Given that it's partially funded by the federal government and is the only remaining agriculture think tank after last year's demise of the George Morris Centre, it's a safe bet that this is a Harper-government trial balloon.
The other nations in the negotiations want to keep Canada on
the defensive over supply management, says the Institute, but there are lots of
other issues in their own back yards that could be addressed.
One is their own hidden subsidies that ought to disqualify them from exporting.
A lot of dairy components are now entering
Canada tariff free. The United States also has no tariffs on these components
coming from Canada, but is protected by World Trade Organization rules.
Canada is limited to quotas for dairy exports because supply
management has been deemed to be a subsidy on all milk, including milk used to
make products for export.
That makes exporting beyond the quotas illegal under World
Trade Organization rules. There were some who said at the time that Canada
ought to try producing for export from herds that are not part of supply
management, but the provinces have not been willing to change their regulations
to allow that to happen.
The Institute says that other nations exporting dairy
products have their own subsidies. Canadians ought to become aggressive about
pointing them out during the TPP negotiations so a fairer deal can emerge.
The Institute also says Canada could draw attention to
environmental impacts. A lot of U.S. milk is produced in areas where water is
scarce and is drawn from aquifers that are being depleted. That is another “hidden
market failure,” says the Institute.
And so Canada could be “opening up a new front” in the TPP
negotiations on environmental and resource sustainability, says the Institute.
“Improving
sustainable production is not going unnoticed. Global supply chains are now
procuring many products, such as palm oil, fish and coffee, only from
sustainable sources,” says the Institute.
“Becoing
a global advocate for the elimination of foreign government-subsidized
agricultural practices (including their environmental impacts), may be in our
national interest. This would be a big step beyond driving down tariffs or
increasing market access.
Doing away with subsidized production and raising the
environmental bar even slightly for our competitors would be a calculated
strategic move. It may eliminate some highly inefficient competitors and those
requiring massive investment to meet even the most minimal sustainable
requirement. However, prices would better reflect real costs which would bode
well for our agri-food trade.
“While Canada is a food safety leader, its performance on
farm-to-fork traceability is uneven. We would need to be a leader in
traceability to demonstrate our sustainability footprint on a comparative
basis.
Our next trade agenda could assume a three-pronged approach.
Unravelling these indirect subsidies and demonstrating Canada’s comparative
advantages on sustainability performance could become key planks in our future
global trade strategy, benefiting the agri-food sector as a whole.
And, with the clock ticking for our dairy sector in mind,
taking concerted action on dairy export rules may allow Canada to be more
competitive on dairy than is commonly appreciated, says the Institute.
I have always said that other nations protect their dairy industries; the only difference is that Canada has chosen to do it via supply management. Getting to fair global free trade would be difficult because so many different national policies are involved, and a gradual approach would result in temporary trade advantages for some nations.
The situation is entirely different for Canadian supply management for the poultry industry. It's impossible to justify on the basis of global trade fairness.
