Canada has triggered a nasty beef trade dispute with Australia by announcing it is cutting Australia’s share of the beef import quota this year.
Canadian trade officials say it is a case of use it or lose it.
Australia complains it is a unilateral Canadian decision that runs counter to freer trade. There have been official protests to Canadian officials and threats of a legal challenge.
Canadian trade minister Art Eggleton last week said he would not reverse the decision.
Last year, Australia did not fill its 42,000 tonne quota. This year, it is being cut back to 35,000 tonnes.
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“The fact is, they haven’t used all their beef quota,” Eggleton said. “Other countries have wanted to be able to get access to the Canadian market, Uruguay for example. We asked the Australians to help facilitate that if they weren’t using the quota but they wouldn’t co-operate. If they are not using it, why shouldn’t we give it away?”
Australian high commissioner Frank Murray thinks he has an answer – liberalized trade.
Quotas called the problem
“My trade minister is not happy with the Canadian decision to cut the quota,” he said. “We don’t think there should be a quota at all. We are not happy it has been unilaterally decreased. We are worried this could be a precedent.”
He said Australia did not fill its quota last year because there were ample supplies and low prices in North America. “The Australian side couldn’t get the prices.”
The Canadian decision has created a flurry of criticism in Australia.
“This latest action sends all the wrong signals,” Australian trade minister and deputy prime minister Tim Fischer said in a statement issued in Canberra. In a world moving toward more liberalized trade “Canada’s decision is a sad, backward step.”
Could go to WTO
He said Australia could raise the issue at the World Trade Organization if Canada does not back down.
It was a threat scoffed at by government trade officials in Ottawa.
“There is no basis for a WTO challenge,” said a trade specialist, who would speak only off-the-record because it is “a delicate issue” between the two countries. “We are following the rules.”
Under the world trade deal implemented in 1995, Canada established a 76,000 tonne quota for beef which could enter the country without tariff.
Informally, Australia was allotted 42,000 tonnes of the quota, New Zealand got 29,000 tonnes and 5,000 was left to be filled through competition.
Eggleton said Australia brought this cutback on itself when it refused to temporarily give up some of its allotment, even though it would not be filled.
“We asked for their co-operation with respect to under-utilization and they said ‘no’ so we made the cutback,” he said.
