The World Trade Organization has confirmed that Canada has achieved the status of farm aid boy scout.
In a trade policy review of Canada published in December, WTO economists said their most recent comparable farm income support data is valid to the end of 1997.
In that year, Canada was credited with paying $522 million worth of trade-distorting farm and food subsidies – “well below its WTO commitment level of $5 billion for the period in question.”
That same year, the WTO credited Canada with paying $950 million in so-called “de minimis” support, which is worth less than five percent of the value of the commodity or that isn’t product specific.
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Canada was also credited with paying $1.2 billion in so-called “green measures” that do not distort trade.
The WTO noted that as late as 1999, Canada still was a minor subsidizer compared to other industrialized nations.
The Liberal government has bragged that it has increased Canada’s basic safety net spending since 1997 by 85 percent after sharp cuts in the previous two years.
The WTO said the trend to higher farm supports has been world-wide, increasing $30 billion (US) and almost 10 percent among countries of the Organization for Economic Co-operation and Development.
“Canada’s share in that total is minor in absolute terms, support relative to receipts averaging 20 percent compared with an OECD average of 40 percent.”
On the supply management side, Canada is less of a liberalization leader.
In 1995, Canada changed its quantitative restrictions on imports of dairy, poultry and eggs into high tariff rate quotas as it was required to do under the last WTO deal.
The organization said some of Canada’s tariffs, applied against imports that were above required access levels, are among the highest in the world.
“The out-of-quota tariff rate is generally prohibitive and may act as a de facto quantitative restriction.”
And by its measure, which includes regulated higher consumer prices as a form of subsidy, the WTO said dairy is one sector in which Canadian support rates are higher than the OECD average.
“In 1996 … nearly $500 million (Cdn) was spent in supporting prices of dairy products alone,” said the WTO report.
“In 1999, the OECD’s producer support estimate for milk reached 58 percent, compared with an OECD average of 57 percent, suggesting that over half of milk farm income is provided by budgetary transfers and price support.”
The report credited Canada with taking an aggressive stance at Geneva in trying to win agreement to reduce trade-distorting subsidies domestically and in export trade, while still protecting high support domestic sectors.
