Costly game of chicken – Opinion

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Published: March 15, 2007

AN EXPENSIVE and risky game of “who will blink first” is being played out in Canadian agricultural trade politics these days and thousands of farmers are the pawns.

The issue is how Canada should prepare for the increasing likelihood that any World Trade Organization deal will include reduced protection for Canada’s supply managed sectors.

The problem is that little preparation is being made as government and industry leaders engage in a stand-off over which side will be willing to accept the political blame for conceding the obvious – that plans for coping with increased competition and lower over-quota tariffs should be in the works.

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As government makes necessary cuts to spending, what can be reduced or restructured in the budgets for agriculture?

A high-level test of wills over blame avoidance is unfolding.

It does not exaggerate the point to say that the future health of the multibillion-dollar supply managed agriculture sector, Canada’s most consistently profitable, is at stake.

Canada’s Conservative government deserves credit for conceding what other political parties undoubtedly know but have refused to acknowledge – if there is a WTO agreement, it will include reduction in support for sensitive sectors like Canada’s dairy, poultry and egg industries.

The government says for the good of the overall economy, Canada would sign any such WTO deal.

Logic would suggest that if the government accepts that reality, it should adjust its trade negotiating policy to try to minimize the size of the cuts and their impact.

But no, Ottawa says it can’t do that because industry leaders won’t let it.

Pardon?

It goes like this.

Sixteen months ago, agriculture minister Chuck Strahl stood with all other MPs to unanimously support a mischievous pre-election Bloc Québecois motion that the government must refuse to sign any WTO agreement that undermines supply management protections in the slightest.

Supply management leaders continue to insist he live by that Nov. 22, 2005 vote.

Strahl knows it is poor policy and an unattainable negotiation goal but insists his hands are tied unless the industry agrees to capitulate.

Opposition MPs who know better would pounce if Strahl wavered.

“OK, those are marching orders but is it really in your best interests?” Strahl asks. “It is inconceivable that we would walk away from the WTO so take that as your first gospel truth. Then the question is, how do we move ahead to look after your interests?”

On the other side of the standoff, supply management leaders undoubtedly know in their heart of hearts that their current stance of “no compromise” is a losing proposition if there ever is an international trade deal.

But they want the government to carry the political baggage (and likely compensation obligation) for agreeing to compromise.

Meanwhile, producers on the front lines who have invested millions of dollars in quota, buildings and equipment continue to hear the message that governments will defend supply management to the end.

What they are not hearing from their leaders is the more clear and honest message that defending to the end is not the same thing as preserving.

Governments and trade experts already have concluded that only a WTO collapse will preserve supply management protections as they are.

If farmers were clearly told that, surely they would expect negotiators to try to minimize the damage, whoever gets the blame for showing leadership.

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