ST. JOHN’S, N.L. – Federal agriculture minister Chuck Strahl figures it will be years before World Trade Organization negotiations get life again and he sees little good news in that prediction.
The United States will concentrate on writing a new high-spending farm bill and bilateral trade deals that open markets but do nothing about domestic subsidy levels so there could be increased trade disputes.
“This is a bad news situation for us,” Strahl said. “I’d say for us, the future is definitely pursuing more bilaterals but they do not deal with all the issues multilateral deals do.”
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Listening to provinces and farm groups react to the Doha meltdown, Strahl also will be facing domestic demands for increased spending to match the competition, now that the promise of reducing foreign subsidies through a WTO deal has been thwarted.
“There is no doubt that if U.S. subsidies go up, as they can without a new WTO deal, then the federal government will have to be prepared to provide bridge funding that keeps Canadian producers competitive,” said Dawson Creek, B.C., producer Jim Smolik, president of Grain Growers of Canada.
“Prices are depressed by foreign subsidies, Ottawa is the negotiator at WTO and it is their responsibility.”
Canadian Federation of Agriculture delegates at the group’s summer semi-annual meeting also said the federal government must ramp up its subsidies to keep farmers competitive against foreign subsidies.
“We have been told repeatedly by government that they cannot compete with foreign subsidies but a WTO deal will force them down,” CFA president Bob Friesen said July 28 after the federation meeting. “For now, that is off the table so they have no option but to step up.”
Strahl also will be hearing from the Ontario Federation of Agriculture that the Canadian government should now become more aggressive in using WTO rules to challenge American subsidies as trade and production distorting.
“There will not be a deal to reduce those so the government should become more assertive in using existing tools to defend our farmers,” OFA president Ron Bonnett said.
However, the view that the suspension of WTO is a disaster was not universally shared.
Newfoundland natural resources minister Cathy Dunderdale, responsible for agriculture, opened the CFA meeting July 27 by reminding delegates that supply managed dairy, poultry and egg operations are the mainstay of the province’s $500 million industry.
She thought a successful deal would inevitably have undermined supply management tariff protections.
In the audience was Nova Scotia chicken producer David Fuller, chair of Chicken Farmers of Canada.
He, too, has warned that over-quota tariff reductions proposed at WTO talks would kill his industry but Fuller does not agree a breakdown in talks is good news.
He said there is a danger that a small group of WTO countries dubbed the G6 – the United States, European Union, Japan, Brazil, India and Australia – will work out a deal that will become the template for a resurrected negotiation.
On sensitive products and over-quota tariffs, that deal might not reflect Canada’s interests.
“If they get together, we will not be there to defend our interests,” Fuller said. “As long as the formal talks were alive, all countries were there and Canada could continue to press our point of view. We have no say in the G6.”
