Good morning, everybody. Thank you very much for being here.
Madam Chair, honourable members, thank you for the opportunity to appear today.
My name is Andre Harpe, and I am the chair of the Grain Growers of Canada. GGC is the national voice for Canada's 65,000 grain farmers. Depending on the crops we produce, whether it be cereals, pulses or oilseeds, we export between 70% and 90% of what we grow to a diversity of markets worldwide.
I am also a third-generation farmer from the Peace River region of northern Alberta. I grow malt barley, canola, and peas.
Grain Growers is also a member of the Canadian Agri-Food Trade Alliance, commonly known as CAFTA, which represents essentially all export-oriented agricultural commodities and food manufacturing, and is a strong champion of free trade and the role of the World Trade Organization in trade liberalization.
Ladies and gentlemen, all across Canada grain farmers like me rely on free and fair trade. This is core to the success and competitiveness of our farm businesses, our families and our communities, as well as the larger grain sector.
I'd like to focus my comments on three areas: one, the importance of trade to grain farmers and Canada's leadership at the WTO; two, a full-functioning dispute settlement mechanism; and three, revitalization of the WTO negotiation function.
Grain farmers need a strong, rules-based trade environment to ensure that we have predictable access to international markets. Canada is a mid-size economy, and we are largely built on exports. This means we rely on a predictable trade landscape, expanded and diversified market access, and a WTO framework that can provide certainty of our export markets.
Your study looking at how to modernize the WTO is an important one. Since its inception, there has never been a greater need for an effective and enforceable rules-based system than right now. Grain farmers are concerned with growing nationalism, a focus on self-sufficiency in food production, and new forms of protectionism spurred by COVID-19. Agriculture is often the most vulnerable and the first target for protectionist measures.
However, this approach is neither sustainable nor beneficial in the long term. Canada must hold a firm line against this growing wave of protectionism. Open borders allowed for the movement of inputs, ingredients, workers, and expertise to cross borders throughout COVID-19, and for supply chains to continue to operate. Without open trade for agri-food, things would have been very different for families in Canada and around the world. We would argue that it is more critical now than ever to remove existing barriers, accelerate agri-food trade liberalization, and urgently fix and modernize the World Trade Organization.
In that sense, we are very supportive of the federal government's ongoing leadership through the Ottawa Group on reform, to safeguard the WTO and the rules-based trading system. We appreciate the focus on ensuring that any support measures stemming from COVID-19 are targeted and transparent, avoid unnecessary barriers to trade, and recognize that any emergency measures put in place should be withdrawn as quickly as possible to avoid any adverse effects on trade.
However, challenges to the functionality of our trading system predate the pandemic. The grain sector has faced a laundry list of non-tariff trade barriers in recent years that have restricted market access and farmers' access to technology. We hope the WTO modernization efforts will strengthen the function of the relevant committees for our sectors—namely, the agriculture, SPS, TBT, and the rules of origin committees—which work to review and improve compliance to the WTO Agreement on the Application of Sanitary and Phytosanitary measures and the WTO Agreement on Technical Barriers to Trade, as well as adherence to international standards. These agreements require that the measures introduced by WTO member states be based on science, be applied to the extent necessary, and not constitute an obstacle to trade.
Another major concern for Canadian grain farmers is the dispute settlement mechanism. A system of rules without the ability to effectively and efficiently come to a resolution when disagreements emerge simply does not work. As such, the current paralysis of the WTO appellate body needs to be resolved. Since 2019, the appellate body has been missing the required number of members, leaving it unable to reach quorum and therefore unable to hear appeals. A solution to this impasse is needed so the WTO dispute settlement can address the growing number of complex trade issues.
In addition to the dispute settlement mechanism, a revitalized WTO negotiation function is required to update and strengthen the existing rules of trade and to ensure they align with today's realities.
GGC supports increased momentum leading up to the ministerial conference, now expected in December 2021, to accelerate reforms and to agree on a renewed work program for agricultural negotiations. MC12 must deliver an outcome on agriculture, including on domestic support, along with other measures restricting trade of agriculture. Large agriculture-producing countries employ trade-distorting measures that impact international markets and prices. We believe there must be an equal playing field for farmers internationally and that WTO plays an important role in ensuring that this will happen. Much work remains in multiple areas, from market access to export competition, transparency, timelines of notifications and modernizing of trade rules to fit today's business needs.
As I prepared to appear before this committee, I came across a 2017 report from the Standing Committee on Agriculture and Agri-Food entitled “Non-Tariff Trade Barriers to the Sale of Agricultural Products in Relation to Free Trade Agreements”. I must say that if this document were not dated 2017, I would have guessed it was probably written last month. It supports the importance of WTO modernization and adherence to science-based decision-making. As highlighted in the report—and there has been a substantial amount of economic analysis on the cost implications of non-tariff measures to date—the data show that the sum effect of non-tariff measures for agri-food exporters is equivalent to having tariffs ranging from 25% to 30% in Asia, and 30% to 40% in the European market.
More largely speaking, the federal government must take a proactive strategy to enhance commercially viable access to export markets and to mitigate the trade-distorting impact of non-tariff barriers on our sector's growth and competitiveness.
The absence of WTO modernization will lead to more trade barriers as well as a less predictable, less transparent and less enforceable trading environment. The challenges our sector is facing in terms of protectionist measures will only increase over the next decade. The sooner we can accept this reality, the sooner we, a middle power in global trade, can effectively position ourselves in this increasingly protectionist world.
Thank you, Madam Chair.