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NEWS: John Manley calls for an end to supply-management

Postmedia News reports, “At the same time it’s promising innovation and a new international trade strategy within the federal budget, the government is protecting an antiquated supply management system that is hurting the economy, business leaders say. …With Ottawa fully engaged in several major bilateral trade negotiations as well as the Trans-Pacific Partnership bloc, there were high hopes that the Tories might signal they’re willing to retreat on their defence of a supply-management system that protects dairy and poultry farmers and forces consumers to pay higher prices, said John Manley, president of the Canadian Council of Chief Executives, said Tuesday in an interview.”

“The 40-year-old Canadian supply-management system protects fewer than 20,000 dairy and poultry farmers, handing them production quotas and shielding them with a tariff wall in a system that ultimately forces Canadians to pay inflated prices for products like milk, cheese, chicken and eggs, said Manley. The government must start planning financially for a move away from supply management because it will probably require federal dollars to buy out quotas over time or compensate farmers reliant on the system, he added.”

“Manley said supply management remains an obstacle to Canada joining the TPP, which is viewed by many observers as potentially surpassing the North American Free Trade Agreement in economic importance. It’s believed TPP members, such as the United States, Australia and New Zealand, have been blocking Canada’s entry into the trade group because of their concerns with supply management. …Prime Minister Stephen Harper, when asked if Canada is prepared to give up supply management to join the TPP, appeared to suggest he’s not ready to bow to those demands at the outset. ‘In those negotiations, of course, you know, Canada will attempt to promote and to defend Canada’s interests, not just across the economy, but in individual sectors, as well,’ he said.”

What is supply management?
A Government of Ontario fact sheet explains, “In Canada, the broiler hatching egg, chicken, dairy, egg, and turkey industries operate under national supply management systems. These systems are controlled by national bodies and by provincial commodity marketing boards that have been delegated powers by federal and provincial governments. The national systems are similar in many ways. The amount of each commodity that is marketed by producers is controlled through a quota system. The volume of the commodities imported into Canada is limited by tariff rate quotas, under which very high tariffs are applied on imports above a specific level. By matching the total supply of the product available in Canada with the market demand, supply management systems aim to provide efficient producers with fair returns and to provide Canadian consumers with an adequate supply of the product at reasonable prices.”

The Trans-Pacific Partnership
On November 13, 2011, Prime Minister Stephen Harper announced that Canada will apply to join the Trans-Pacific Partnership. The TPP is a nine-member Asia-Pacific free-trade proposal being negotiated among the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. Both Japan and Mexico have also expressed interest in joining the TPP. The free-trade pact would affect 600-million people in countries that produce $20-trillion in annual economic output. The concerns that have been raised beyond supply management include: common regulations and rules of origin will be discussed; intellectual-property protections being proposed for drugs would limit access to access to life-saving medicines; investor-state provisions would allow companies to sue governments over rules to protect the environment; government procurement would also be at risk. The nine countries now negotiating the TPP have agreed to complete the broad outlines of the free trade agreement by July 2012.

Recent developments
To read Council of Canadians trade campaigner Stuart Trew’s blog on the most recent round of TPP talks – that took place March 1-9 in Melbourne – go to http://canadians.org/blog/?p=13921.

In a subsequent blog at the end of that 11th round of talks, Trew notes, “An Inside Trade article says Obama is in a hurry to wrap up as much of the TPP talks as possible this year before it or other countries will consider inviting Canada, Mexico or Japan to the table. These expectant entrants will be presented with a fait accompli and asked whether they agree or not (no re-opening of the text). Not much of a negotiation but then this is supposed to be ‘the only game in town in the entire world in terms of big agreements which can unlock trade long-term,’ according to the U.S. Chamber of Commerce. Inside Trade suggests we won’t see a final decision on Canada joining the negotiations until September 2012.”

In a news report on the ‘three amigos’ summit in Washington on April 2, CTV reported that, “Prime Minister Stephen Harper emerged from a meeting with U.S. President Barack Obama and Mexican President Felipe Calderon Monday without learning whether Canada will be asked to join the Trans-Pacific Partnership, the new group pursuing free trade among its member nations. …Both Mexico and Canada hope to join the Trans-Pacific Partnership, but Obama told reporters outside the White House that discussions about adding new members are ‘ongoing’. …Obama said every country, including Canada, would be expected to make changes to some of their practices when joining a multi-nation trade group. Without mentioning supply management specifically, Obama said there are issues the group would like Canada to address…”

Our TPP campaign web-page is at http://canadians.org/tpp.