Canada’s stand on agricultural trade liberalization at the World Trade Organization is no more an impediment to an agreement than any other country participating in the Doha round.
Indeed, there is so little agreement in the process, now in its final, critical stage, that it is in danger of collapsing.
Canada’s efforts to preserve supply management might not sit well with some, but the issue pales compared to the impasse between the European Union and the United States.
The U.S. wants Europe to improve market access through larger tariff cuts, which the EU says it would agree to only if the U.S. agrees to steeper cuts to its domestic support programs.
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The U.S. wants tariff cuts for developed countries of 66 percent, with almost no special treatment for sensitive products. The EU has offered a 39 percent cut with eight percent of sensitive products protected. The U.S. replies that would not benefit world trade.
The EU wants the U.S. to cut domestic support by 70 percent instead of the 60 percent offered. The EU says the 60 percent cut might sound good, but it is from WTO permitted spending, not current spending, and it would allow the U.S. to maintain its annual spending of about $21.5 billion US.
The G-20, a group of developing countries including Brazil and India, wants a 54 percent cut to tariffs and a one percent sensitive product protection.
There is much negotiation now on the sensitive product exemption, which interests Canada because it will determine the effect on supply management. The system of production quotas and tariffs on foreign imports protects Canada’s egg, dairy and poultry industries. The WTO discussion focuses on whether to increase tariff rate quotas, which is the amount of product that can imported before tariffs kick in, as well as on the overall level of tariffs.
Canadian negotiators are trying to get an agreement that would allow supply management to continue, and at the same time significantly lower tariff barriers.
This is not unrealistic. Most countries also have key sectors they want to protect while generally wanting improved trade access.
And preserving supply management has merit. It is the one sector of Canadian agriculture with some stability and that gets its money from the market, not subsidies.
It would be a weak tactic to volunteer to sacrifice this sector to supposedly add momentum to what may be only a modest agreement that allows the world’s main agricultural players, the U.S. and EU, to continue as they are with little modification.
Canada is a trading nation and we should press for an aggressive result from the Doha round.
But in the end, the agreement will be full of compromises, as all multinational agreements are, and until the end, Canada should press for the compromises it wants with vigour equal to the other players.
Bruce Dyck, Terry Fries, Barb Glen, D’Arce McMillan and Ken Zacharias collaborate in the writing of Western Producer editorials.
