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Treading Water

Now is not the time for producers to let up their resolve to have a positive outcome


May 22, 2009
By Dan Woolley

Topics

It is time for supply managed producers to drag out the heavy artillery
of political lobbying in the fight over the next WTO global trade
agreement.

It is time for supply managed producers to drag out the heavy artillery of political lobbying in the fight over the next WTO global trade agreement.

30 
 With what is now on the table at the WTO (shown above), Canada will  have to increase market access by six per cent. Canada is now required to import 21.37 million dozen eggs under WTO’s previous Uruguay round negotiations. Photo courtesy WTO

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Peter Clarke, 1st vice-chairman of the Egg Farmers of Canada told the Nova Scotia Egg Producers (NSEP) annual meeting: “Now, is not the time for producers to let up their resolve to have a positive outcome from these negotiations.”

Clarke reminded NSEP members WTO negotiations are a political process, “and the politicians will be in the room at the 11th hour to determine what can be traded off, or not traded off for Canada.”

Judi Bundrock, who manages EFC’s international trade file, observed that, although Canada has won some small victories at the current round of WTO negotiations, “progress has been made  and it is not moving in favour of our industry.”

She echoed Clarke: “ Lobby your representatives everywhere, nationally and provincially…educate the public.”

The draft modalities (the proposed binding agreements) were published last year after lengthy and intensive negotiations, said Bundrock, noting these documents indicate where potential consensus may lie among the vast majority of WTO-member countries. “There is one thing perfectly clear: There is a certain amount of consensus that is building that will bring us one step closer to a final modality.”

The United States and the European Union have moved off their previously firm positions and now there is forward movement, she said, “and it is certainly not in our favour and the egg industry in particular.”

At present the negotiations, “are treading water,” as the new U.S administration reviews its trade position and of the preceding U.S. government and India gets ready to hold its general elections,  Bundrock said.

Many issues surrounding NAMA (non-agricultural market access) and agriculture, she added, are of particular concern to these two countries.

Bundrock stated the meeting of the G20 heads of state early in April is expected to issue, “a fairly strong statement,” to their trade ministers to conclude the current Doha round. 

The WTO’s director-general, Pascal Lamy, has expressed a desire to have the modalities negotiations completed by July and the governments involved signing the modalities agreement by the end of that month, she said.

Bundrock observed there are, “three big issues,” that have the potential to impact the Canadian egg industry.

One is the number of “sensitive products” a country could select for less harsh treatment from more exposure to increased import competition.

Outside of Canada and Japan, Bundrock noted there is a consensus only four per cent of its agricultural product lines can be selected by a country as sensitive, but added, “there is a small glimmer of hope.”

Crawford Falconer, chairman of WTO’s agricultural negotiations, has stated a country could designate six per cent of its agricultural product lines as sensitive. Bundrock stressed that Falconer said could, not can.

The second issue, she mentioned, is that increasing market access could have imported products displacing domestic commodities in the Canadian market.

Outside of Canada, said Bundrock, there is an agreement among the other WTO partner countries, to reduce the tariff from 163.5 per cent to 126 per cent.

Even at 163.5 per cent foreign products have been able to make it over the tariff wall, she said, which means the proposed tariff reduction would result in more displaced domestic production, equivalent to a $146-million loss in egg farmer earnings, which would also be lost revenue for Canada.

With what is now on the table at WTO, continued Bundrock, Canada will also have to increase market access by six per cent, noting that Canada is now required to import 21.37 million dozen eggs under WTO’s previous Uruguay round negotiations.

With increased access under the current Doha round, she said, Canada would have to import another 29 million dozen eggs, for a new total of 51 million dozen eggs.

Canada has lowered its import barriers more than its other trading partners have, abiding by the Uruguay round conclusion, while other countries evaded its rules, contended Bundrock.

“Why should we be forced to import more than our other trading partners?”

Increased market access under the current WTO negotiations, she claimed, could cost the Canadian egg industry an extra $59 million, more than 35 per cent of the egg industry’s present farm cash receipts.

Despite the proposed tariff cap on the WTO table of 100 per cent for sensitive product lines, she insisted; “It is definitely a serious issue for our industry.”

In the past several years, supply management has had to go through many changes, she said, commenting: “Nothing on the table now is of any benefit to the egg industry or supply  management.”

The Canadian government has declared it seeks a zero decrease in over-quota tariffs and a zero increase in market access; but  Bundrock wondered: “How are they going to deliver on this?” She expected at the 11th hour of WTO negotiations” a political fix,” which could be “both risky and expensive as payment of some kind would be expected.”


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