International Trade committee  I have just a few more comments on Bob's point. As far as market access is concerned, if I look at hatching eggs, they're up to 20% or 21%...that they give market access. Dairy is around 6%. That is besides all the other imports of butter oil, sugar blends, and milk protein concentrates.

International Trade committee  Yes. In addition, I think we might be using the same terminology, but we don't have the same definition. We have a Canadian negotiator. I don't see him sitting in Ottawa. He's in Geneva, and I presume he's doing what he's supposed to do from a negotiating perspective. It's the government's choice on the strategy they decide to use to conclude the deal.

International Trade committee  Based on calculations similar to those made by the Americans, the Europeans or the G10, the percentage of the Canadian tariff lines should be at least 7 or 8%. However, that might vary a bit depending on the method of calculation. When I make the calculation, I am fairly careful, but it should not be lower than that.

International Trade committee  That's a good question. It's not new. The previous government talked about Canada's isolation once in a while as well, at critical moments, when the negotiation of modalities was nearly concluded. But now we seem to have more elements which may allow us to reach an agreement. So it's not normal that we are saying that Canada is becoming increasingly isolated.

International Trade committee  Thank you, Mr. Chairman. As members of the CFA, we share Mr. Friesen's views. In that context, I would like to speak a bit more about the dairy industry. Within the framework of the Doha round of negotiations, Canada wanted to reach an agreement with clear and specific rules that applied to everyone.

Agriculture committee  To conclude, in a nutshell, this is all about leadership. It's about giving direction to what has to be done.

Agriculture committee  I'll try to answer that, and maybe Richard will want to add to it. To use article 28 today makes a lot of sense, but if we wait until three years from now, when de-escalation takes place, then it's worthless, because de-escalation will take place and the 10% compensation will do the same thing as the butter oil/sugar blends.

Agriculture committee  I think the main concern here, of a political nature, is that ever since we had a panel decision that we could not export, everything we do in Canada is scrutinized by the international dairy community. Every time we're about to make a decision, we say, what will this do or what will that do?

Agriculture committee  From a DFC perspective, from a Canadian Dairy Commission perspective, there are all kinds of innovation programs available and even some discounts available for domestic innovation. The fundamental difference between us and the processors is that when we look at market development innovation, we look at things from a domestic standpoint--at domestic price--as much as possible, and processors have a tendency to look at what kinds of innovations they can create with a cheaper raw material.

Agriculture committee  Not to get too technical, but over-quota milk, if you ship it, goes to even less than world price, so that's why they leave it on farms. In the old days, CDC would end up exporting it. Now we can't export it. That's supply management; you limit your production for your domestic market.

Agriculture committee  As soon as you start doing that, you start cannibalizing the domestic market with other milk that is domestic quota, first of all, because you have to produce one of these products. The only place you end up with a surplus is if you have over-quota milk and you ship it--it ends up in skim milk powder, and butterfat ends up in stock, and it can be used only domestically.

Agriculture committee  I think that it always comes back to our ability to forecast what is going to enter. This is the basic principle enabling us to plan our production. Right now, it is impossible to forecast because the product corresponds to number 35.04. The situation is aggravated further since each kilogram of milk protein concentrate with a protein level of 87.5 per cent displaces 2.57 kilograms of skim milk powder, which we then buy.

Agriculture committee  To conclude, it has to be in that short timeframe, otherwise we're going to go back to the same scenarios as before.

Agriculture committee  With regard to your other question, Wayne, the timeframe given for this was to come up with finding some solution, not to take responsibility for import control. We made it clear to the minister that he'd have to implement some kind of import control. But for the rest, compositional standards and other issues of debate facing producers and processors, it would be nice to come to a conclusion or compromise between the two groups before we took any steps of decision in import control.

Agriculture committee  First, I think this is the third process. We agreed to it now, but it's the third one. In order to agree to it, there was a fair amount of dialogue at our board level because of all the time lost in the other two processes—especially for butter oil/sugar blends, which still is going on.