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Copyright © 2001 Eastern Ontario Farmers Forum Inc. All Rights Reserved

WTO talks already affect every farmer

 

For as long as marketing boards have been around people have been predicting their demise, especially before or during a round of trade talks. After the first North American Free Trade Agreement (NAFTA) was signed, the price of egg quota fell by almost half, says Laurent Souligny. But producers were not harmed.

Chairman of the Canadian Egg Marketing Agency, he says a lot of work still needs to be done at the negotiating table for the current talks, but he’s optimistic the government will defend Canadian farmers. The premiers and the prime minister have signed a declaration of support for the Quebec farmers union, he says.

But changes are upon us. The 147 nations in the negotiations have already made concessions, effective immediately, agreeing to cut 20 per cent of the domestic support allowed in the last GATT talks. Steve Verheul, Canada’s chief agricultural negotiator, says Canadian farmers will lose a modest amount, because Canada hasn’t come close to using the $3.4 billion allowed annually by the WTO. The disaster part of the new safety net program will escape but the income protection or stabilization component will take a hit. The U.S. Farm Bill programs will lose the full 20 per cent.

Though there is no definite deadline, a December 2005 meeting is expected to trigger more cuts. But Verheul doesn’t expect them to be cataclysmic. Supply managed boards will have to give up some access and the high tariffs will be lowered.

What are marketing boards hoping? Chickens in Canada have a tariff of 238 per cent and the country previously opened 7.5 per cent of the chicken market to foreign countries. Last year, Canadian chicken farmers produced 934 million kilograms of chicken. Canada was the sixth largest exporter of chicken in the world but also the tenth largest importer. As long as Canada doesn’t give away more than five per cent of the market and other nations are forced to honour their commitments, marketing boards will do all right, says Paul Ruel, manager of trade policy for Chicken Farmers of Canada.

But chicken farmers might not be happy campers in a few years. Verheul says the only thing agreed upon by the 147 nations is that market access must increase and level of tariffs reduced, with the highest levels of tariffs getting the deepest cuts. Sensitive products — milk and dairy products, eggs, chickens, rice and cotton — will be subject to a special formula yet to be made public. Flexibility will be built in, permitting one commodity to be sacrificed for the benefit of others. A nation will be required to meet overall targets.

However, the Doha Development Agenda that came out of Geneva in July is a gentler document than the one from Mexico more than a year ago. Verheul calls the current negotiations a process. "The Agenda is more in line with the political realities of the countries represented," he says.

WTO officials understand that the elimination of support, whether of farm subsidies or tariffs, could have devastating effects on some rural communities and the future of politicians.

Still, despite the optimism and faith in Canadian negotiators, there are some troubling aspects. First, given the U.S. penchant for keeping out our beef, pigs, soft wood lumber and wheat, along with our own government’s tepid responses, how can we trust our government to make sure Canadian farmers get a decent settlement? Look at our record. Canada imported (US)$9.6 billion in agricultural products last year from the U.S. The U.S. secretary of agriculture, Ann Veneman says (US)$1 billion in agricultural exports created 25,000 jobs. We provide a quarter of a million jobs for Americans; and even though the international organization that monitors disease and trade says there’s no reason to keep the border closed, we can’t negotiate an opening for live cattle.

Secondly, the Doha agreement says that tariffs will be reduced progressively and in the end substantially. Does that mean hardship is coming?

Canadian cattlemen and dairy farmers figure there’s more mercy in hell than in Washington. Who can be sure there’s a kinder, gentler WTO?

T. Meagher