Has Canada dealt away dairy quota rights to keep a seat at the Trans-Pacific Partnership talks? BY SEAN PRATT
Canadian negotiators offered concessions on the country’s supply management system during the recent round of Trans-Pacific Partnership trade talks in Hawaii, says an international trade lawyer.
“Having put that on the table, it means that supply management is negotiable and what we’re now talking about are the numbers,” said Lawrence Herman, principal in Toronto-based Herman & Associates.
“The principle has been established.”
The federal government has been tight-lipped about what took place in Hawaii at the end of July but Herman said he has a “variety of sources of information” that confirm trade minister Ed Fast made a significant move during the 11th hour of negotiations in Maui.
“It’s clear that Canadian trade minister Mr. Fast tabled an offer to increase Canada’s dairy quotas to allow a greater degree of imports of dairy products,” he said.
“The fluid milk offer was deemed short of the mark by New Zealand and the U.S. in particular but they didn’t reject it, so it’s on the table.”
Herman said Fast also made concessions on the poultry side of the supply management system but he had no details on what was offered.
There were no concessions on eggs because none of the TPP parties are pushing for expanded access to Canada’s egg market.
Canada offered to expand the volume of dairy products that can enter the country tariff-free under tariff-rate quotas. Access will be measured in fluid milk equivalent and includes milk, butter and cheese products.
“It won’t be given up all in one blow. It will be phased in.”
Herman said the federal government has spent months working on a compensation package for affected supply management farmers.
Dairy Farmers of Canada was contacted for this story but was unable to make a spokesperson available.
This is the first time Canada has offered to negotiate supply management during multilateral negotiations and the first concessions involving milk and butter.
Herman said the genie is out of the bottle.
“Even if the TPP isn’t concluded successfully, once Canada has put (supply management) on the table, it’s not going to be possible to keep it off in any future negotiations.”
Herman wasn’t surprised that Canada finally caved in to pressure from the U.S., New Zealand and Australia because there is too much at stake for other sectors of agriculture.
Claire Citeau, executive director of the Canadian Agri-Food Trade Alliance, said 65 percent of Canada’s $56 billion in agri-food exports is sold to TPP nations.
“We see the TPP not only as an opportunity to maintain our global competitiveness, but as well to expand market share in key countries, notably Japan, Vietnam and Malaysia,” she said.
The alliance was discouraged that a deal wasn’t reached in Hawaii largely because of disputes involving the automobile and pharmaceutical sectors.
“Negotiators worked really hard and we got the sense that they made a lot of progress and cleared out a lot of the technical issues, leaving only very sensitive political issues,” said Citeau.
She is optimistic a deal will be concluded in the coming months.
Jim Laws, executive director of the Canadian Meat Council, said Canada cannot afford another South Korea debacle.
The U.S. was able to steal market share away from Canada’s beef and pork sectors because it signed a free trade agreement with Korea long before Canada did.
“We wouldn’t want to see that happen with Japan. It’s a billion dollar market for meat,” Laws said.
Herman said the framework of a TPP agreement needs to be in place by the end of September due to time constraints surrounding the pending U.S. federal election.
In the meantime, negotiators from Canada, the U.S., New Zealand and Australia will continue hammering out details surrounding access to Canada’s dairy market.
There will be considerable pressure on Canada to increase its tariff-rate quota offer while Canada will push for a longer phase-in period.