Supply-managed sectors bolster defenses against TPP

Reuters — Canadian farmers are stepping up their campaign against a nearly complete Pacific trade pact they fear will destroy protections for local dairy, egg and chicken producers and endanger jobs.

Farmers in Quebec, which produces 40 per cent of Canada’s dairy products, ran full-page newspaper advertisements on Tuesday warning Trans-Pacific Partnership (TPP) negotiations threaten incomes and jobs.

The ads, featuring pictures of pitchforks, defend the country’s supply management system, which shields farmers from fluctuating prices by controlling production and limiting imports.

Canada’s partners in the TPP, which would link 12 countries and 40 per cent of the world economy, are growing increasingly frustrated with Ottawa’s refusal to discuss its dairy market as many think the deal could be done in weeks.

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The rising pressure makes farmers worry about a repeat of last-minute concessions on cheese given in a European trade deal, although an about-face could cost the governing Conservatives votes in October’s general election.

“Any market volume that is not produced in Canada… means (fewer) farms, less milk being produced,” said Milk Producers of Quebec spokesman Francois Dumontier.

U.S. Agriculture Secretary Tom Vilsack warned Canada could be sidelined if it kept stonewalling and negotiators stress there is no time for multiple rounds of back-and-forth.

A senior U.S. official said Ottawa had not even laid the groundwork for more open markets through discussions with domestic stakeholders.

“There isn’t a scenario I can see where they both have TPP and don’t make an offer so time’s getting tight,” said the official, who asked not to be named.

The U.S. wants to export a full range of dairy products, including milk, butter, cheese, whey and yoghourt, as part of a package benefiting Canadian agriculture overall.

It is prepared to discuss options for sensitive goods, including tariff elimination over several years or tariff-free quotas which increase over time — without necessarily scrapping supply management, the official said.

“You could do this a lot of ways and give our milk producers options that are good,” the official said, without detailing potentially acceptable volumes or tariff levels.

Dairy Farmers of Canada is running digital ads noting the industry supports one in 10 jobs and generates $18.9 billion in economic output, and the government is showing no sign of compromise.

“We will not sign a trade agreement unless it is in Canada’s best interest,” Canadian Trade Minister Ed Fast told Reuters during a visit to the Philippines.

In a joint release Tuesday, Canada’s dairy, egg and poultry groups noted they “understand that the level of pressure from our trading partners is increasing” but appreciate Canada’s defense of its supply-managed sectors.

The groups on Tuesday also disputed other countries’ claims that Canada’s supply-managed commodities are protectionist, calling such claims “unfounded.”

Canada, the groups said, today provides “more access to our markets than many other countries, including the U.S.,” and imports more chicken than six of the other TPP countries combined, including the U.S.

Krista Hughes is a Reuters international trade correspondent based in Washington, D.C. Additional reporting for Reuters by David Ljunggren in Ottawa and Rosemarie Francisco in Boracay, Philippines. Includes files from Network staff.


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