Ag trade negotiators must uncover hidden supports

When talk in Canada turns to international trade, often the focus is on our systems such as supply management and whether we can or should preserve them.

Maybe it is a Canadian trait to look inward, be self-critical and say sorry.

But what about the other guys? Are they squeaky clean? Of course not. Almost every country has sectors it wants to protect.

A new research paper says Canada should become much more familiar with support programs in other countries and how they might distort trade.

So armed, Canada could put up a good offence to support its defense in current and future trade negotiations.

Rather than hand wringing over our supply management sector, Canada should aggressively push to get changes in other countries’ internal agriculture policies that give them unfair trade advantages.

A paper with the title Understanding Agricultural Support, produced by Agri-Food Economic Systems for the Canadian Agri-Food Policy Institute, points out that even with advances made under the World Trade Organization and bilateral trade deals, subsidies in other countries have serious negative implications for Canadian farmers.

While the most trade-distorting policies have been curbed, other types of domestic support have risen, a lot in some cases, causing surplus production that is dumped on the international market.

Countries that don’t have the environmental resources to properly produce all their own food still have policies to promote self-sufficiency, creating strains on their water, soil and wild lands.

These policies also limit trade opportunities for countries such as Canada with the environmental capacity to increase food production and exports.

The paper questions the sustainability of Asian livestock expansion that is possible only with huge imports of feed from the Americas.

China’s past policy of buying local production at higher than world prices has led to huge surplus stockpiles of grain there. It is now shifting to other types of support, and these new policies will have to be studied to determine their effect on trade.

The paper also notes that whole-farm payments to European farmers, which are decoupled from production and therefore not the target of current international trade monitoring, nevertheless have a big effect on production and prices for beef and dairy in the EU.

As well, it questions how the EU can increase pork exports when returns to farmers are below the cost of production and its production costs are higher than those in Canada, the United States and Brazil.

It also is suspicious of U.S. crop insurance subsidies for feedgrain. If they are not properly accounted for under U.S. WTO commitments, they could represent illegal competition for Canadian feed and livestock producers.

The paper goes on to recommend a strong analysis of American dairy policy to assess its fairness.

Clearly, the nature of government support for farmers around the world has changed since the WTO agricultural agreement in 1994, but the results can be just as unfair.

It is time to investigate the details of foreign domestic supports and their negative effects so that Canada can argue against them in future negotiations.

As the adage goes, the best defence is a good offence.

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