International Trade Committee on June 12th, 2006

[The Chair, Conservative, Leon Benoit]

Thank you.

Mr. Easter, your time is up, but Mr. McCreery has indicated he'd like to give a short response.

[Liam McCreery]

Thank you, Mr. Chair.

Hello, Mr. Easter, how are you today?

[Wayne Easter, Liberal, Malpeque, PE]

I'm great, thanks.

[Liam McCreery]

That's awesome.

Let's just remind ourselves that on grains and oilseeds products, the products I produce, the tariff for products coming in is zero. We compete on that and we compete against subsidized product. When you talk about competing in a free way, look to the grains and oilseeds sector. We're doing it right now.

Let's be clear about what we're talking about at the WTO. There's been a lot of talk about who's isolated and who's not isolated. Let's make it absolutely clear to everybody in the room: on over-quota tariff rates, every country in the WTO has said there will be reductions, except for Canada. That, by definition, is absolutely isolating.

As far as TRQs being a way to open up markets, I think of our friends in Japan again. They have a TRQ in beef that's less than 10%, but they import close to half their beef. They could increase their TRQ and still not have any new access to the markets.

Clearly, the rest of the world has embraced all tariffs coming down. It's a question of how fast they come down, and there are two trains of thought. One is the general tariff reduction and one is the sensitive product tariff reduction. The rest of the world agrees to that; Canada is isolated and does not.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. McCreery.

To Monsieur Plamondon now for five minutes.

[Louis Plamondon, Bloc, Bas-Richelieu—Nicolet—Bécancour, QC]

My question is also about supply management.

Here is a brief history. On November 22, a motion was presented by the Bloc Québécois and unanimously adopted by the House of Commons. This motion contained a mandate, which was spelled out in three very clear paragraphs, for the chief negotiator at the WTO negotiations. During the election campaign, two or three debates were held on agriculture, including a major national debate, and every party clearly came out in favour of maintaining supply management and the fact that it was sacred.

Then, a week before or immediately following the election, Canada's chief WTO negotiator said that he did not feel bound by the unanimous decision of the House of Commons, which had determined that supply management was sacred. Who's in charge? The negotiator or the government? It was very surprising.

When the House returned, questions were asked, and last week, the minister said that he did not really support supply management, stating that Canada was only one out of 174 countries, that we could not always win and that we sometimes had to give a little.

When that happened, the Bloc Québécois contacted almost every agricultural association, at least in Quebec. Two days later, the minister was asked the same question and he replied that the government would protect and defend supply management, that his party had defended it in the past and that it would continue to do so. So the minister came back to his good intentions.

Do you get the impression that when Canada is sitting at the WTO table to negotiate, that it really defends supply management? And, in particular, does it explain what supply management is to other countries? I asked representatives from other countries whether they understood supply management in Canada, and they replied that it was similar to what exists in France. However, the two systems are completely different.

Officially, there is political will, but when we are at the negotiating table, it's a completely different story. Do you get the same impression? My question is a bit political.

[Jacques Laforge]

I think that it is a very political issue.

The negotiator's comments, which he made one week after the election, and which dealt with the motion adopted by the House of Commons, and what he said in January, were different because of the political situation.

The motion lays out very specific parameters which are to be used to reach an agreement. The government should take advantage of this motion to negotiate the best possible agreement in the circumstances.

I do not want to play politics. When we go to Geneva or to any other country to lobby, very few countries—only influential ones—are aware of how crucial supply management is to Canada.

We have to take political advantage of the situation to achieve the best results possible. That's not our responsibility. I don't want to throw the ball into the other party's court, but, in fact, it is up to the current government, through its negotiator, to reach that objective.

[The Chair, Conservative, Leon Benoit]

Okay. Did anybody else want to answer that question? Mr. McCreery.

[Liam McCreery]

It is a very political question and a very political statement. I hope all the fine honourable members in the House step up to the plate for all producers in Canada and all the jobs associated with agriculture in Canada, and that we don't put ourselves in a position where we're not actively engaged in the negotiations.

[The Chair, Conservative, Leon Benoit]

Thank you.

Mr. White, we still have about half a minute.

[Rick White]

Yes, just a very quick comment about the motion. We all realize what it says about over-quota tariffs, but there's also a component that talks about ensuring an agreement that strengthens the market access position of Canada's agricultural exporters as well. That tends to get brushed under the carpet at times. There are two components to that motion.

[The Chair, Conservative, Leon Benoit]

Thank you very much.

Mr. Cannan is next, for five minutes.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chairman.

Thank you for your presentation and your answers; they were very informative.

I have a point for clarification first, for Mr. McCreery.

You mentioned that the U.S. is spending $15 billion a year on subsidies. What are the subsidies of the EU?

[Liam McCreery]

I bet Bob Friesen knows. Isn't the amount about €66 billion or something like that--€71 billion?

[Bob Friesen]

It's a lot higher than the U.S.

[Liam McCreery]

As well, the support I'm talking about from the U.S. is amber. That is the most distorting.

Let's be clear. Bob makes an excellent point in talking about the need in these negotiations to tighten criteria around the green box spending, to make darned sure that people can't simply shift boxes and continue to distort markets.

To answer your question, the European subsidies are much higher.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Are the $15 billion and €66 billion subsidies ongoing? Can you see just keeping it up forever?

[Liam McCreery]

They're both playing by the rules we've agreed to. I hope they won't keep doing it and I hope the reason they stop is that we have a successful conclusion to Doha that says they can't keep doing that to us.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

I come from the southern interior of British Columbia. In my constituency of Kelowna—Lake Country is the Okanagan Valley, which is vineyards and a lot of tree fruit. The tree fruit industry is really hurting, especially the apple industry. I am wondering if anybody has any perspectives on the WTO and how that will affect the tree fruit industry.

[Bob Friesen]

I'll talk about the EU spending again. The problem with the EU is that some time ago they moved 60% of their amber spending into green box spending. They consider that to be a reduction in domestic support; they are just flowing it in a different way that is defined as being non-trade distorting. They really haven't solved the problem.

As far as the tree fruit industry is concerned, the biggest concern we hear from the horticultural producers is that their industry is being threatened by imports from countries that haven't spent the same amount of money on environmentally sustainable programs and on farm food safety programs. Certainly producers in B.C. have done that, and they feel that the same standards we have imposed upon our own producers here at home should also apply to imports.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

I've heard similar complaints. Even yesterday, when I was at the airport in Vancouver, they had New Zealand apples--right in our own backyard.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Cannan.

Mr. McCreery would like to answer that as well.

[Liam McCreery]

I have just a comment, sir. It's very interesting that you mentioned the wine industry, because they were all doom and gloom when CUSTA and NAFTA came in. They said they would not survive, and now they are the poster child for industry adaptation to free trade. They're now much stronger and better than they were 20 years ago.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

I've had several discussions with the provincial minister of agriculture. They're trying to develop a sustainable plan for the province on tree fruit, using the vineyards and the grape growers as a model.

As far as the timeline, apparently we've missed this last talk. From your industry perspective, how long can we go on until there has to be some “fish or cut bait” in these negotiations?

[Liam McCreery]

I don't think we can ever give up on the WTO. I hope Canada does become a leader in making sure it stays on the rails. In this set of negotiations, I see a lot of trouble if we're not able to make some progress by July 31, but there's no alternative to the WTO for going after those subsidies, so I hope we can have progress. I don't see another game in town to attempt to go after them. If we're not successful in making some progress by July 31, we're going to soldier on.