Evidence of meeting #10 for International Trade in the 39th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was wto.
President, Dairy Farmers of Canada
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.
Conservative
President, Canadian Agri-Food Trade Alliance
Thank you for the question, Mr. Paquette.
We're talking about Canada being isolated, because on sensitive products we are isolated. It's clear that the sensitive products category is the toughest nut to crack. That's why the WTO set up a sensitive products category—to try to deal with politically tough issues. Canada has chosen to be absolutely isolated and to stop consensus, therefore not allowing us to move ahead on market access discussions.
We maintain that if we're not in the room, we can't protect anyone's interests. Clearly, the WTO process is one of building consensus and working together, and if we continually are outside the room, we are not going to have anybody's interests looked after.
There is another potential that we should be talking about. These WTO talks are pretty tenuous. Whether or not we have success isn't known yet. We hope there is, but it's certainly not guaranteed. Canada has an opportunity to show leadership and take a leadership role in promoting the talks, keeping them moving ahead, instead of being on the outside, being the single country trying to slow them down and stop them. So I think as we come to crunch time, to short strokes in the negotiations, it's absolutely key that Canada not be isolated, and not only not be isolated, but instead actually take a leadership role. You can't represent anyone if you're not in the room.
Conservative
President, Canadian Federation of Agriculture
Thank you, Mr. Chair. It's rather interesting that when Canada digs in its heels because it wants the best deal for Canadian agriculture, it's considered isolated. Other countries are doing exactly the same thing. They dig in their heels as well when they want a deal that's best for agriculture. Again, I stress the point that Canada's negotiators should go right to the wall and Canada should not start talking publicly about giving in. This is a negotiation, and during a negotiation you don't show your cards that way.
Secondly, Canada should not imply it will sign the deal regardless. That's a decision that is made on the last day of the negotiation. While the negotiation is going on, it should negotiate with strength.
Let me give you a quick example of how complicated the dynamics are. I mentioned earlier that I'm a turkey and a hog producer. Let's take, for example, the market access for pork into the EU. We would be better off if the EU would put pork into the sensitive product category.
Canada's position is that there should be no over-quota tariff reductions. The fact of the matter is, as a hog producer, I don't care if the EU leaves their over-quota tariffs as high as they want. What I want is free trade inside a TRQ that is fair and reflects at least the spirit of the Uruguay Round. That's what I need for market access as a hog producer.
If that happens, if they put it into the sensitive product category.... They've already promised in the framework text of July 2004 that they would expand their TRQs, so they would have to expand their pork TRQ. They could leave their over-quota tariff where they have it and at the same time that would help our supply management say we make TRQ commitments for market access but we can leave our over-quota tariffs where they are.
It's a negotiating stance that works both for supply management and, in this case, for pork exporters. So we believe they should continue to negotiate tough and get the best deal for Canadian agriculture they possibly can.
Conservative
Conservative
Pierre Lemieux Conservative Glengarry—Prescott—Russell, ON
Thank you, Mr. Chair.
Thank you very much for your presentations today.
I'm the MP for Glengarry—Prescott—Russell, which is close to Ottawa. It's a rural riding. There's lots of agriculture in that riding and lots of different commodity sectors are represented. There is beef, pork, crops like canola, but there's no doubt that the majority of farmers are supply management farmers--milk, eggs, chicken, and turkey.
I see real advantages to supply management. One of them is a very stable, secure food supply. It's supported by the consumer. I don't think many consumers have an issue with supply managed commodities. It's not subsidized and it offers great stability to farmers. As we ride through this agricultural crisis, we see that is true for those who have supply managed commodities. If there's any part of their farm that's stable, it's that part of their farm that's stabilizing the rest of their farm.
The Canadian government, as you know, has taken a strong position on supply management, and I think that's good. It's certainly good for the farmers in my riding. I feel like, yes, we've gone to the wall. There was a vote. As you know, Canada was the only one holding the line on supply management.
To get to my question, I do have a concern. My concern is that we may be removing ourselves from the negotiating table. I worry about that also from a supply management point of view, meaning that to protect supply management we need to be at the table. Otherwise, decisions will be made without our input.
