(OTTAWA) –

The Canadian Federation of Agriculture (CFA) says the draft modalities paper released this week by Crawford Falconer, Chair of the WTO agriculture negotiations, still does not go far enough in making real gains for Canadian farmers.

There are three major issues of concern to Canadian agriculture in the WTO negotiations: reduction in trade-distorting domestic supports, increasing global market access, and flexibility for countries to protect specific sensitive commodity sectors.

On domestic supports, although the cuts called for by Falconer appear deep on paper, they would still represent no actual cut in the current real domestic spending in the United States. A 66-73 per cent reduction in allowable U.S. spending would still give the US a $13.1 to $16.47 billion spending limit. In addition to not limiting actual U.S. spending, the proposals could potentially also put Canadian farm safety net programs in jeopardy.

On market access CFA is pleased to see Falconer pushing forwards in promoting a tiered formula for tariff reductions that would see countries with the highest tariff levels subject to the highest cuts for non-sensitive products. However the modalities paper still fails to recommend specific reductions on in-quota tariffs. These reductions are essential if Canadian exporters are to see real market access improvements into protected markets like Europe.

Falconer’s proposals on sensitive products remain completely unacceptable. His paper ignores Canada’s negotiating position on this issue. With Falconer’s proposed reduction in allowable tariff lines Canada would be unable to maintain its supply management system in all supply-managed commodities – dairy, chicken, turkey and eggs. The draft modalities also allow Canada no flexibility to increase market access through in-quota tariff reductions. Canada would once again be forced to increase market access in these areas while other countries, like those of the European Union, would be able to continue their protectionist practices.

The Falconer paper does offer some improvements Canada can support in the negotiations. For example Falconer continues to call for the elimination of all export subsidies by 2013. As well there are stronger proposed regulations for export credits and food aid that would prevent countries from using those programs as disguised subsidies. And it appears Canadian production insurance programs would be accepted as non-trade-distorting ‘Green Box’ programs.

"After the Uruguay Round Canada reduced its subsidies and increased access to its markets while the U.S. kept subsidizing and European markets remained closed. Falconer’s paper still does not go far enough in addressing those inequities," said Bob Friesen, CFA President. "While there are some modest gains to be seen here, the end result for Canada would still be our farmers – both export and domestic producers – giving up much more than they get."

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Founded in 1935 to provide Canada's farmers with a single voice in Ottawa, the Canadian Federation of Agriculture is the country's largest farmers' organization. Its members include provincial general farm organizations as well as national and inter-provincial commodity organizations from every province. Through its members, CFA represents over 200,000 Canadian farmers and farm families.