FOR THE small coven of Canadian farm leaders (and the journalists who cover them) that lives, breathes and obsesses over the importance and possible outcomes of World Trade Organization talks, last week brought three tempering messages.
May they be heeded, if for no other reason than to put a bit of balance and perspective into the debate.
Contradictory as they may seem, they all would contribute to building fences around WTO expectations and understanding of what really is happening and at stake.
Message 1: Former WTO agriculture negotiations chair Tim Groser came to Ottawa to insist that Canada’s dream of a WTO deal that exempts supply management tariffs from cuts really is fantasy.
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Of course there will be cuts in over-quota tariffs, he said, but contrary to the solemn predictions of federal politicians and supply management leaders, cuts and increased access do not necessarily mean the end of the system.
Don’t “over dramatize” the stakes, he advised, so producers do not over-react to the inevitable result.
It seems like reasonable advice. Even someone who believes in the wisdom and benefit of supply management and its need for predictable imports wonders if a 100 percent tariff would not be a strong enough barrier to imports.
Message 2: Dairy Farmers of Ontario chair Bruce Saunders sent a letter to Ontario dairy farmers warning them that threats to the system through WTO are real and they should temper their business decisions accordingly. Don’t bid up quota prices. Don’t go further into debt until the eventual rules are known.
Don’t expect the best.
This is a tremendous change from years of dairy industry leaders confusing their “no tariff cuts” position and political support for that position with the reality of what is happening at the WTO. It is an organization created in 1995 to reduce trade barriers.
Over-quota supply management tariffs are trade barriers, whatever industry leaders say. Negotiations mean tariff reductions.
While all that may sound logical, industry leaders supported by vote-seeking politicians have promoted the fiction that the supply management status quo can hold.
Saunders’ letter is an important beginning move from fiction to reality for many farmers who have been making business decisions based on leaders’ assurances of a status quo that will not be sustainable, barring a collapse of WTO talks.
Message 3: Groser also used his visit to Ottawa to do the WTO promoters a “reality check” favour. A deal to cut subsidies and import barriers will not make a quick difference in market access and prices.
As much of a free market fanatic as Groser is, he said that realistically, changes will be implemented over time and results will be incremental.
Trade rule-induced market improvements are not the ticket for those looking for instant gratification, he said. There will be no ‘eureka’ moment of unlimited sales and soaring prices.
It was an important counterpoint to the free trade theologians who preach that a deal will save a floundering industry.
Even if the skeptics can set aside questions about the numbers, a WTO deal is not an answer to income and price challenges in the medium term.
Groser, the WTO enthusiast, provided a useful injection of optimism deflation.
