Canada pressured to open agriculture industry to foreign competition

September 08, 2011

Source: LEE BERTHIAUME

OTTAWA — If Canada wants to play a leading role in addressing global demand for food and food security, the government must reconsider its refusal to open up domestic dairy, egg and poultry industries to outside competition, a New Zealand diplomat says.

"There are some policies that may have been very good in the past, but going forward are not necessarily going to help the industry succeed in its aims," said Koro Dickinson, second secretary at the New Zealand High Commission in Ottawa. "Which is being efficient, being productive, but also meeting the challenges that confront us."

Starting Wednesday, trade and agriculture ministers and senior officials from 19 countries known collectively as the Cairns Group will be meeting in Saskatoon to discuss ways to fight protectionism and open markets to agricultural products.

For Canada, this is an especially important goal as the country exported $35.5 billion worth of wheat, beef, canola and other agricultural and food products last year, and another $20.8 billion in manufactured food and beverages.

The primary purpose of the Cairns Group is to push for the successful completion of international trade talks at the WTO, called the Doha Round. Those talks, initially launched in November 2001, have recently become stalled again.

A senior Canadian official, speaking to reporters in advance of the Cairns meeting, said supply management, as the protection of Canadian dairy, poultry and egg sectors is called, is not officially on the agenda in Saskatoon. Rather, as host, Canada wants to look at ways to advance the Doha Round, tackle global food security issues and address a recent increase in non-tariff trade barriers.

But Dickinson said supply management remains an issue for many Cairns members like New Zealand as it is counter-intuitive to the group's goal of removing barriers to trade.

"While it may not be constantly and specifically raised, it's an issue that all members are clearly interested in," he said of supply management. "Cairns Group members generally see a vibrant global agricultural sector being driven by open markets, on-farm efficiencies and competitive forces. Most of Canada's agricultural industry runs along these lines. However, supply-managed producers are the exception."

According to the UN Food and Agricultural Organization, the world will need to produce 70 per cent more food by 2050 to feed an estimated nine billion people.

But former trade minister Stockwell Day said the idea that supply management is a significant barrier to feeding the world is a false one as technological advances have increased production significantly.

"The only damper on food production on any country is not whether they have supply management or not," he added. "But whether they have a democratic system that allows them to own their own land and relatively free markets."

He noted New Zealand has been extremely vocal in pressing Canada to open its dairy industry as the island nation is a major exporter of dairy products. It has gone so far as to block Canadian participation in a key Asia-Pacific trading bloc, the Trans-Pacific Partnership, over the matter.

The World Trade Organization in June issued a report on Canadian trade policy in which it also called on the government to reform its supply-management policies, starting with the dairy sector.

"Canada, especially Canadian consumers, would likely benefit from the liberalization of its dairy markets," reads the WTO report published in June. "This could also provide relief to some competitiveness issues, such as those that have been apparent in the cheese market."

In addition, the European Union has made the opening of supply-managed sectors a key demand in free-trade negotiations between the two sides. A senior EU official told Bloomberg last week that the Europeans were "disappointed" Canada hasn't offered any concessions on its supply-managed system, and warned it could refuse to open the doors to Canadian beef, port and sweet corn.

Despite the international pressure, the government has repeatedly said it stands by Canada's supply-management system, a position that is supported by the NDP and Liberals.

Day said many countries have sensitive agricultural sectors they protect, and that during his time in government, there were no discussions about changing the supply-management system.

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