All Things Considered: January 2011
Canada’s poultry farmers may have another prospective trade deal to worry about.
Canada’s poultry farmers may have another prospective trade deal to worry about.
This one, interestingly enough, has seemingly come out of nowhere. It wasn’t ushered in with the international pomp and ceremony of the WTO’s Doha talks. It doesn’t carry the closed-door cache of Canada’s free trade negotiations with Europe. This one kind of snuck up.
It is called the Trans-Pacific Partnership, or TPP. Presently, it involves just four small nations: Singapore, New Zealand, Chile and Brunei. It is, according to Wendy Dobson and Diana Kuzmanovic of the University of Calgary School of Public Policy, “a high-quality, comprehensive free trade agreement – one of the few in existence.”
In other words the TPP is about real free trade. It isn’t one of those lily-livered deals like the WTO where barriers are bartered, or NAFTA with escape hatches buried in the rhetoric.
A recent Canadian Press story said: “The Harper government is eyeing a new Asia-Pacific economic block – the Trans-Pacific Partnership – and may be willing to negotiate aspects of Canada’s supply management system for certain farm products in order to get in.”
The reason Canada is looking at the TPP is straightforward – it appears to be growing, with the United States, Australia, Vietnam and Peru preparing to join and Japan and other East Asian countries taking a hard look.
The Canadian Press report says: “No decision has been made about whether Canada will formally request to join the club.”
But Trade Minister Peter Van Loan told the Canadian Press that Canada has indicated its interest and is in the process of assessing whether or not it will seek to join and if it would be welcomed.
A reason Canada might not be welcomed is supply management. The United States, arguing on behalf of its poultry industry, wants supply management gone. New Zealand, which is the world’s premier dairy exporter, wants access to Canada.
If Canada were to try and gain entry to the TPP everything, including supply management’s tariffs and quotas, would have to be on the table.
“It’s quite normal and natural for each country to have sensitivities, but we agreed in the European Union talks that all issues are on the table and if we were to enter into the TPP, it could be on the same basis,” Van Loan told the Canadian Press.
But Canada will not abandon supply management as a precondition for membership, he said.
It might, however, have little or no choice. The current talks use what Dobson and Kuzmanovic call a “negative list approach” whereby things are in unless specifically excluded.
“Coverage already includes goods (even agriculture), services obligations, intellectual property, screening of foreign investment, pharmaceuticals, government procurement, services that improve the business environment such as customs arrangements, and standards such as sanitary and phyto-sanitary ones,” they write.
For Canada to gain entry into the TPP it might have to dramatically change or wipe out supply management. As previously mentioned, the United States is no friend of supply management and New Zealand is, if anything, even more harshly against it.
New Zealand is interesting. It is the world’s largest exporter of dairy products, it has an absolute economic advantage in the production of dairy due to climate and the skill of its producers and dairy is far and away the country’s largest export. It exports about 95 per cent of its dairy production and the vast majority of the production and virtually all of the exports come from one company – a co-operative owned by more than 10,000 dairy producers. Canada has nothing – in any industry – that compares.
Dobson and Kuzmanovic write that Chile was also sensitive to changes in agriculture policy but “has agreed to phase out its tariffs by 2017 using safeguards during the transition period.”
If Canada were to join it “might need to rationalize its supply-management programs by, for example, phasing in the liberalization of quotas,” they write.
They conclude by writing: “The status quo in Canada is not a compelling one: the border with the United States is thickening, and Canada has been left out of the potentially game-changing Trans-Pacific Partnership agreement. Canadian policymakers now must up their game. While there may be opposition Canada must move forward, they say. “The case for change has been made. Can Canadians afford not to try?”
The argument requires the belief that the U.S. policies currently affecting Canada would change if we join the TPP. That may not happen. It also requires that one accept that the trade gains to Canada from joining the TPP would outstrip the costs. That is unclear.
What is clear is that poultry and dairy farmers have another prospective trade deal they’ll have to keep their eyes on.
