Evidence of meeting #40 for Agriculture and Agri-Food in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was negotiations.
A recording is available from Parliament.
Conservative
Larry Miller Conservative Bruce—Grey—Owen Sound, ON
Thank you very much, Mr. Chairman.
Thank you, Mr. Ministers, Mr. Verheul, Mr. Gero. Thank you very much for coming today.
I've got to note, Mr. Chairman, that again, like always, Mr. Easter seems to be more intent on not giving farmers a choice than he is on protecting the supply management.
My first question to you is what is your main concern about possibly being left out of WTO negotiations? Any one of the four of you can answer any of these questions.
Conservative
Chuck Strahl Conservative Chilliwack—Fraser Canyon, BC
I don't claim to be a real veteran of these negotiations, but I have been over to Geneva, and most recently to Davos, and I've had a lot of bilateral discussions with different countries that often share our interests on sensitive products, and sometimes don't. But all those discussions convince me, as Mr. Emerson has already mentioned, that for us not to be engaged during the give and take of negotiations—
What I didn't realize when I first got involved in this is that a lot of these negotiations take place in myriad ways. They take place in formal rooms like this. There are groups of 10; there are groups of 20; there's the Cairns Group; there's G-10, G-20. There are groups of developing countries. There's the EFTA group. On and on it goes. The more of those you can get into, both formally and informally, the better chance you have of influencing the outcome.
So you can go to the final wrap-up, and go to the green room, and I was there with Minister Emerson last July, I guess it was—You can go to the green room and say let's see what everybody's got for us, and this is where we ended up, or—and I think this is preferable—you say we engaged at every step of the way and at every forum we could, large and small, formal and informal, putting forward aggressive ideas to protect Canadian interests.
I think we're very fortunate—I can say this publicly—to have people like John Gero and Steve Verheul. I've talked to people internationally who say that we have some of the best negotiators in the world on our team. So the more they can engage, the better it is for Canada.
Conservative
Larry Miller Conservative Bruce—Grey—Owen Sound, ON
So it's fair to say, in regard to not being there, that it's pretty hard to champion Canada's position if you're not sitting at the table. It's a pretty clear statement.
Conservative
Chuck Strahl Conservative Chilliwack—Fraser Canyon, BC
You want to be there, and you want to be invited back. It's just like a dinner party for the Oscars. You want to be at the right party, and you want to be there for the right reasons. I shouldn't use that example. I'm sure it's mostly bread and water when Steve's involved. But the point is, you want to be there and you want to have an opportunity to set the agenda.
One of the things we've been able to do with this kind of leadership is that we've been able to put forward ideas—some of which nobody had thought of before—and then they're Canada's ideas that are being debated, including supply management, not those of some other country that won't care about our bottom line. So it's best we get our ideas out there. Then at least those who set the agenda often carry the day.
Conservative
Larry Miller Conservative Bruce—Grey—Owen Sound, ON
My next question, Mr. Minister, is we talked a bit about enacting article 28 in relation to the WTO. I wonder if I could hear some comments on what the consequences would be of using an article 28 with the U.S. And I'd add another question to that. Could you just talk a bit more about the two-pronged approach that you had in order to protect supply management?
Conservative
Chuck Strahl Conservative Chilliwack—Fraser Canyon, BC
Just quickly, we talked about two things at the Dairy Farmers of Canada annual meeting. One was the use of article 28. The dairy farmers have said, and we've become convinced, that there has been a spike in the amount of MPCs used in Canada and that the numbers continue to rise rapidly. We became convinced from doing our own research that article 28 was in the best interests of Canada and supply management, and they wanted us to use it. We moved ahead on that. It hasn't been done before. It was a pretty aggressive thing. Even though we took a little flak internationally on it, we think it was necessary.
This was also the culmination of our dairy industry working group announcement as well. They met over the summer, into the fall, and even over Christmas. We talked about ways we could find a balance on compositional standards for cheese. The processors and farmers had been unable to come to a complete agreement on this, but there was a moderator's report that we felt was close enough to an agreement.
We wanted to move ahead, so we're moving ahead where we can with that report while encouraging the dairy industry working group to continue with other work they need to do. Those two things will offer some short-term help and security for supply management. The compositional standards and the dairy industry working group is an effort to bring longer-term growth and stability to the industry. I think that is actually pretty key.
