OTTAWA – The Canadian Federation of Agriculture is warning that the federal government must not bargain away any farm protections to the Americans in the new year.
“We have critical issues to resolve with the U.S. over the next few months and going south on bended knee is not the way to do business,” CFA president Jack Wilkinson said. “There is no room to give.”
In 1994, Canadian and American negotiators will be trying to work out a deal on tariff levels that will apply to American product imports that could compete with supply managed products.
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Canada is arguing that tariff levels filed in the recently-completed General Agreement on Tariffs and Trade (GATT) should apply between Canada and the United States. The tariffs range from 351 percent on butter and 326 percent on ice cream to 280 percent on chicken and 193 percent on eggs.
The Americans are arguing that rules set in the 1988 free trade deal should be the order of the day, requiring that those tariffs be abolished by 1998.
Wilkinson said the danger is that in negotiations with the Americans, Canada might take the GATT tariff levels as an opening point and settle on a lower level of protection.
“We tend to be boy scouts on this and we have no room for compromise,” Wilkinson told reporters Dec. 21 after the last CFA executive meeting of the year. “We have no room to manoeuvre.”
Agriculture minister Ralph Goodale repeated to reporters the government’s view that GATT rules will prevail over FTA rules.
Confident of result
“I have every confidence in the Canadian position and will be working hard to get the result that we expect should be achieved,” he said outside the last cabinet meeting of the year, Dec. 22.
He was supported by Ottawa trade consultant Gordon Ritchie, one of Canada’s principal negotiators during the 1987-88 free trade negotiations.
“(The American argument) is patently absurd,” Ritchie said in a year-end trade report from his firm Strategico Inc. “In agreeing to tariffication, both Canada and the United States have accepted the GATT schedule for tariff reduction for those commodities previously protected under GATT Article 11.”
However, he was less certain that American complaints about high tariffs on ice cream and yogurt might not be upheld. Several years ago, the U.S. won a GATT trade disputes panel decision which stated that ice cream and yogurt were not protected by Article 11 border quota protection.
The U.S. is arguing that the ruling means Canada cannot now put high tariffs up against those products. Ritchie said the American position is at least “arguable.”
This will be unwelcome advice for dairy farmers and dairies who fear open import competition from lower-priced American ice cream and yogurt.
Meanwhile, Wilkinson said the CFA continues to request a meeting with prime minister Jean ChrŽtien to outline Canadian farm fears about U.S. negotiations.
He said the CFA has been trying to arrange a meeting since the Oct. 25 election.
