Federal government defends supply management at NAFTA

Canada will continue to defend its supply management system for dairy in the face of American demands for greater transparency and access in a renegotiated North American Free Trade Agreement.

Agriculture minister Lawrence MacAulay said Oct. 16 the Canadian government and its negotiators remain firm in their support.

In a conference call from Europe, where he was helping launch the trade agreement with the European Union, MacAulay said supply management is an excellent system that warrants defense.

“It’s a model for the world and that’s in fact where we are,” he said with respect to the negotiations. “To deal with anything else is simply a non-starter.”

The Americans tabled their dairy demands last weekend, calling for the elimination of Class 7 milk. The class was implemented to make Canadian dairy ingredients, such as protein concentrates and milk powder more competitive with American imports but has resulted in backlash from south of the border.

Initially, the proposal didn’t include greater market access but on Oct. 16, media outlets began reporting that those demands had been made.

One report suggested the U.S. wants Canada to give up to 10 times more than it had promised in the Trans-Pacific Partnership talks. If the TPP had been implemented it would have seen imports gain 3.25 of market share.

Another said the request is to phase in five percent more market access each year, which would lead to quota-and duty-free trade in all supply managed sectors in 10 years.

Dairy Farmers of Canada spokesperson Isabelle Bouchard said any demands are “outrageous” and not surprising.

“We do not see supply management as being on the table,” she added, referring to federal government support.

The fourth round of negotiations was to conclude Oct. 17.

Meanwhile, MacAulay was in Europe at the G7 meeting of agriculture ministers where he also held talks with ministers from Italy, Germany and the EU on other trade issues.

Among them were outstanding issues on beef and pork exports from Canada, as well as country-of-origin labelling for durum and pasta in Italy.

“We have rules with the CETA agreement and they have to follow the rules,” he said with regard to durum.

“Purchasers of our durum wheat are somewhat concerned too. I indicated to them that they need to also put pressure on the government that if you’re going to have a regulatory process you have a regulatory process,” MacAulay said.

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