Mr. Chairman, the Minister for International Trade, in my view, outlined earlier today the importance of the WTO negotiations and especially the importance of agriculture. I was pleased to see he suggested that agriculture would be a priority. He also outlined very clearly the need to achieve an agreement. As well, I was very pleased that he outlined his dissatisfaction with the performance of our major trading competitors, the United States and the EEC.
In my remarks I first want to outline how very serious the matter is that the United States and the European Economic Community have not decreased their subsidies as they were supposed to under the GATT round. On the other hand, I want to point out as well, using some statistics, that Canada may have in fact reduced its area of support too much.
A review was done by the foreign affairs and international trade committee in June 1999. I want to outline a couple of points it made which I think are very pertinent to the discussion we are involved in today. It stated:
Given that Canada has more than met its reduction obligations and done so faster than most of its trading partners and that it has respected both the letter and the spirit of the Agreement on Agriculture while many other countries have been fairly lax in their interpretation of the rules set out in the agreement—
It went on further to state that the Canadian negotiators in the next round of meetings “will have to drive home the message that it is essential that the farm income safety net be preserved to a sufficient degree to allow governments to deal with the market's ups and downs that have always been a part of farming”.
The essential question is, has Canada gone too far while the United States and the European Union have not?
According to information compiled by the OECD, the Organization for Economic Co-operation and Development, in the period 1986 to 1988 which was prior to the GATT round of WTO discussions, the support to farmers on average was 25% for the United States, 33% for Canada and 44% for the European Union.
All that changed dramatically in the years after the GATT and WTO discussions were concluded, to the point that in the period 1998 to 2000 the average support to primary producers for all commodities was down to 23% for the United States. Canada was at 18% and the European Union was at 40%. Let me point that out in a way that may be more understandable. In other words, the United States support reduced from 25% to 23%, Canada reduced from 33% to 18% and the European Union reduced from 44% to 40%.
I would think that spells out part of our problem, which is that Canada, being the good guys we so often are, reduced our support levels probably too fast and there were areas which we maybe should not have reduced them in.
I want to also draw on another point that was made by one of the former negotiators for international trade, Mike Gifford. I point out that in this round we have to clearly send a message that Canada is not going to stand by idly while other countries continue to subsidize their farmers and not abide by the rules of the agreement. We cannot allow that to happen. If necessary I believe the government must support our farmers at similar levels.
When Mr. Gifford was speaking before the agriculture committee he had this to say:
Our obligation over the six-year transition period was to bring it down from $5 billion to $4 billion. However, that only included so-called trade-distorting support. There is no obligation to reduce the green programs.
He further said:
If Canada chose to increase its trade-distorting support, it could go up from $2 billion to $4 billion (in support).
That makes my point. The fact of the matter is the government and the country should be supporting our farmers in these times of difficulty. According to Mr. Gifford, we can do that without violating the trade agreement rules because we have reduced our support programs in a gentlemanly fashion and we cannot continue to do that.
The member who spoke before me, and I want to take issue with him on this point, suggested that the industry minister said we would support the WTO when it was comfortable and convenient for us, but would not when it did not suit us.
What the industry minister was clearly saying was that if other countries were supporting certain industries, then we would not back away and leave our producers or industries in a lurch and that we would stand by our industries and support them as well. That is the kind of position I believe the country should take.
In preparing for this upcoming round, there are a couple of recommendations that the foreign affairs and international trade committee reported in June 1999, and I want to reconfirm and support them.
In recommendation 12, the committee said:
Canada should open the discussion in the upcoming multilateral trade negotiations on agriculture by demanding that all signatory countries begin by respecting their current obligations.
That is the point that my colleague who sits behind me made earlier in her remark. We should not start negotiating from the levels we are at now, rather we should go back to the levels that the countries were supposed to be down to at this point in time.
I also want to quote recommendation, 13 which said:
Canada should also make sure that the new rules on agricultural trade are transparent and apply equally to all countries according to their respective commitments.
I want to try to wrap up with the point that Canada is a trading country and our exports and agricultural products have been increasing since the nineties. Have our primary producers benefited?
The NFU told the task force on September 11 this year:
Over the past 25 years, Canadian agri-food exports have increased six-fold—from $4 billion in 1975 to approximately $25 billion today...however, farmers’ net incomes have fallen over the same period. The current farm income crisis comes in spite of Canada’s tremendous success in winning market access and finding foreign customers.
The farm community cannot be asked to continually shoulder this burden of increasing exports and not being paid for the products they sell.
On the domestic side, we need to maintain our good marketing programs and supply management and we need to very seriously encourage other countries to use those kind of programs as rural development programs in their countries. We need to expand the green programs allowed under the WTO.
On the international side, we must gain an agreement to reduce subsidies. Although our strategy is to be lined up with the Cairns Group, I would also suggest that we build alliances with many other countries, countries that can adopt some of the programs that we have in Canada.
The last time the United States and the EEC cut a deal, the rest of the countries fell into line.
This time very clearly we must send a message that we will accept that kind of an arrangement any further. We need to negotiate to ensure that the subsidies are indeed brought down. If they are not, then we will back up our farmers with the our treasury.