International Trade Committee on Oct. 6th, 2009

[Don Stephenson]

First you would have to conclude a negotiation on the substance of the obligations to be taken on both sides. Then the technical steps would be to first of all seek approval of Parliament for entering into the treaty.

In fact, I'm using the NAFTA framework as opposed to using the GPA framework, because in the NAFTA framework there is an opportunity to expand your obligations without a legislative change that would require consideration by Parliament.

Again, I'm a little nervous about providing the wrong information to committee. Perhaps I should provide a written response subsequent to the meeting if you want to understand the exact steps in respect of a NAFTA solution. The proposal being made by Canada is not in fact to use the NAFTA.

[Scott Brison, Liberal, Kings—Hants, NS]

So you would agree that any approach to the WTO is going to leave out significant areas of U.S. stimulus investment.

[Don Stephenson]

Much of the stimulus spending under the Recovery Act would be implemented at municipal and state levels and therefore would not be captured under the existing U.S. obligations in the GPA.

[Scott Brison, Liberal, Kings—Hants, NS]

Is that it, Mr. Chair?

[The Chair, Conservative, Lee Richardson]

That's it.

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you very much.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Brison.

We'll go to Monsieur Guimond.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. Chairman.

Good morning, gentlemen. Thank you for having accepted the invitation to appear before us today to discuss agriculture and supply management in particular. I am very interested in this issue because I am a dairy producer from Rimouski, in the Lower St. Lawrence area. My brother and I run a farm, and we have one employee. For a small business in a rural area like mine, this is very important. My brother and I are still able to work in agriculture today, as dairy producers, because of supply management; that is very clear. If this model had not been invented, it is very likely that my farm, which is situated very far from markets, would no longer be in business today. That is the case for my farm and for those of several of my dairy producer colleagues, particularly in the region.

I'm on the front lines, and you are at the opposite extreme. Every time you have the opportunity to negotiate on our behalf, I hope that you think of the farmers who, like myself, are very interested in supply management because it is a survival issue.

We have been discussing the Doha Round since 2001. It is slow, it is time—consuming, it has gone on for too long. How do you explain the fact that there has been so little progress since then, particularly for the recognition of the specific character of supply management for Canada in the Doha Round negotiations?

[Gilles Gauthier]

Mr. Chairman, I understand the wish to maintain supply management perfectly. I myself grew up on a dairy farm and I fully share your concerns.

As for the slowness of the negotiations, you are aware that negotiations involving 153 countries take time, particularly when the framework is such that the countries must arrive at a consensus. The issues are also very important for a great many of these countries, particularly in the area of agriculture.

For most of the WTO countries, the Doha Round is above all a mechanism that allows them to better participate in the international trade system for agricultural products. There are many elements at play for many of these countries. There have also been fundamental reforms in several countries, particularly in Europe. We have to find a way within the negotiations of keeping every country happy as far as their trade interests and economic development are concerned. But to achieve such results takes time; we must be patient.

Throughout these negotiations, Canada has most certainly been actively promoting the interests of our export sectors in order to defend supply management at every opportunity. As I said in my opening statement, we have maintained a firmer negotiating position than any other country in this area. It is up to us to continue to maintain this firm position and to defend our interests.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

We are hearing more and more about the right to food. There has been a food crisis, and unfortunately, there will surely be others. Last March, the United Nations Special Rapporteur on the right to food, Mr. de Schutter, produced an eloquent report on the serious shortcomings of the Doha Round.

Knowing that supply management is an important tool to protect ourselves from food crises and to regulate our markets, what is your strategy as the chief negotiator to promote supply management among the allied countries? What strategy will you adopt in order to move supply management forward and therefore prevent, I hope, any new food crises?

[Gilles Gauthier]

Mr. Chairman, it is important to understand that supply management as such is not an issue in the negotiations. The negotiations deal with a global framework for agricultural sector subsidies and the opening of agricultural markets. No one around the negotiating table is asking for the repeal of supply management. It is an issue that is not on the table in the negotiations.

What a great many countries hope to see—for the most part developing countries—would be reforms in the developed countries, so that they could better develop their agricultural production and have access to a market that will bring in significant revenue, which would contribute to their development.

