RALPH Goodale, as the newly minted Liberal agriculture minister nine
years ago, quickly came face-to-face with the conundrum of Canada’s
membership in the Cairns Group.
As a founding 1986 member of the trade coalition formed in Cairns,
Australia, to fight for an end to a crippling export subsidy war
between the United States and the European Union, Canada and other
Cairns members were united in calling for an end to export subsidies,
as well as reductions in trade-distorting barriers and domestic
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subsidies.
But as he traveled to Geneva for the final tense days of negotiations,
Goodale had another Canadian objective – maintenance of the supply
management system for dairy, poultry and egg sectors.
On that, Canada and Cairns had parted ways. Other members of the group
saw supply management import quotas as just another trade barrier to be
blown up.
When Goodale got into the negotiating room, as he recounted later, he
found himself alone against every other member of the General Agreement
on Tariffs and Trade – 125 to one, or thereabouts.
Canada lost the fight to save the import quotas and settled for high
tariffs.
Being part of the Cairns Group did not save Canada from isolation on
that key issue. However, it may have helped push major GATT players to
a deal that at least put caps on trade-distorting domestic support and
export subsidies.
That’s the dilemma facing Canada’s agriculture and trade ministers as
they try to decide whether it is worth it to stay in Cairns through
this trade negotiation.
This time, the gap between the Cairns wish list and Canada’s position
is even wider. Cairns is targeting those high supply management tariffs
for elimination.
Canada cannot agree.
Cairns also wants to sharply cut domestic support programs, to an
extent that Canadian officials say crop insurance and Net Income
Stabilization Account programs would be destroyed. Canada cannot agree.
It wants to eliminate export subsidies. Canada can agree.
In light of the Cairns meeting last weekend when agriculture minister
Lyle Vanclief committed to working with the group, Canada has decided
there is more to be gained by staying than getting out.
After all, Cairns does represent the most credible middle-power force
within the World Trade Organization pushing for the maximum possible
reduction in trade distorting policies.
It is a position strongly supported by Canada’s agricultural exporters’
lobby that has lost patience with Canada’s two-sided position. Groups
like Grain Growers of Canada and the Canadian Agri-Food Trade Alliance
are more comfortable with the Cairns black-and-white prescription than
Canada’s ambivalence.
Still, Canada is unlikely to abandon its “balanced position,” supported
as it is by the Canadian Federation of Agriculture and the powerful
supply managed sectors.
So Canadian officials warn that there may come a time when supporting
Cairns would undermine the credibility of Canada’s self-interest. At
that point, Canada reserves the right to pull out and stand alone.
The basis of the threat, presumably, is that if you are going to lose
anyway, better to go down with a shout than a whimper.