Do you want Steve to briefly address the other issue?
Steve Verheul Chief Agriculture Negotiator, Negotiations and Multilateral Trade Policy Directorate, Department of Agriculture and Agri-Food
On the consequences, I think there are a number of possible consequences of applying an article 28 against the U.S. First of all, if we could apply an article 28 against the U.S., then it stands to reason that they could apply article 28s against us. We certainly export a lot of agricultural commodities to the U.S., so we could see potential actions against wheat, pork, and some of our key exports. That's one danger.
Secondly, I think we'd be concerned that if we did apply an article 28 against the U.S., they would challenge that. Certainly we have legal advice that says we shouldn't be allowed to apply it against the U.S. If they were to challenge that, an interpretation of article 28 may not be confined too strictly and we might get into broader issues of supply management. I think we could face certain risks if we went in that direction.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
Thanks very much, gentlemen, for being here.
I'll try to see if I can have some logical thought in my questions.
Minister Emerson, you talked about give-and-take negotiations and the fact that our government is committed to supply management. We know there is pressure by other countries to either water it down or do away with it. We know there's pressure on our other state trading mechanisms—and I'll say the word—the Wheat Board. We know that. Yet getting out of WTO is inconceivable, according to what you said.
If we maintain our supply management as it is, with the overquoted tariffs as they are, with the percentage of products coming in as they are, obviously there are no concessions there, so we have to then make concessions somewhere else. Is it my understanding that they have to be in the area of agriculture, or do we make concessions in some other area to keep this sector of agriculture? Is our Wheat Board the sacrificial lamb?
I'd like to get clarity in this. We give and take. We negotiate. If we're saying that we're not changing anything here, what can we negotiate if we still want to stay in?
I have one last question. Have we yet signified our intent for article 28? If not, when are we planning to do that?
Conservative
David Emerson Conservative Vancouver Kingsway, BC
I'll answer the last question first. We're just preparing some of the data that's necessary for notifying the WTO of our intent to pursue article 28. You need to distill the data so you're getting clean data on the milk protein concentrates. So that will be a couple of weeks.
On the general question of where we make movement, members of this committee would know that the WTO negotiations are covering a range of areas. We have non-agricultural market access, which is manufacturing and those kinds of products. Actually, our Canadian ambassador to the WTO chairs that negotiating group. There's an area where we're relatively comfortable that Canadian concerns and issues can be met.
There are services negotiations going on. There are negotiations going on with respect to new rules and better definitions to discipline the use of trade remedies, like we've had in softwood lumber, for example, to limit the ease with which you can bring dumping and countervailing cases in an intransigent way. There are trade facilitation negotiations around systems that are in place in various countries, particularly developing countries, to ensure that in fact you can get through the processes at the border in an efficient way. So that's all going on.
There is very little, I would say, in cross-sector give-and-take. In other words, if you have a problem in agriculture it is very, very difficult, if not impossible, to offset by some concession in non-agricultural market access. What you tend to see is that agriculture negotiations have their own group, their own chair, and those negotiations tend to be largely contained within agriculture. I'm not going to say to you that it's 100%, but it's probably 95%.
Steve, you're there. Is that correct?
Chief Agriculture Negotiator, Negotiations and Multilateral Trade Policy Directorate, Department of Agriculture and Agri-Food
That is correct.
Conservative
Chuck Strahl Conservative Chilliwack—Fraser Canyon, BC
I could add to that, Mr. Chairman.
The question was asked if the Wheat Board is a sacrificial lamb, to use your words. Obviously the government's position is clear on the Wheat Board. At this time we think that barley growers deserve more choice in how they market their products. That being said, we've also made it very clear that it's a decision we should make here in Canada, not at the WTO. We're engaged, as you know, in a plebiscite here and so on to make a decision, what we hope to be a decision here in Canada. We've been consistently saying that a decision for Canadians should be made in Canada, even when it comes to barley.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
What do we give? We don't give on supply management. The Wheat Board is in Canada. What do we give?
Conservative
David Emerson Conservative Vancouver Kingsway, BC
We're not sitting on the sidelines. We have, as Chuck said, some of the best negotiators in the field. They are actively looking after Canada's interest to the maximum degree possible.
At the end of this negotiation, there will be a broad-based consensus of countries, and it will be a balanced package, and we will have influenced it in various places.
