Canada’s supply managed farm sectors should be preparing for the loss of a significant part of the tariff protection they now enjoy, says Canada’s former chief international trade negotiator.
Gerry Shannon, who led Canada’s negotiations at the last round of world trade talks which established high protective tariffs for dairy and poultry industries, said last week those tariffs will be a target when the next round of trade negotiations begins in 1999.
“Lest anyone think the current structure of tariffs, quotas and supply management … is more or less secure, let me assure you it isn’t,” Shannon told a poultry meat outlook conference May 8.
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He said the chicken industry’s future lies in forming alliances with exporting sectors, working out a common, defensible trade strategy and promoting exports rather than domestic protection.
“We need a national consensus on how to proceed,” he said. “There is no reason we cannot reconcile our domestic interests. And there certainly is no reason to believe that our only interest is with the domestic market.”
Tariffs on the chopping block
Shannon predicted the Americans will use the next World Trade Organization negotiations to attack Canada’s tariffs. He expects they will succeed in winning sharp reductions.
“That would be my presumption,” Shannon said in an interview. “I think there will be lower tariff levels when the talks end and there will be an accelerated reduction schedule as well.”
He said the U.S. will lead a concerted effort to ensure that Canada’s high protective tariffs are lowered to give dairy, poultry and egg imports more of a share of the Canadian market.
He also predicted Canada will make a reduction in export subsidies one of its major goals and he expects progress on that front as well.
Shannon urged the Canadian farm industry to become more united this time, creating a common, balanced position between exporters and domestic-oriented sectors that the government can defend in Geneva.
Between 1986 and 1993 when the last General Agreement on Tariffs and Trade negotiations took place, the Canadian government had what critics called a two-faced, inconsistent trade position.
On behalf of export sectors like livestock and grain, Canadian negotiators were instructed to try to win greater export access and to force other countries to reduce barriers.
On behalf of import-sensitive sectors like supply management, they were instructed to defend Canadian protection levels.
It led Canada to be isolated within the Cairns Group, led by free-trade-boosting Australia.
And it led the Americans to employ a strategy of picking off protection-supporting countries one by one. By the end of the GATT negotiations in December 1993, Canada was alone.
Canada’s position in the last negotiation was difficult to win, said Shannon, who has retired from a career with external affairs to become an Ottawa consultant.
“We were hampered in the past negotiations by the splits within agricultural interests in Canada.”
Unity in supply managed sector essential for trade talks, expert
“We were hampered in the past negotiations by the splits within agricultural interests in Canada.”