Mr. de Schutter made a presentation at the WTO a few months ago. It was rather interesting to see the reaction of several developing countries, who felt that his comments and proposals were somewhat detached from their economic reality. In their eyes, one development tool would be their capacity to export and to have access to a lucrative market, and to higher prices. Therefore, they are targeting access to our markets. Within that context, one has to step back and study the issue from the perspective of the negotiations overall. We must find a balance between allowing each country to safeguard their interests, while at the same time promoting fair trade for all of the countries participating.

That is what is at stake in the negotiations. The intent of the negotiations is not to determine whether or not certain countries should adopt supply management. It is rather an issue of having international trade rules that are fair for all participants.

[The Chair, Conservative, Lee Richardson]

Thank you, Monsieur Gauthier. That too was eight minutes.

Mr. Julian.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you, Mr. Chair.

This is a very important subject, as you well know. What we've had is I think a very unanimous call from the supply managed sector: the Canadian Hatching Egg Producers, the Dairy Farmers of Canada, the Egg Farmers of Canada, the Chicken Farmers of Canada, the Canadian Turkey Marketing Agency. All of them called on the government to stand strong in its rejection of these proposals, which essentially are a death by a thousand cuts. I would agree with you, Mr. Gauthier, that it's not eliminating the supply managed sector immediately, but what it does is continue to push us back, and that has a very negative impact on the supply managed sector. When we see what has happened with our softwood industry, with our shipbuilding industry.... These are all self-inflicted attacks on our own industries, because we have not negotiated effectively.

I'm wondering, to start, about two things you mentioned in your presentation. One is that there are ongoing consultations with the supply managed sector. I'm wondering what character those ongoing consultations or communications with the supply managed sector have. Secondly, what impact analysis has been done on the impacts of what is on the table, which is essentially pushing us back, in the supply managed sector?

[Gilles Gauthier]

With respect to your first question on the consultations, these are ongoing. We have regular meetings with the industry. We debrief them after each negotiating session to make sure they understand the full context of the negotiation. We seek their input as to what types of arguments we can bring to the negotiating table to show that what's currently on the table would be unacceptable to Canada and would have an adverse impact on our industry.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Just on that, then, when was the last meeting? And were representatives of all of the agencies I just mentioned present?

[Gilles Gauthier]

The last debriefing I made was a few weeks ago. We have meetings scheduled for this week in preparation for a negotiating session that will take place next week in Geneva. But these are ongoing, and I've made it clear to the industry that I'm always open and available for any discussions to hear their points of view and to make sure that I adequately understand their preoccupation. So these are ongoing.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Okay. Thank you for that.

Now on the impact analysis....

[Gilles Gauthier]

The current set of proposals on the table calls for a tariff cut of 23% to our tariff levels currently in place, and they call for an expansion of our tariff rate quota from 4% to 6%. The industry is of the view that this would have a devastating impact on them. On that score, it is clearly our point of view that we need to maintain our firm position against any tariff reduction and any TRQ expansion, so that's the position we keep maintaining at the negotiating table.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you, Mr. Gauthier.

I'm moving along to Mr. Stephenson, just because of time.

Mr. Stephenson, I'd like to ask you two questions.

What are the instructions you've received from the government around single desk marketing—around the Canadian Wheat Board?

Secondly, is the position of the government essentially a firm one? In other words, have you been instructed that Canada would not sign on to any agricultural provisions that do not fully protect our supply managed sectors?

[Don Stephenson]

My instructions from the government are that decisions about the manner in which Canadian agricultural producers market their products should be made in Canada and not in Geneva. Until those aren't my instructions, they are. So I guess, yes, it's a firm position.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

So Canada would not sign on to those agricultural provisions, if that's what is put forward, unless our supply managed sector is fully protected?

[Don Stephenson]

My instructions haven't been given to me in the form of whether, in the future, if that were the choice before Canada, Canada would sign or not sign an agreement. I've simply been instructed in my negotiating mandate to reserve the decision of marketing choice for Canada.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Period?

[Don Stephenson]

Period.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

I would like to come back to Mr. Gauthier. Paragraph 6 of the discussion paper refers to two choices. Could you please take a few minutes to explain the difference between the two choices to the committee in this paragraph 6 as it affects paragraph 71, so that we can better understand the two proposals that have been made? I know that the government has rejected both, but I would like us to be able to understand the differences between the two.