Thank you, Mr. Chairman, and thank you for the opportunity to be here. I have Clinton Monchuk, who is the Canadian Federation of Agriculture trade policy analyst, here for technical support.
CFA is the largest farm organization in Canada. CFA represents general farm organizations in every province, as well as national commodity groups. CFA has been very active in trade negotiations, having just sponsored an afternoon session at the WTO public forum in Geneva, with the theme, “The Doha Round, Where do we go from here and what are the implications?”
CFA feels that the multilateral trade agreement through the WTO is the optimal method of achieving fair and equitable trade. During the past couple of years we have witnessed that this process is difficult and negotiating consensus is sometimes not achievable. Therefore, we've seen many of our competitors, such as the U.S., Australia, and Mexico, focus their efforts on bilateral and regional trade agreements that will allow their industry increased competitive advantage over Canada. Bilateral agreements do not address domestic support issues, which are key to much of the trade problems we have in the world.
WTO, the trade policy approach that the Government of Canada has taken, is on the right track. The Canadian federation continues to support the balanced trade approach and will continue to advocate that position internationally through our membership in the International Federation of Agricultural Producers, Cairns Group Farm Leaders, and North American and European farm leaders.
Specifically on WTO negotiations relative to export competition, we would like to see countries eliminate the use of all export subsidies while still maintaining the right to have non-trade-distorting, producer-oriented SDEs. In domestic support, we require an equitable reduction of domestic support where larger spenders would be required to reduce their level of support to a larger extent than small spenders. Provisions in existing country proposals that include product-specific capping are problematic. This, in effect, gives countries the ability to continue to spend large levels of money without equity.
For example, the United States spent $1.06 billion in product-specific sugar support in the last WTO notification, in 2001. That was 52.2% of their value of production. Canada did not provide any product-specific support to our sugar beet producers during that period. If we base product-specific caps on historical spending, we institutionalize the high level of support they paid to their producers while restricting other countries, including Canada, as we did not provide that support before.
On market access, we need real increases in market access that actually allow for profitable access into other markets while respecting the sensitivities of certain Canadian products. The sensitive product category should be used for its intended purpose so that the tariff reduction category can be used aggressively for market access improvement. We must also recognize non-tariff trade barriers that have effectively restricted our market access into countries throughout the globe.
The July 2004 framework text and Hong Kong ministerial text still allow Canada to continue negotiating the Doha Round without undermining Canada's supply management. Both frameworks would allow for significant increases in market access, which would benefit our exporters and allow the continued existence of state trading enterprises.
On bilateral and regional free trade agreements, due to the difficulties associated with having 150 countries agree on one multilateral trade agreement, many countries have elected to gain market access improvements through bilateral and regional trade agreement. Canada has fallen behind some of our main competitors internationally on the bilateral regional FTA front. If we do not increase our efforts to finalize existing negotiations and continue to seek out new partners, our exporters will increasingly be pushed out of existing markets and find it difficult to expand into new markets.
CFA supports the government's current direction of FTA negotiations and hopes the Department of International Trade continues its effort in other key markets. Current negotiations with the Dominican Republic, the Central America four, European Free Trade Association, Singapore, and most recently the South Korean FTA are essential to gaining and holding market access. CFA, along with other forward-thinking organizations, outlined the list of future trade agreements the government should focus its efforts on. These areas include China; Japan; the Andean community including Ecuador, Colombia, Peru, Bolivia, and Venezuela; India; and Morocco.
We recognize the difficulty in achieving a successful outcome in all these areas. However, the current resources working on bilateral regional free trade agreements are not sufficient. For Canada to continue its successful role as a large exporter of agriculture goods, we will require more resources to gain new market access and secure existing markets where free trade agreements from other countries threaten to displace Canadian product.
Thank you again for giving CFA the opportunity to present today.