WTO Deal And Supply Management Can Coexist: Trade Expert

An agriculture trade deal at the World Trade Organization’s Doha round would not have to spell the end of Canada’s supply management system, according to a former senior trade official.

Contrary to what is often said, the decades-old system that protects Canada’s dairy, egg and poultry industries through tariffs, supply quotas and price controls does not have to end when a WTO modalities agreement is reached, said Mike Gifford, Canada’s former head agriculture trade negotiator, in an interview.

Gifford believes an agreement on modalities, which are formulas and targets for tariff and subsidy cuts, is possible by late 2009 or sometime in 2010. From that point it will take an additional 12 to 18 months before the modalities are implemented by WTO members.

“Some people have said it is either Plan A (maintaining the status quo) or if that doesn’t work, then supply management goes. That is not the case. It is going to adapt as it has done over the years since the 1960s when it was first introduced in the dairy sector and it will continue to evolve irrespective of what happens at the WTO. The question is how do players adapt to it,” Gifford said.

The stakeholders in supply management, the provincial and federal levels of government and producers and processors, should sit down and begin to figure out how to manage the situation if Plan A doesn’t work, Gifford said.

In Canada, eventually passing the necessary legislation to implement the trade modalities would be a much easier sell for a majority government than for a minority government, Gifford conceded.

“Even the opposition parties would have to be very careful in assessing what the overall value is of the package to the Canadian economy. Nobody is going to try and deny a trade agreement lightly,” Gifford said.

On balance, an agricultural trade agreement would be positive for Canada, Gifford said.

“Getting rid of export subsidies and reducing trade distorting support in the EU by 80 per cent plus and in the U. S. by 70 per cent plus is going to help level the playing field for those countries that don’t have treasuries as big as the U. S. and the EU. Is it going to be free trade? No, not yet but I think it is going to be more open and fair,” Gifford said.

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