets, if not one of the top five,” he said.Clark is skeptical.“The CAP and its interventions in the market, which insulate European farmers from risk, will limit potential market access gains for Canada,” he wrote MPs.“Experience has proven that despite the best of intentions, CAP reform goes out the window whenever there is a problem. If EU farmers are threatened with adverse markets or prices, they take to the streets and resort to civil disobedience and the commission’s normal resistance to backsliding melts and emergency cash flows to farmers as it did for dairy since 2009.”
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