Dobson and Kuzmanovic’s paper can be found at www.policyschool.ca .
This one, interestingly enough, has seemingly come out of nowhere. It wasn’t ushered in with the international pomp and ceremony of the WTO’s Doha talks. It doesn’t carry the closed-door cache of Canada’s free trade negotiations with Europe. This one kind of snuck up.
It is called the Trans-Pacific Partnership, or TPP. Presently, it involves just four small nations: Singapore, New Zealand, Chile and Brunei. It is, according to Wendy Dobson and Diana Kuzmanovic of the University of Calgary School of Public Policy, “a high-quality, comprehensive free trade agreement – one of the few in existence.”
In other words the TPP is about real free trade. It isn’t one of those lily-livered deals like the WTO where barriers are bartered, or NAFTA with escape hatches buried in the rhetoric.
A recent Canadian Press story said: “The Harper government is eyeing a new Asia-Pacific economic block – the Trans-Pacific Partnership – and may be willing to negotiate aspects of Canada’s supply management system for certain farm products in order to get in.”
The reason Canada is looking at the TPP is straightforward – it appears to be growing, with the United States, Australia, Vietnam and Peru preparing to join and Japan and other East Asian countries taking a hard look.
The Canadian Press report says: “No decision has been made about whether Canada will formally request to join the club.”
But Trade Minister Peter Van Loan told the Canadian Press that Canada has indicated its interest and is in the process of assessing whether or not it will seek to join and if it would be welcomed.
A reason Canada might not be welcomed is supply management. The United States, arguing on behalf of its poultry industry, wants supply management gone. New Zealand, which is the world’s premier dairy exporter, wants access to Canada.
If Canada were to try and gain entry to the TPP everything, including supply management’s tariffs and quotas, would have to be on the table.
“It’s quite normal and natural for each country to have sensitivities, but we agreed in the European Union talks that all issues are on the table and if we were to enter into the TPP, it could be on the same basis,” Van Loan told the Canadian Press.
But Canada will not abandon supply management as a precondition for membership, he said.
It might, however, have little or no choice. The current talks use what Dobson and Kuzmanovic call a “negative list approach” whereby things are in unless specifically excluded.
“Coverage already includes goods (even agriculture), services obligations, intellectual property, screening of foreign investment, pharmaceuticals, government procurement, services that improve the business environment such as customs arrangements, and standards such as sanitary and phyto-sanitary ones,” they write.
For Canada to gain entry into the TPP it might have to dramatically change or wipe out supply management. As previously mentioned, the United States is no friend of supply management and New Zealand is, if anything, even more harshly against it.
New Zealand is interesting. It is the world’s largest exporter of dairy products, it has an absolute economic advantage in the production of dairy due to climate and the skill of its producers and dairy is far and away the country’s largest export. It exports about 95 per cent of its dairy production and the vast majority of the production and virtually all of the exports come from one company – a co-operative owned by more than 10,000 dairy producers. Canada has nothing – in any industry – that compares.
Dobson and Kuzmanovic write that Chile was also sensitive to changes in agriculture policy but “has agreed to phase out its tariffs by 2017 using safeguards during the transition period.”
If Canada were to join it “might need to rationalize its supply-management programs by, for example, phasing in the liberalization of quotas,” they write.
They conclude by writing: “The status quo in Canada is not a compelling one: the border with the United States is thickening, and Canada has been left out of the potentially game-changing Trans-Pacific Partnership agreement. Canadian policymakers now must up their game. While there may be opposition Canada must move forward, they say. “The case for change has been made. Can Canadians afford not to try?”
The argument requires the belief that the U.S. policies currently affecting Canada would change if we join the TPP. That may not happen. It also requires that one accept that the trade gains to Canada from joining the TPP would outstrip the costs. That is unclear.
What is clear is that poultry and dairy farmers have another prospective trade deal they’ll have to keep their eyes on.
Dobson and Kuzmanovic’s paper can be found at www.policyschool.ca .