I hear the point for exports, that we need to be at the table, but I'm also worried about the supply managed commodities that we need to be at the table for. Otherwise, how do we protect our interests? That's a concern. Or how do we promote our interests if we're away from the table? So my concern is if our voice is diminished, it might be bad for supply management and it might be bad for the export-type of agricultural commodities.
Perhaps I could put the question to Mr. Friesen and then Mr. Laforge. Could you comment on what you think the impact would be, or what the impact is, if we are not at the negotiating table because of certain positions we might take? Then the rest of you, please comment afterwards.
President, Canadian Federation of Agriculture
I agree with you 100%. Canada has to be at the negotiating table. We have to be there to show leadership. Our negotiators have shown a lot of leadership in the past. We have to show leadership with the ideas we have for improving market access, and we really do need significant, profitable market access improvement for exporters. We need to be at the negotiating table to make sure we can give other countries the ideas we have for making market access commitments in the sensitive product category.
As I said to our negotiators some time ago, farmers will not judge them for being in the negotiating room. Farmers will judge them for the deal that Canada comes out with. So I believe we have to be at the negotiating table.
President, Dairy Farmers of Canada
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. I don't expect the Canadian government to be away from the table when the final decisions are made. If that's the intention, then I'm not sure what we'd be doing at the WTO from a country perspective. As Bob said, it's their responsibility to get the best deal. They know what's at stake, and they need to deliver on it now.
I'm not trying to play politics, but this is a new, fresh government with probably less background experience, and they've been dropped into this situation. If you look at the two previous processes, when the text came out and there were things that were not acceptable for supply management, they were able to withdraw the wording that we didn't want, as far as sensitive products or reductions in tariffs were concerned, through negotiation and hard-fought battles.
In conclusion, I talked earlier about cleaning up market access. It doesn't make sense for Canada to have clean market access with a very small in-quota tariff, while Europe has market access with a much higher in-quota tariff. It's the kind of cleaning up that we're talking about.
If Canada has already cleaned up a lot of this stuff with other countries in this negotiation, I would argue that we will reduce the in-quota tariff in Canada. We could even eliminate it to zero for supply management commodities. Ask Europe to do the same thing and ask other countries to do the same thing for the in-quota tariff. That's the leverage.
Conservative
The Chair Conservative Leon Benoit
Mr. Laforge, there are two other gentlemen here who have asked to respond.
I'm going to have to ask you to keep it to about a minute and a half for each response. I know that's tough.
Mr. McCreery, and then Mr. White.
President, Canadian Agri-Food Trade Alliance
Thank you for the question.
I took economics at the University of Guelph, and I absolutely love numbers. You made a statement that I think I heard correctly, but it's hard in this room because the acoustics aren't the best. You said that the majority of farmers are supply management.
Conservative
President, Canadian Agri-Food Trade Alliance
Over 91% of farmers in Canada are not supply management.
If we decided not to go into international markets, this is what it would do to Canadian farms. We would have to set aside close to 28 million acres of land, because we wouldn't need it. We'd have to tell 36,000 grains and oilseed producers to go away and do something else. We'd have to tell 37,000 beef producers that we don't need them any more. We'd have to tell over 7,000 pork producers that we don't need them any more and to go away and do something else.
Clearly, we need to address the distortions in the markets. I'm going to challenge you to try to show leadership. Canada can be at the forefront in taking on the subsidies that the Americans have in place, the tariffs that the Europeans have in place, and the tariffs that our friends in Asia have in place, and we can have fair access.
The average agricultural tariff is over 60%; the average industrial tariff is 4%. The marketplace that we internationally compete in is simply not fair. OECD countries spend close to $300 billion in trade-distorting support that materially has an impact on producers from coast to coast in this great country.
Policy Analyst, Canadian Canola Growers Association, Grain Growers of Canada
Thank you for the question. It's a tough one, but it's a good one.
It's very important that Canada is at the table on these negotiations, particularly on sensitive products, which is where the problems are. It's not enough to just be at the table. We have to be there as a country, with credible views and ideas on going forward. My concern right now is that we've lost credibility.
