Hong Kong Agreement a “Moderate Victory” for Canada’s Supply Managed Industries

Canada’s supply-managed industries breathed a sigh of relief Dec. 19 when the WTO’s Hong Kong agreement was released.

Canada’s supply-managed industries breathed a sigh of relief Dec. 19 when the WTO’s Hong Kong agreement was released.

The agreement, while not specifically addressing supply management, allows for the protection of “sensitive products.”

It also provides for a more open-ended interpretation of sensitive products and the types of protection available than earlier draft texts. However, industry leaders caution that negotiations will continue for several months and that the details of a final agreement – expected by July – will be vitally important.

Laurent Pellerin, president of Quebec's L'union des Producteurs Agricoles, said the favourable language on sensitive products “buys time, but it also changes the rhetoric the ministers have used in the past.

“There is a new vocabulary that our negotiators have made good use of, and I think it's there to stay. We're happy with that,” he said.

Dave Fuller, chairman of the Chicken Farmers of Canada, said Canada was “very aggressive” regarding the sensitive product category and its supply-managed
industries.

“The Canadian government sees our industries in that category, which will still allow us to run an effective supply management program,” he said.

Bob Friesen, President of the Canadian Federation of Agriculture (CFA) said: “There’s still a long road ahead of us, particularly in the area of increasing market access for our exporters and maintaining the stability of supply management, but the structure is in place to achieve that goal.”

“With the agreed elimination of export subsidies, and new wording beneficial to supply management and the Canadian Wheat Board, I think we can call this a moderate victory and a vindication of Canada’s balanced approach.” Friesen said.

In the agreement reached in Hong Kong, the wording for market access will allow Canada to continue to negotiate for aggressive tariff reductions and negotiate flexibility in the sensitive product category for supply management. The wording for sensitive products also allows Canada to negotiate for cleaner market access in this category to improve some important export markets, he said in a news release.

The CFA president also said the negotiations on domestic support are headed in the right direction, although there is still concern about the U.S.’ ability to maintain spending by moving support money around between different categories, and concern about equity in commodity-specific caps.

However, the wording on export competition is flexible enough for Canada to continue to negotiate without giving up its right to maintain single-desk state trading enterprises like the Canadian Wheat Board, the CFA news release said.

“Canada is coming away from this WTO session with gains for both our exporters and our sensitive domestic commodities,” said Friesen. “We’re one step closer to a good deal for all Canadian producers that will benefit Canadian farm incomes.”

International Trade Minister Jim Peterson and Agriculture and Agri-Food Minister Andy Mitchell were also pleased with the result.

“This text provides scope for Canada to achieve its objectives in key areas. A number of Canadian proposals and ideas are reflected in the Declaration, specifically on non-agricultural market access and domestic support to agriculture. We are also pleased that Canada’s objectives have been met on the treatment of sensitive products and on exporting state trading enterprises,” they said.

Wayne Easter, parliamentary secretary to the minister of agriculture, also attended the World Trade Organization meetings. He said as the meetings were winding down Canada proposed every country be allowed to protect a small percentage of its agricultural production from the international trade rules.

“We just couldn’t win it on supply management alone,” said Easter. “We needed to offer up the right for other countries to be able to table a list of sensitive products. We would include our supply management products in that list.”

Not everyone was as pleased with the result as the Canadians.

The EU Trade Commissioner, Peter Mandelson, said that: “In a week of disappointments this is no small prize. (The agreement in Hong Kong) is “not enough to make this meeting a true success. But it is enough to save it from failure.”