The Canadian Wheat Board must be on the table during upcoming world trade talks, says the European Union’s agriculture commissioner.
Canada can’t hope for a deal to reduce world export subsidies if it is not willing to sacrifice some of the wheat board’s powers, he added.
“Export monopolies, export subsidies, guarantees or long redemption periods unfairly promote exports, depress prices and hence harm developing countries. Let’s do away with them,” Franz Fischler said in a news conference after a luncheon speech to the Canada Grains Council in Winnipeg June 14.
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“The (Canadian Wheat) Board is now in the court of the other (export subsidies). The burden of proof is on them.”
Fischler said the EU is offering to phase out all of its export subsidies and believes a deal can be reached this July, but all of its WTO trading partners will also have to make sacrifices to assure “parallelism.”
For the Canadian government that means putting the CWB on the table, because that is the only major issue of conflict between Canada and the EU, Fischler said in an interview.
“With Canada there is one open discussion, and this is the interpretation of parallelism for the abolition of export subsidization,” said Fischler, explaining why the EU insists the CWB sacrifice some of its powers.
Fischler said the EU demands that the CWB give up its government-guaranteed financing and credit, because those have the same effect as export subsidies.
The EU wants to see the elimination of the federal government’s guarantee of pool accounts.
“Without export subsidies or export credits, what point is there to keep the government guarantee for losses on the export monopoly,” he said.
The EU is not insisting the CWB be stripped of its export monopoly, but it is suspicious of the monopoly and is demanding that the board prove it is not distorting trade.
“They have to prove that there are no export subsidies involved,” said Fischler.
“I’m not against the monopoly as such, but everywhere you have a monopoly, you need rules that guarantee that the monopoly power is not misused.”
Canadian Wheat Board chair Ken Ritter, who sat with Fischler at the luncheon, said in a later interview that he doesn’t believe the EU has the right to complain about the wheat board’s financing and credit. Prairie farmers have already sacrificed far more than European farmers for the sake of trade.
“European farmers receive two and a half to four times as much as Canadian farmers (in government support),” said Ritter.
“In the last round we gave up the WGTA.”
And he said the federal government’s guarantee of the wheat board’s payments to producers had little overall impact, since last year’s $85 million deficit was the first government top-up in over a decade.
“It’s minuscule…. It’s a talking point for him,” said Ritter.
“It happened once in 12 years.”
Fischler was not moved by that argument.
“Very often or not, but it happens. We had also no export subsidies for wheat the last two years. This is not an argument,” said Fischler.He said the EU is not concerned about Canada’s supply managed industries because they restrict supplies of products and therefore reduce trade surplus problems.
Generally, Fischler thinks Canada and the EU could easily agree on a new world trade deal.
“I think it would not be difficult to have a common position between Canada and the European Union,” said Fischler, noting greater problems between developing and developed nations.
“They are rather close.”
Federal agriculture minister Bob Speller, who was later that day meeting with Fischler, said the EU and Canada need to push the world toward fairer trading rules.
“We need an international trade agreement that lowers export subsidies, one that does not just lock in the inequities that are now in the trading system, one that in fact makes it fair to everybody, and one that makes fair market access for everyone,” said Speller.
“We need to do better as trading partners to make the rules more fair.”
