Editorial: Customers, not competitors, come first

Beef products at a Japanese market.

Is there anyone out there who thinks it’s a good thing for Canadian agricultural representatives to join with their competition from other countries to criticize their best customers?

The answer is almost certainly no, but on the other hand we didn’t hear any objections when the Canadian Pork Council did exactly that earlier this month. Together with pork organizations in Australia, Canada, Chile, Mexico, and the United States, the CPC issued a statement calling for “a comprehensive, high-quality Trans-Pacific Partnership (TPP) agreement in which full tariff elimination is achieved for virtually all products including pork.”

“Reports that Japan has made unacceptable tariff offers in each of the agricultural sectors it considers sensitive, including pork, compel us to express our deep concern that these critical market access objectives will not be achieved,” the statement said, calling for Japan to drop its “untenable” position.

Though the statement didn’t use the word, it sparked a Globe and Mail story about Japan’s “protectionist” stance, a word we’ve heard time and time again over the years in reference to the TPP or World Trade Organization (WTO) negotiations.

Would that we had more “protectionist” and “untenable” customers. Japan is Canada’s third-largest export customer by value for all agricultural products, and the second largest for pork after the U.S. It imports 45 per cent of its pork, and has doubled its pork imports in the last 20 years. It imports more than half of its beef.

Much of the pork and beef that Japan does produce itself is raised on imported feed grain, of which it is by far and away the world’s largest importer. It is also one of the world’s largest importers of wheat, which has been at the expense of consumption of rice, Japan’s traditional crop.

In fact, Japan is already the least food self-sufficient among the industrialized countries. In 1960 it produced 79 per cent of its own food. That dropped to below 50 per cent in 1989 and is now below 40 per cent. Just how little of their own food will Japanese be allowed to produce before they are no longer considered “protectionist?”

Even more concerning about these accusations is that Japan is not only a big customer, it’s one that always buys top quality, literally week in and week out through the year, paying premium prices, cash on the barrelhead.

The pork council is repeating past sins of the Canadian canola industry, which might not be anywhere near as large today had it not been for Japan being the largest and steadiest customer for so many years before canola was allowed for human consumption in the U.S. As thanks for that, the Canadian industry has accused Japan as being protectionist for preferring to buy raw seed instead of oil.

Maybe, but remember that this is a small country with a big population that has few natural resources — it can’t even feed itself. Its economy — and therefore its ability to be such a good customer for our products — depends on being able to do its own processing to add value.

What’s even worse about these statements is that they are in aid of lost causes. The latest Doha Round of the World Trade Organization agreement has been going for 13 years now, and may have been dealt a death blow a few weeks ago when India refused to sign. Why? Because it would have prevented India from building buffer food stocks to feed its population in the event of a poor crop.

The TPP is likely to suffer the same long and drawn-out failure, and in the end it won’t have anything to do with farm products. If you read the Globe and Mail or the National Post, you would think that the only issue at play in the TPP is agriculture, and that Canada’s support of supply management is the main sticking point. The pork council’s statement just feeds this misconception — in fact that may have been the main reason for it.

There are 12 countries in the TPP negotiations, and each has internal interests to protect. There are many other sticking points, including copyright and intellectual property, where the U.S. is said to be far apart from other countries. The U.S. Congress has not yet given the president the Trade Promotion Authority needed to negotiate the agreement, and many members of President Obama’s own Democratic Party oppose it.

If the TPP negotiations ever get to the point where other countries — especially the U.S. — are prepared to lower their subsidies, then would be the time to put supply management on the table. That’s going to take a long time, if ever. In the meantime, the Japanese will be buying a lot of Canadian pork, and the pork council should be more worried about good relations with its customers, not its competitors.

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