Canada’s largest business lobby says it is time for the federal government to sacrifice some tariff protections enjoyed by supply managed sectors in the interests of a new international trade deal.
“The time has come for the government to empower our officials with greater flexibility to negotiate,” Canadian Chamber of Commerce president Perrin Beatty wrote to prime minister Stephen Harper last week.
“It is neither realistic nor constructive for Canada to demand that other countries provide new market access opportunities for Canadian exporters while we refuse to accept any over-quota tariff cuts or tariff quota expansion for sensitive products.”
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Beatty, once a senior minister in three former Progressive Conservative governments, told the current Conservative prime minister that reducing tariff protections on dairy, poultry and egg products in the interests of a trade-liberalizing World Trade Organization deal would help encourage a deal, give developing country farmers new markets and reduce Canadians’ grocery bills.
“Our refusal to be more flexible undermines the entire fragile WTO negotiations,” wrote the CCC president. “It may frustrate the ability to reduce poverty in developing countries and encourage global economic growth.”
The government did not publicly respond and its official position heading into a meeting of WTO ministers in Geneva June 21-25 is that Canada’s supply management protections are non-negotiable.
However, defenders of supply management were quick to respond.
Bob Friesen, president of the Canadian Federation of Agriculture, said the chamber’s proposal is naïve.
“That’s just simply not the way this negotiation works,” he said July 7. “If we give something up, there is absolutely no guarantee that we get back anything in return.”
Liberal agriculture critic Wayne Easter wrote Harper to demand that he reject the CCC recommendation.
“I would encourage you to immediately dissociate yourself from the position laid out by the Chamber which is nothing less than an unprecedented attack on our supply management system that has proven to be effective for both farmers and consumers,” the Liberal MP wrote.
Beatty, who for 21 years as an MP represented a rural Ontario riding in which supply managed farms are prominent, said the CCC and the 175,000 businesses and organizations it represents would support the government if it modified its bargaining position “to maintain our ability to support the supply managed parts of our agricultural sector while adapting to a world that reduces these support mechanisms and fosters greater competition.”
He said the vast majority of farms in every province depend on export markets and it is improper in a trade liberalization negotiations to defend tariffs as high as 298.5 percent for over-quota butter when the real goal is to open markets.
“The gain that these (export-oriented) farmers will realize from a successful Doha round, as well as the benefits that Canadian consumers in general will enjoy, far outweigh the costs of modified tariff charges to supply managed commodities,” Beatty wrote.
He cited a report from the conservative Montreal Economic Institute that supply management protections allow prices that cost a Canadian family of four $300 more annually for groceries.
