Mr. Speaker, I am pleased to participate in the debate today on the opposition motion on the topic of supply management.
Canada's supply management system matches production to Canadian demand and allows farmers to receive a fair price from the marketplace without relying on taxpayer dollars. Supply management eliminates major fluctuations in prices at the farm processing or distribution level and ensures an efficient and secure food supply that respects Canadian safety and health standards.
The dairy, poultry and egg industries are important to Canada as together they contribute a net $12.3 billion to the GDP, generate $6.8 billion in farm cash receipts, sustain more than $39 billion of economic activity and employ more than 215,000 Canadians throughout the country.
Supply management empowers farmers while benefiting processors, consumers, government and taxpayers. It exchanges the boom and bust cycles with a stable and orderly market without costing the government or taxpayers a dime.
Supply management is a valuable system that not only benefits Canadian farmers but also consumers throughout Canada. That is why the Government of Canada and the Liberal Party remains committed to defending the supply management framework and defending the ability of Canadians to choose how to market their products.
In Canada, pricing mechanisms are based on farmers collectively negotiating minimum farm gate prices for milk, poultry and eggs. By acting together, farmers can negotiate a fair price for their food based on what it costs to produce that food. In other countries without similar pricing mechanisms, an even smaller portion of the price paid by consumers is received by farmers.
The multilateral trading system embodied in the WTO has contributed significantly to economic growth, development and employment throughout the past 50 years. We are determined to maintain the process of reform of trade policies to ensure that the system plays its full part in promoting recovery, growth and development.
With the upcoming WTO meeting being held in Hong Kong, I am particularly concerned about the agriculture negotiations. Canada must reinstate our position in regard to global trade and demonstrate that Canadian farmers have lived up to their obligations and insist others do the same.
As a major agricultural exporter and importer, Canada has a fundamental interest in further strengthening the international rules governing agriculture trade, eliminating trade subsidies and significantly improving market access opportunities. Further, agricultural trade reform will provide Canadian producers and processors with a more level international playing field and encourage a more rules based, stable, predictable and secure environment within which they can compete.
Canada needs to continue to fight for the elimination of all export subsidies as quickly as possible, maximum possible reduction or elimination in domestic support that distorts trade or production, real and substantial improvements in market access for all agriculture and food products, and securing new disciplines on export taxes and export restrictions.
We need to level the playing field. International subsidies are preventing this from happening. There are major differences between countries and between commodities in the provision of market access opportunities, the level and type of domestic support and the use and magnitude of export assistance. Global trade distortions have had and continue to have a major impact on Canadian farm incomes.
Whereas Canada in 1993 converted its article XI protections to declining tariff rate quotas, other countries with simple quotas saw theirs remain static. This must be addressed in this round. Those with simple tariffs should be required to provide the same 5% minimum access as does Canadian agriculture and access should be a zero tariff as is ours.
The Canadian government needs to go to the negotiations with the strongest negotiating mandate possible. We support the objectives of the Doha round, but we cannot put Canadian agriculture on the table when no other country is willing to do the same.
At the beginning of the current round, Canada developed a balanced negotiating position that included a proposal to achieve an equitable clean-up of market access. Canada proposed that all WTO member countries offer market access levels of 5% of current domestic consumption on their agricultural tariff rate quotas. The 1994 modalities suggested this but. as it was only a guideline. most countries ignored it and offered significantly lower levels of access.
In July 2004, a framework was agreed to by the WTO negotiating group. This framework brought about the creation of a category called sensitive products that would permit selective products to be treated separately from products subject to the general reduction in overall tariffs.
A reasonable number of products would be eligible for sensitive treatment. Their treatment would have to result in significant market access improvement. It would be achieved through a combination of tariff reduction and market access expansion.
Canada was instrumental in ensuring that the access improvement would occur on a product basis rather than on a tariff line basis, as originally proposed. This was an important achievement for Canada as it afforded an opportunity to advance the Canadian position on supply management.
The wording of products made it possible to bring both in-quota and over-quota tariff lines under sensitive products treatment. Canada could maintain having met the obligation of access improvement by the elimination of all in-quota tariff, bringing in-quota to zero, and not be required to reduce over-quota tariffs or increase access beyond a common minimum access of 5% of domestic consumption. Canada will still pursue the goal of requiring all countries to increase the minimum required market access for all agricultural products under TRQ.
Unfortunately, the possibility for Canada to pursue such a strategy has been significantly eroded since July 2004. Since then, the U.S. and the EU have been able to negotiate sufficient flexibility within the general tariff reduction to make the sensitive product category less important for them. The U.S. and the EU can accommodate significant reductions in most over-quota tariffs by reducing domestic support prices and supplementing farmers' incomes through direct government payments, considered green by WTO.
The U.S. and the EU have retained the ability to offer no new access into their markets. At the same time, they have sought to limit the use of the sensitive products category for other countries and force new access for these products. In other words, only products in the sensitive product category will have to increase the guaranteed level of access under in-quota tariffs. We cannot accept this smoke and mirrors when farmers' lives, rural communities' existence and countries' abilities to feed their people are at stake.
The Canadian concept of having a rule requiring all countries to offer a required minimum access has been abandoned. Supply managed commodities were willing to give a required minimum access of 5% as long as this minimum would be required of all countries. The level playing field being sought is no longer possible.
Export subsidies must go. It is not good enough to agree to a formula reduction. They must disappear entirely if we are to make it a fair trading environment. For too long, the EU and the United States have bought market share with their export subsidies at the cost of Canadian producers. We can no longer afford to put our producers at risk to the benefit of their competitors.
The current state of agriculture in Canada is dismal. As a result, Canada needs to maintain a strong position and not commit to any trade-offs with other countries at the upcoming WTO meeting. We need to protect our farmers and in order to do that we must ensure that the rules apply equally to all countries.
The beauty of rules is that the countries must follow them. Guidelines, on the other hand, permit individual interpretation, and this is what has happened. The creative interpretation of the guidelines by both the U.S. and the European Union introduced a new concept, now known as “dirty tariffications” and “dirty access offers”. What countries actually agreed to was what they respectively submitted in their schedules whether or not it reflected the application of the guidelines.
The issue, therefore, is not that countries do not meet their commitments. They do. The real issue is that the commitments of the various countries are unequal, inequitable and unfair. Therefore we must insist that rules are in place which require all countries to meet the same commitments to eliminate the possibility of further misinterpretation.
A uniform methodology, one set of rules to be followed by all countries, is necessary for future considerations. This should be Canada's goal at this year's WTO meeting and we should not downgrade this position.
Also, we are supporting this motion because no one supports supply management and the benefits it provides to Canadian farmers more than the Liberals. However we need to be aware of some of the implications of this approach. It will be very difficult to attain this at the end at the day. It goes against the commitments taken by all WTO members in the framework agreed to in July 2004. It goes against the official position held by supply managed commodities, which is to provide improved access through expansion of tariff quotas to a common minimum end point of 5% of domestic consumption. This is part of the platform and can be found on the website as well.
It has implications for Canada's efforts to gain meaningful improvements in market access for other commodities provided by the 90% of Canadian producers that are tied to foreign markets. Beef, for example, is the most sensitive product for most other countries in the world. The possibility of an outcome that includes no improvements in market access for the products of one country will not likely be acceptable to other members of the WTO.