Leaders of Canada’s dairy supply managed sector are failing to prepare their farmer-members for the inevitability of tariff reductions after the current world trade negotiation, says Canada’s former chief agricultural trade negotiator.
Mike Gifford helped negotiate the last world trade deal in 1993 that ended Canada’s import restrictions based on quantity limits for goods in supply-managed sectors in favour of tariff protections, which are now targeted for reductions. He said dairy leaders then knew Canada was isolated on the issue but by refusing to accept defeat beforehand, they limited Canada’s ability to get concessions.
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He said the same scenario is playing out this time as dairy farmer leaders insist the government accept no reductions in over-quota tariffs while telling farmers that any reduction in tariffs, which range between 200 and 300 percent, will be a serious blow to the supply management system.
In a published analysis, Gifford argues tariff cuts are inevitable and the industry could adjust to a one-third reduction.
“I’m disappointed that the industry collectively isn’t trying to have a more realistic debate on what is coming, how they can adjust and what they need as a minimum,” the retired trade negotiator said.
He argued that acceptance of some over-quota tariff cuts should happen before World Trade Organization ministers meet in Hong Kong in December to try to agree to the outlines of a new WTO deal. That would allow Canadian negotiators to try to win concessions rather than being forced in the end to accept trade rules that others have negotiated.
“To go into Hong Kong with a repeat of the last round of no compromise as a position is in my mind a recipe for a not successful outcome,” Gifford said.
He suggested that many dairy leaders know that tariff cuts are inevitable but are reluctant to tell farmers lest they be seen as having failed to defend industry interests.
“They are like all politicians,” said Gifford. “I would imagine there are some dairy leaders who are very aware of the reality of the negotiation but I would imagine they are also very much aware that if they want to be elected next time around, it will be difficult if they are perceived to have sold out.”
Dairy Farmers of Canada leaders quickly fired back, arguing there is no certainty to Gifford’s view of the inevitability of tariff cuts and denying they are keeping farmers in the dark.
“I am a so-called dairy industry leader and I can tell you no one has privately told me that tariff cuts are inevitable,” DFC British Columbia director Wally Smith said from his Duncan,
B.C., farm. “No one knows what the outcome will be, whether there will be an outcome or when it will happen. As far as I know, the balanced position we have been supporting is still in play and has some support.”
Smith said Gifford as a private citizen is entitled to his opinion but he is wrong to suggest dairy producers do not understand what is happening at trade talks.
“I don’t think he’s correct that producers are not prepared,” he said. “I’m not convinced that producers don’t know what’s going on. I always advise them to make their business decisions based on a realistic appreciation of what is happening in the market.”
