QUEBEC CITY – In the middle of the day July 30, Canadian Federation of Agriculture leaders took a break from their semi-annual meeting to call their provincial ministers of agriculture and trade with an urgent message:
The World Trade Organization negotiating framework deal being proposed in Geneva was unacceptable. Canadian farmers would lose. Canada should not sign and the provinces should send that message to federal ministers in Geneva.
The strategy failed. Trade minister Jim Peterson and agriculture minister Andy Mitchell accepted the framework agreement late July 31.
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In a briefing to CFA members, president Bob Friesen said the deal offered some better access to markets for exporters and an end to export subsidies, but would handicap Canada’s domestic policy.
It would make the Canadian Wheat Board monopoly negotiable and eliminate the government’s ability to guarantee CWB sales.
It would subject supply management protections to extreme negotiating pressure from other countries with an eye on Canadian dairy, poultry and egg markets.
It would lead to a reduction in the amount Canada and other countries can spend on farm supports without claiming them as trade distorting (currently at five percent of the value of production but slated through the deal to go down) while the United States and the European Union would be allowed to spend up to five percent of production value without challenge through the so-called ‘blue box’ category of spending.
By setting product-specific caps on subsidy levels, it would lock in the gap between higher subsidies in the U.S. and § compared to Canada’s levels and would limit government ability to spend money on a commodity-specific crisis, such as BSE.
Supporters of the framework say the commodity-specific subsidy caps with promised reductions are an important breakthrough in disciplining the big subsidizers.
When sleep-deprived Canadian ministers accepted the WTO deal along with 146 other countries, the CFA effectively lost its argument to the Canadian export lobby, which was pressing government to accept the deal.
The exporters see it as a chance to increase trade while disciplining Canada’s protected sectors and eroding a Canadian Wheat Board monopoly that offends their free-trade principles.
Peterson and Mitchell told reporters that Canadian negotiators will fight hard to defend interests that the text put under attack. Critics say the text will make that defence difficult, if not impossible.
