The chair of the World Trade Organization’s agricultural negotiations has signaled that any deal will require reduced supply management protection and an end to the Canadian Wheat Board monopoly.
In early January, New Zealander Crawford Falconer issued a set of new working papers indicating where he thinks negotiations will end up if there is a deal.
He suggests sharply reducing the ability of governments to provide trade or production-distorting domestic subsidies, universal cuts in protective tariffs and an end to export subsidies by 2013.
On the sensitive products file that includes Canada’s protected dairy, poultry and egg sectors, he suggested overquota tariff cuts at least one-third the size of general tariff cuts if not more, increases in the amount of tariff free product allowed into protected systems and a restriction on the number of products that can be protected.
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Canada’s supply managed sectors, supported by the Conservative government, insist there be no overquota tariff cuts, no expansion of guaranteed market share for imports and no restriction on Canada’s ability to protect all its supply managed products from unlimited import competition.
Falconer also suggested that along with ending all forms of export subsidies, monopolies for state trading enterprises be abolished.
He will gauge response to his latest proposals and issue revised texts in early February.
Canada’s agricultural export lobby represented by the Canadian Agri-Food Trade Alliance is convinced a deal is possible this year.
CAFTA executive director Keith Lancastle said time he recently spent in Geneva convinced him negotiators are serious and major players such as Japan and the European Union have made compromises.
“I would say these countries must believe there is a chance for a deal or they would not be showing this flexibility,” he said.
“I’m hopeful. The major players are leaving their senior people there to negotiate and I believe the American administration really wants a deal this year.”
He said there is a possibility ministers could be called to Geneva for a session of make-or-break negotiations and compromise in March.
In Canada, reaction to Falconer’s latest proposals depended on self-interest.
Primarily exporting sectors said they saw positive signs. Supply management supporters warned that the proposals are unacceptable.
“We’re not comfortable with where supply management would fit under this,” Dairy Farmers of Canada president Jacques Laforge said.
“I think with a strong Canadian dollar, if world dairy prices started to go down we really wouldn’t be able to predict imports or control supply and that wouldn’t be supply management.”
Canadian Federation of Agriculture president Bob Friesen said in a statement that Falconer’s proposals would be helpful for many export sectors and would force high-spending domestic subsidizers like the United States, the European Union and Japan to cut the most.
However, he objected to the proposals to weaken supply management protection and end the right to have state export monopolies.
“Slowly we are seeing real progress in these trade talks,” he said.
“We have moved closer to a good outcome for our exporters and now we need to push for movement for our sensitive sectors.”
As well, he said the wheat board monopoly is an issue for domestic debate and not WTO rules.
Federal agriculture minister Gerry Ritz immediately said the sensitive products proposals were unacceptable to Canada, although he lauded the export suggestions. He did not mention the state trading enterprise monopoly issue, although in the past the Conservatives have agreed it is not an issue to be settled at the WTO even though they oppose the monopoly.
Ritz said the government would continue to defend supply management at the talks.