In terms of the Canadian government's position on sensitive products, I think the July 2004 framework was very clear in saying that all products, including sensitive products, would experience substantial increases in market access. Every other country signed on to that document, and I believe they're living by it. Canada signed on to that document and has stepped back from it. I think we are very much isolated at this point with the position we've taken.
It is very important that the market access issue is resolved. It's holding up the other negotiations, and there is a lot more to these negotiations than sensitive products. There are domestic support issues and export competition issues. Until we resolve this issue, we can't get at the big dollars and the big opportunities that are there for our exporters.
On sensitive products, to use a canola-specific example, India is one of the world's largest consumers of vegetable oil in the world. We cannot get into that market with our highest high-quality canola oil product. We are facing a 75% tariff going into the market, and we can't get over it. We know that India will declare vegetable oil as sensitive; they told us that. If we get nothing on sensitive products, we can kiss India goodbye. It's a huge opportunity that we would miss.
Conservative
The Chair Conservative Leon Benoit
Thank you, Mr. White.
Mr. Lemieux, your time is up.
Mr. Shauf has asked for a very short opportunity to respond.
Second Vice-President, Canadian Federation of Agriculture
Thank you.
I think there are three points. I think Canada still is at the table. Canada is very instrumental and has shown a great deal of leadership in and around the WTO talks in bilateral country meetings, in those kinds of discussions. Canada continues to exert a great deal of influence and is highly respected in this process. So we're not out of it; we are involved in it.
Maybe there is some disagreement on this issue, but at the end of the day, we need access to very profitable markets. We don't just need philosophic access; we need real access to be able to bring home some money.
If we don't rationalize the domestic support in conjunction with the market access, we still haven't won for Canada.
Conservative
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
Thank you very much.
And thanks for being here, gentlemen.
All of a sudden I may have to jump up and leave because I have to talk in the House, actually on this issue, but hopefully I'll have a chance to ask my question.
Maybe I'll ask Mr. Friesen to respond and the rest of you could respond also.
Concerning market access and supply management, the impression I am getting is that we cannot have further access to markets unless we do something to our supply management, and specifically unless we increase our TRQs. That's the assumption I'm hearing.
This was the message we got in a letter from the western agriculture ministers that was sent to our minister. And I'd like a comment on that letter, by the way, if I can.
Right now our TRQs in the poultry industry, in the turkey and chicken industries, are 5%. Is it my understanding that CAFTA or others, or the ministers, would like us to increase that by 5% more so that we can get access for grains and oilseeds? Or should we be going after the European Union, for example, which now has a 0.5% TRQ, and asking them to come up to our level playing field so that TRQs are the same everywhere, before we even think of increasing the TRQs?
My question is this. Does market access then mean being more flexible on our current TRQs, or should we be working with the European Union to get them to bring them up to the standard agreed upon in the Uruguay Round?
And also, we know the United States and the European Union heavily subsidize agriculture, and we're trying to get those tariffs down. By compromising our supply management, does that necessarily mean we will get better access to those markets?
I guess I'll throw in one more question in case I have to go. Could we not generate more market in Canada with the whole biodiesel...and just take some pressure off the export market?
I'll stop there. Hopefully I didn't confuse you too much.
Conservative
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
Initially to Mr. Friesen, and then to anybody else who would like to....
President, Canadian Federation of Agriculture
Thank you, Mr. Chair.
First of all, even if Canada would get up tomorrow and announce that they were giving up supply management, it wouldn't give them any more during these negotiations, because as I said earlier, countries are negotiating for the best interests of their own agricultural industry and Canada needs to continue to do exactly that.
When it comes to TRQs we do know that our negotiators introduced the idea of TRQ commitments to a common end point and that idea seems to have fallen off the table as well. So there clearly is no commitment from other countries at all that they want to build equity or make this deal equitable when it comes to, say, TRQ commitments. We certainly need a commitment from other countries that they are prepared to go to a common end point when it comes to making TRQ commitments.
