Fading of the WTO not so good news for supply management

Friday, May 1, 2015

With the World Trade Organization losing its credibility as a negotiating forum for agriculture, regional negotiations like the Trans-Pacific Partnership are coming to the fore. And therein critics of supply management see their opportunity

by BARRY WILSON

After almost eight years on the job, federal agriculture minister Gerry Ritz has lost his patience with the drawn-out, arcane and glacial pace of World Trade Organization (WTO) agricultural negotiations.

He has given up on the idea that a world deal between nations big and small to open agricultural export markets, while largely exempting domestic policies such as Canada's supply management system, is possible.

"I don't think I'll see it in my lifetime," the robust 63-year-old Ritz, who presumably expects a long life on this Earth, proclaimed in the spring. Too much talk, too little result and stalemate in the offing.

He has been voicing the same skepticism more privately for years. The former Saskatchewan farmer is a results-oriented guy, impatient with the nuances and sensitivities of international multilateral negotiations. For years, even as he attended multiple WTO conferences, Ritz has been a private and public doubter.

The current Doha Round of negotiations, launched in 2001 in the wake of the World Trade Center attacks, has a mandate that reflects post-9/11 trauma and an image of world agricultural trading countries and trade issues that is woefully out of date.

Add to that the reality that all 160 members of the WTO, some of them with economies smaller than Kitchener, have a veto over any deal and the WTO looks cooked like dinner, at least as a negotiating forum.

For Canada's protected supply-managed dairy and poultry sectors, that should be good news. The potential for a WTO deal that eliminates or emasculates protection for "sensitive" sectors has been seen as the main supply management threat for years, worthy of expenditures of tens of millions of dollars over the past several decades in lobby and propaganda spending to defend the system and counter its critics.

So WTO's growing irrelevance as a trade-rule creator should be good news for the supply managed sectors, right?

Wrong! It is the best hope system critics have had in a generation to see supply-management protections undermined.

For now the trade negotiation focus has shifted from global fora, where progress is almost impossible, to regional or bilateral negotiations where Canada has fewer allies and inertia is less likely to develop.

The Trans-Pacific Partnership (TPP) negotiations, limited to not much more than a dozen countries, offering Canadian exporters access to the world's fastest-growing economies and featuring traditional supply-management critics like the United States, Australia and New Zealand, are the best short-term chance for a deal.

Dreams of a quick solution always have been exaggerated, but the truth is that Canada carries little weight in the group, desperately wants to be part of it and could face exclusion if it refuses to lower or eliminate triple-digit tariffs on dairy and poultry product imports.

The Canadian agricultural exporter lobby Canadian Agri-Food Trade Alliance (CAFTA) clearly sees this as its best chance to win the long-simmering battle, bolstered by conservative newspaper columnists, agrifood manufacturing giants and tenured economics professors who beat the drum.

So last spring, sensing the winds of change and opportunity, CAFTA went where 10 years ago it would not have dared to go – bluntly if obliquely calling for supply management to be sacrificed at the TPP in the cause of increased exports.

"While considerable progress has been made, a meaningful agreement cannot be achieved without a substantive commitment to the comprehensive elimination of tariff and non-tariff barriers," it said. "Any exemptions would jeopardize Canadian exporters' ability to achieve comprehensive access to the world's largest and fastest growing economic regions in the world."

Supply management leaders are scrambling to find ways to propose small compromises that will preserve the broader system, but critics see this as their best chance for an end game.

Can Canada continue to be a major agricultural exporter while preserving some protected sectors?

It is a question farmers and supporters on both sides of the argument should be asking their politicians when the autumn election campaign begins in earnest. BF

Barry Wilson is a member of the Parliamentary Press Gallery specializing in agriculture.