NAFTA talks cordial around agricultural issues

Negotiators have agreed to set aside supply management and focus on issues such as sugar and meat testing

OTTAWA — As the seventh round of North American Free Trade Agreement talks concluded in Mexico City, Canada’s chief agricultural negotiator said the negotiations remain cordial.

That’s likely because in agriculture there are more technical than political issues.

Frederic Seppey told the recent Canadian Federation of Agriculture annual meeting that if Canada chose to engage on American demands to dismantle the supply management system for dairy, poultry and eggs, the meetings might be more animated.

“We agreed to put that aside and to focus on where we can make progress on the classical issues and modernization issues,” he said in an interview.

Classical issues include the longstanding concern about the American requirement for 100 percent verification and testing of Canadian meat products. Seppey said Canada is pushing to move that along.

“We are also pushing on issues such as sugar,” he said. “We have now very limited market access and that existing market access is undergoing a lot of challenges.”

Another long-standing issue is the American concern about Canada’s grain grading and variety registration systems.

Seppey said there were intensive discussions about this during the seventh round but they were hampered by the Americans’ inability to substantiate the problem.

The meat issue is quantifiable as $7.1 billion in trade, he said.

“We are simply asking the U.S. to explain how it is affecting their interests,” he said with regard to grading and registration.

Modernization issues deal with establishing rules around biotechnology and new techniques such as gene editing.

But Seppey said the highly sensitive political issues are obviously the more difficult.

Earlier at the CFA meeting, a Dairy Farmers of Canada delegate asked why discussion about supply management is always left to the end of trade talks.

Seppey said it isn’t a question of being left, but rather whether engaging on it is prudent.

“When the United States is simply calling for the elimination of our system and the political statement (from the Canadian government is) very clear, it’s very difficult to engage,” he said. “If we would put a trade proposal forward on sugar they would react the same way.

“They stick to a position that we simply cannot engage on.”

He observed that Canada spent years negotiating the matter with the United States in the former Trans-Pacific Partnership talks and then the U.S. backed out.

The U.S. had been late appointing a chief agriculture negotiator. Asked whether that indicates that the sector really isn’t all that important to the U.S. in NAFTA, Seppey said that idea has some merit.

The concerns are really around steel, textiles, automobiles and manufacturing.

And, most agriculture groups in the U.S. support NAFTA and don’t want to put it at risk.

On most commodities, Mexico is their most important agricultural market and if they withdraw from NAFTA, tariffs in Mexico will go up significantly. They would rise in Canada also, but less so.

“In that regard, there’s only dairy,” he said. “The poultry guys in the U.S. are not pushing for more market access. The dairy guys are very upset about our system but we are also their second largest export market so in the large scheme of things, how important it is to get after the elimination of the system in Canada, when they have it in sugar, I would argue.”

Meanwhile, the CPTPP was scheduled to be signed in Santiago, Chile March 8. Seppey said Japan could ratify by the end of August and Canada could ratify in early 2019 to make sure it is part of the initial six participants. Taiwan and South Korea are already expressing interest in signing on.

Seppey said despite recent negotiation failures, a strong World Trade Organization is still important because it can hold trading partners to domestic support rules.

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