Supply management could adapt to TPP deal: report
April 23 - By John Greig - A policy paper for the Canadian Council of Chief Executives, released today, says that Canada doesn’t have to abandon its supply management sectors to become part of the Trans Pacific Partnership.
But it might have to loosen control somewhat on protected dairy and poultry sectors.
The paper was written by Michael Gifford, who was Canada’s chief agricultural trade negotiator for many years, through the NAFTA and the World Trade Organizations Uruguay round, so he was intimately involved in getting those deals done while maintaining controls which enabled supply management to continue.
Gifford says that agricultural trade is increasingly flowing to Asia, as population increases and urbanization happens there. China is expected to be the world’s largest agricultural import market by 2020.
World trade is increasingly governed by regional pacts with exclusive membership. The Trans Pacific Partnership would be one of the largest such agreements including Brunei, Chile, New Zealand, Singapore, Australia, Malaysia, Peru, United States, and Vietnam.
Japan and Canada are trying to join, but both have protected agriculture sectors. Canada has a significant export sector, and 80 per cent of Canadian agriculture is tied to world prices.
If Japan were to join and Canada did not, it would face a significant competitive disadvantages, as Canada is already a major supplier of agriculture commodities to Japan. President TPP members Australia and United States are also competitors in Japan.
“Fortunately, there may be a way around these problems. Given the various sensitivities around the table, the most likely result of the TPP talks is the partial, rather than complete liberalization for a (limited) number of the most sensitive products,” Gifford wrote.
Japan limits access to its rice market, as the United States does with sugar and to some extent, dairy products, Gifford notes.
He predicts Canada would have to allow more dairy and poultry imports, but would still be able to enable supply managed industries to function.
“Supply management, in other words, need not be an insurmountable challenge to Canada’s broad trade ambitions.”