VANCOUVER – Dairy farmers who harbored doubts that the industry is about to enter high-risk times in the next round of world trade talks should have no doubts at all following last week’s national Dairy Farmers of Canada convention.
Speaker after speaker warned that Canadian dairy protection and export policies will be targets when other countries sit down at World Trade Organization talks scheduled to start late next year.
“You can expect the U.S. dairy industry to follow a hard line with respect to international trade issues over the next several years,” Jerome Kozak, chief executive officer of the American National Milk Producers’ Federation, told the DFC meeting Jan. 20. “The resumption of WTO agriculture negotiations in the year 1999 offers us an even more important opportunity to broaden and deepen the current WTO reform program.”
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Meanwhile, Canadian trade negotiator Mike Gifford said he expected Canada’s two-price system to be a target, as some countries try to equate it with export subsidies.
And led by the United States, Canada’s high import tariffs will be under pressure for slashing, he said.
“There will be an open, consultative process and a continuing dialogue will ensure no surprises.”
It all led DFC chair Barron Blois from Nova Scotia to fret that the next trade talks will be a perilous time, since he questioned the federal government’s commitment to the industry.
“I, for one, am scared to think what will happen in the next round of the WTO negotiations if the federal government is allowed to ignore the needs of the industry,” he said.
Meanwhile, Kozak vowed that as U.S. producers continue to see their government support and prices fall, they will be aggressive in pressing their government to continue the challenge to Canada’s milk pricing policies, which allow milk for export products to be priced well below domestic prices.
He said U.S. prices are falling toward world prices and farmers there want to make sure other countries like Canada, with prices still propped up, do not take advantage of the American market.
A decade ago, U.S. domestic prices were as much as 70 percent above subsidized world price levels. “We project it to shrink to about 10 percent by the end of the decade.”
This reality is why Americans are challenging Canadian export price policies. The U.S. likely will take the issue before a WTO trade disputes panel this winter.
That dispute is being watched in Brussels, where the European Union is considering a similar two-price system for dairy.
