CFA challenges Minister’s comments on WTO talks

(OTTAWA) – The Canadian Federation of Agriculture (CFA) is concerned about recent remarks made by International Trade Minister Jim Peterson concerning World Trade Organization (WTO) negotiations. In an interview the Minister praised the proposal put forward by the United States, calling it a “serious offer”. CFA contends the U.S. proposal still represents no real concession on the part of one of the world’s largest agricultural subsidizers and will offer little benefit for either Canada’s exporters or its sensitive domestic commodities.

“The U.S. offer may sound generous, but in terms of real subsidy dollars they haven’t given up a penny,” said Bob Friesen, CFA President. “I’m glad to hear Minister Peterson say he will be examining this offer in terms of its actual impact on agricultural subsidies. But I think he should have done that before speaking so positively in the media about U.S. leadership.”

The U.S. has offered to reduce by 60 per cent its maximum subsidy spending limit currently allowed under WTO rules. However, the U.S. does not currently spend its maximum allowed. In fact, the U.S. would have to reduce its maximum by over 66 percent before it would even begin to cut a single real dollar from the billions it spends on trade-distorting subsidies today.

The U.S. position continues to push for product-specific caps on agriculture support, based on historical spending. This would allow the big spender like the U.S. and Europe to keep giving their farmers billions of dollars while simultaneously creating a glass ceiling for countries like Canada that have already  reduced their spending in accordance with the spirit and principles of freer trade.

Further, the U.S. proposal is not aggressive enough on non-sensitive products while forcing sensitive commodity sectors to increase access. This would create a lose-lose situation for Canadian farmers where supply-managed domestic commodities would have to give up a share of their market access without Canadian exporters like grains and pork producers getting a substantial increase in global market access in return. The proposal also still targets the Canadian Wheat Board, attempting to deny Canadian grain farmers the right to choose their own marketing structures.

“Canadian farmers really want a successful conclusion, as soon as possible, for the Doha round - but not at any cost,” said Friesen. “The only acceptable outcome is one that creates fair and equitable trade rules. The U.S. proposal is not positive leadership or a reasonable concession. It is just a reinforcement of the old disparities.”