As negotiations continue on a massive trade deal between Canada and several other pacific countries, dairy and poultry farmers say concessions sought by the United States would upend their industries.
The proposed Trans-Pacific Partnership (TPP) aims to lower trade barriers and increase free trade between 12 countries, including Canada, the U.S., Japan, Mexico and Australia. International Trade Minister Ed Fast – who is also Abbotsford’s MP – is leading the Canadian delegation.
However, several reports suggest that the United States is asking Canada to abandon its supply management system, which guarantees dairy and poultry farmers set prices for their products, which are distributed by marketing boards.
Farmers say supply management is vital to their businesses and that altering or abandoning it – thereby opening Canadian markets up to foreign competition – would severely damage the poultry and dairy industries.
On Friday, Reuters, citing anonymous sources, reported that talks had stalled over agriculture trade rules and that the U.S. is considering excluding Canada from the negotiations if it didn’t make “a serious offer on dairy, poultry and agriculture market access.”
Ray Nickel, the president of the Abbotsford-based BC Poultry Association, said producers have been told that supply management “is a high priority and not going to be traded away,” but he added that farmers remain concerned that secret negotiations could do away with the system with little notice.
Of British Columbia’s 500 poultry producers, 80 per cent are located in the Fraser Valley.
The dairy industry is similarly concerned. In May, the Dairy Farmers of Canada released a statement that called for continued support of supply management, but noted that as talks progress, and trade pressure increases, “the level of anxiety among our farmers and industry partners is also intensifying.”
Agassiz dairy farmer Holger Schwichtenberg, who is also a member at large of the BC Dairy Association, said much depends on the negotiations.
“Look at the Chilliwack or Abbotsford poultry and dairy sectors, and a lot of jobs depend on those healthy sectors, never mind the taxes we generate,” he said. “A lot of us with like 100 or 160 cows, small family farms, there is some concern where this is going. And governments, as we’ve seen, say one thing and do something else.”
Speaking to The News on Tuesday, Fast expressed hope that a deal could be done that maintained supply management.
“We will continue to promote and defend the interests of the supply management system,” he said. “We have negotiated trade agreements with 39 different countries all around the world and supply management has never prevented us from concluding one of those trade agreements and we fully expect the TPP to be no different.”
Fast also expressed hope that a deal would increase the export opportunities available to local farmers.
But he added: “Obviously there are hard decisions to be made.
“What we’re going to look at the end of the day is what is the overall balance of the outcome. My role, my primary role, is to promote the national interest, and if I know a trade agreement will measurably move Canada forward in ensuring long-term prosperity and growth, that is the kind of agreement our government would sign.”
Last Thursday, Bloomberg News reported that Fast had told its editorial board that joining the TPP was a “once-in-a-generation opportunity for Canada” and that it wouldn’t sacrifice the deal for its dairy and poultry sectors.
“We have said to the supply-managed industry we will continue to promote and defend their interests whenever we negotiate trade agreements, but I think they also understand we have to find a balance that allows the rest of the economy to participate within the global marketplace,” Fast told Bloomberg News. “All issues are open for discussion in negotiations.”
Nickel told The News that while farmers realize that trade deals require compromises, the Canadian poultry industry “can’t sustain a lot more unfettered access.”
While other countries argue that Canadian trade barriers block their access to the local market and some commentators say they increase prices, Nickel said the system allows producers to operate without the taxpayer-funded subsidies given to farmers in other countries.
“Consumers are not paying any tax-hidden cost.” He said price disparities are worst closer to the border because American distributors increase supply in order to draw Canadian customers.
Nickel said the system also allows smaller farmers to operate and discourages factory-farming practices seen in the U.S.
“The fear is that if you start to dismantle our system here …. it will completely effect the way our economy works,” he said.
Nickel worries that the TPP will be a repeat of a previous trade agreement in which a last minute deal gave European producers more access to Canada’s cheese market without consultation with industry.
“We believe very strongly that the Canadian consumer and our society benefits significantly from supply management. Don’t compromise it with some trade deal here that is going to affect the access of domestic products we’re already supplying.”
Talks on the deal are continuing, with another set of talks scheduled for later this month in Hawaii.