Thank you, members.
Gary has touched on why bilateral agreements with South American countries are good, but I'd like to share some of the shortcomings of bilateral trade agreements with you.
Bilaterals deal primarily with tariff lines, and this becomes an issue for smaller marketplaces. Canada has a population of just over 30 million people, while the United States has over 300 million, which is roughly 10 times the size of Canada's domestic market. Because we are not as large a market for imports, we don't always have the same bargaining clout that countries such as the U.S. have. In South Korea, for example, the U.S. might negotiate a better bilateral deal due to their large import market for Korean goods. If that happens, Canadian producers are permanently locked in a disadvantage if we can't negotiate the same tariff lines and market access.
A better way forward in the long run for Canada is a competitive multilateral agreement of the kind we see at the World Trade Organization talks. The multilateral process is crucial because it is the only meaningful way to get at the key issues of domestic and export subsidies.
Not that many years ago, both the EU and the U.S., for example, were subsidizing their farmers at artificially high prices, which led to massive overproduction, and then they had to subsidize the exporters to get the prices down to world prices to even make the sales. It was a double subsidy, which hurt not only Canadian farmers but farmers in many other countries also, such as Colombia.
Subsidies from other countries can be both direct and indirect. An example is what we face today in the EU oat subsidy. Although the EU does not export oats into Canada, they do sell oats at a subsidized price into the U.S., which then depresses our prices here in Canada, since the U.S. is our main market for oats.
Every country in the world wants to protect its farmers, so over time we have seen multitudes of subsidies and tariffs preventing the movement of agricultural goods and people trying to produce crops that may not be agronomically suitable for their areas. What a multilateral trade deal does is provide fair trade rules that everyone has to follow, whether they are large, powerful countries such the U.S., or the EU bloc, or smaller ones like Canada and Colombia. A WTO agreement would also provide a dispute resolution process to solve agreements that have dragged on for years.
In summary, we recognize the importance of bilateral agreements, especially in connection with the rapidly growing South American market, but we also encourage all parties to remember the importance of the multilateral process in keeping Canadian farmers competitive.
Thank you for the opportunity to be here. In a previous job I worked in international development and lived in a number of developing countries. I look forward to your questions.