Supply Management: Doha: Quo Vadis?

An overview of the important issues in the Doha Round

Negotiations at the World Trade Organization, especially the so-called Doha Round, have been a threat to Canadian supply management for many years.

Doha is the capital city of Qatar, an emirate in the Middle East. It was here, during November of 2001, at the Fourth Ministerial Conference of the World Trade Organization, that negotiations became known as the “Doha Round of Negotiations.”

Its long-term objectives were set “to establish a fair and market-oriented trading system through a program of fundamental reform encompassing strengthened rules and specific commitments on support and protection in order to correct and prevent restrictions and distortions in world agricultural markets.” Players committed to “comprehensive negotiations aimed at: substantial improvements in market access; reductions of, with a view to phasing out, all forms of export subsidies; and substantial reductions in trade-distorting domestic support.”
Negotiations continued through meetings in Cancun (2003), Geneva (2004), Hong Kong (2005) and Davos (2007), with an alarming trend of missed deadlines on agreements reached. Progress was slow, but steady.

Just when the process became so slow that it was risking complete shutdown, new momentum was created by the WTO agricultural chair Crawford Falconer when he tabled his ‘challenges” paper on April 30, 2007. 

Judi Simmons, Manager, International Trade Policy, Canadian Egg Marketing Agency, reports, “Falconer’s overall objective is to identify where, what he calls “the center of gravity” exists, with respect to various important negotiating issues.

“Overall, Falconer identifies the issues for which it is essential to find a compromise in order to conclude this round – no matter when that might be. Falconer makes attempts to push both the EU and US to move away from their respective positions on certain issues, but he also tries to accommodate them on other issues.”

She continues, “The “center of gravity” identified by Falconer creates many difficulties for supply management.

From a broad-strokes perspective, what really jumps out is that Canada’s interests on sensitive products (supply management) have not been reflected, in any way, in this challenges paper.”

Canada’s dairy, poultry and egg producers responded on May 2 with a news release, calling Falconer’s document”
disappointing”, failing to reflect the Canadian position on trade. It states, “Particularly alarming … is that the paper entirely disregards Canada’s stated position on sensitive products.”

It calls on the Canadian government to “speak out vigorously against the sensitive products section in the challenges paper.”

On July 17 Falconer followed the challenges paper with its basis for negotiations, the so-called first draft of his
“modalities text.”

On July 18 Canadian dairy, poultry and egg farm leaders rejected the paper as the text threatens the future of Canadian dairy, poultry and egg industries.

“This paper only confirms the serious concerns we shared with agriculture ministers in June,” said Jacques Laforge, president of Dairy Farmers of Canada. “These modalities are detrimental to supply management: there are too few sensitive products allowed and they are treated very harshly. They show why Canada must work very hard if it is to achieve a WTO agriculture agreement that supports supply management: there are provisions that clearly offer flexibility for other countries and none for Canada’s supply management sectors.”
David Fuller, chairman of Chicken Farmers of Canada, also reacted strongly. “The text would actually force Canadian farmers to cut back production in favour of products from other countries, at a time when consumers increasingly want locally produced food,” he explains. “It actually threatens the ability of a country to decide where they want their food to come from. The Canadian Government must stand firm and clearly tell its trading partners that it cannot accept this text.”

Dairy, poultry and egg farmers reiterated that the Government of Canada must urgently find ways to influence the direction of the negotiations and achieve a successful outcome at the WTO. The Government must preserve the pillars of supply management so that negotiations bring no negative economic impact on supply management farmers.

“This text actually shows Canada losing ground in the defence of supply management since the ‘challenges paper’ issued by Falconer in June,” said Gyslain Loyer, chairman of the Canadian Broiler Hatching Egg Marketing Agency. “The number of suggested tariff lines that could be included as sensitive products is even less than a month ago, and only half of what would be needed for dairy, egg and poultry products to even be considered in the sensitive product category.”

Leaders of Canada’s dairy, poultry and egg farmers continue to offer their co-operation for discussion on the negotiating strategy and all the tools that would help obtain a positive final outcome in the negotiations. “The Government must not waste any more time and must immediately find ways to negotiate flexible provisions for Canada’s dairy, eggs and poultry,” said Laurent Souligny, Chairman of the Canadian Egg Marketing Agency.
Despite the Canadian objections, the draft modalities text on agriculture has been generally accepted at the WTO as the basis for further negotiations in the fall, Simmonds reports. “Many indicated their concerns with various portions of the text, but overall, it was welcomed as a positive initiative.

“The section on market access is the one that generated the most comments. This makes sense given it is the most sensitive among all countries as well as the one where the most gaps remain to be negotiated.

“Canada did speak out about the various parts of the modalities document that are difficult for Canada/supply management, but did also welcome the text as the basis for negotiations in September. We continue to face an uphill battle and our challenges are simply being postponed to the fall.”

Negotiations are resuming in early September and it is expected they will culminate in a Ministerial meeting (with binding agreements) towards the end of the year. n