If we are not actually into give-and-take in some areas, as we aren't with supply management, then we lose that degree of freedom, that element of bargaining opportunity. We will then have to assess the overall package that the broad majority of countries will accept. Then we will be faced with a decision of whether we stay in or get out.
Is that a fair statement, Mr. Gero?
John Gero Assistant Deputy Minister, Trade Policy and Negotiations Branch, Department of Foreign Affairs and International Trade (International Trade)
Yes.
Conservative
Chuck Strahl Conservative Chilliwack—Fraser Canyon, BC
I could just say also that one of the things that impressed me in negotiations I've been involved in is that this is one of those rare occasions when it actually can be win-win. It's not a matter so much of what we are going to give up in Canada. What we're looking for is substantial reduction in domestic support systems—for example, with the Americans, trying to get their domestic support systems for their agriculture industries down to a level where it's going to create huge opportunities for us. In return, of course, the Americans are asking the Europeans and others to reduce tariff and non-tariff barriers for trade opportunities for them.
This is the development round, and this is a great opportunity to actually have a winning combination of decisions, if you will—the package that Mr. Emerson talked about—that can be a winner across the board. If you can reduce domestic subsidies, export subsidies, and tariff and non-tariff barriers to trade and get that as part of an overall package, the world is going to be much better off when it comes to trade—and the disciplines on the support systems that remain, the disciplines the minister talked about. All of that package is going to make Canadian agriculture—just speaking from my own ministry—much easier to manage, and farmers will be able to predict the future as they plan their own business.
This is a great opportunity, the world's best opportunity, to get a win-win-win situation for all products and for almost all countries.
Liberal
Charles Hubbard Liberal Miramichi, NB
Thank you, Mr. Chair.
The minister just said it, but one of the fears that farmers have is that in our negotiations in the past, when you consider the European Union and the Americans, we entered the 1990s with no clothes in terms of how we were able to respond to the subsidies in the United States and the European Union. So I think farmers have a lot of concern, especially in these five commodities where supply management is so important. The value of those so-called quotas within the agricultural community is tremendous. I think most farmers would look for some offsets if we were to negotiate that supply management concept away.
I'm concerned that I heard at least twice today the words “best results for Canada”. We are an agriculture committee, and it appears that what we're hearing is that maybe supply management might not be part of that best result for Canada.
If we were to assume that we were to trade off.... I know Mr. Emerson talks about agriculture itself, but what are the other examples of what our overall negotiator might give up or gain in terms of what concessions we would offer to the nearly 150 other countries that are dealing with the WTO?
What would be an example that we could visualize, that Canadian farmers could see, that we'd give up or gain in terms of what we might change within the supply management system?
Conservative
Chuck Strahl Conservative Chilliwack—Fraser Canyon, BC
We've been pretty clear on our position on over-quota tariffs and so on that there isn't any change. We're not negotiating anything on that. There aren't any negotiations taking place respecting the decision of the House that we all voted on. There aren't any concessions being planned or anticipated, being negotiated or talked about. There aren't any.
The only thing I can say about specific examples of what our position would be on any one product is that we do have a negotiating mandate that cabinet has agreed upon. I've told you that part on supply management. That's up front. We're being open about that. Everybody in Geneva knows it anyway, so there's no secret here. I'm telling you what we know.
We're just not discussing the overall negotiating mandate, other than that part, in public. You can't negotiate in Geneva with the kinds of things that are on the table by saying “You know what we'll do? We'll give you access on textiles if you'll give us something on bicycles.” You just don't get into that kind of stuff in public. You never can, and you won't get anything out of me on that.
Liberal
Charles Hubbard Liberal Miramichi, NB
Today at noon we met with young farmers from across Canada, young people who are investing their future in the agricultural sector. A good number of them were in those five vital sectors that we're talking about this afternoon. What assurance can we give them that they are investing and that they're beginning their careers in a safe sector that's being protected by the historical concept of supply management? They're going to the banks, the Farm Credit, borrowing vast amounts of money to get involved. Yet we hear words such as the “highly trade-sensitive economy” that Canada has, that we're looking for the “best results for Canada” in terms of our economy.
Are we, in our negotiations, getting tremendous pressure in terms of what somebody wants us to give to them, in order for us to have to make changes within supply management?
