American proposals at World Trade Organization talks that have been lauded by Canadian negotiators for breathing new life into stalled negotiations would be bad for Canadian farmers and should be rejected, says the president of the National Farmers Union.
Stewart Wells said domestic subsidy cuts proposed by the Americans would have almost no effect on actual U.S. farm spending, but would force Canada to cut spending on base programs like crop insurance and advance payments.
“Other countries may be playing a shell game with proposals that really wouldn’t affect them much but Canadian farmers would lose,” he said. “The WTO is about increasing trade and not about making farmers or other producers better off. We have always said if the outcome on the table does not improve farm incomes, we should not sign on.”
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The United States has proposed domestic support cuts that would hit Japan and the European Union the hardest, force a 60 percent reduction in American allowable spending and impose cuts of less than 40 percent on countries like Canada.
However, under WTO rules, U.S. spending is far below what it is allowed so a 60 percent cut would barely cut into actual spending, if at all. The Canadian Federation of Agriculture analysis is that depending on how it is applied, the U.S. proposal could allow an increase in U.S. farm support spending in the early years of the deal, while Canadian actual spending would be cut.
Wells said based on briefings he has had from Canada’s trade negotiators, concessions such as the end to underwriting Canadian Wheat Board losses or export financing costs have been promised without any analysis of what it will costs Canada.
The NFU president, who has endorsed a summer report from Liberal MP Wayne Easter that argues chronic declines in farm income is the result of weak farmer market position, said Canada’s embrace of the need for a WTO deal flies in the face of farmer market power.
“WTO deals are all about increasing trade whatever happens at the farm level, increasing the power of the traders,” said Wells.
