The CFA flags concerns over latest WTO Doha agreement text

OTTAWA, May 22, 2008—Leading up to this Monday’s meeting of WTO agricultural trade negotiators, Canadian farm leaders are voicing their views on the latest modalities text released by Crawford Falconer, Chair of WTO agriculture negotiations. While the new text demonstrates valuable progress for Canadian exporters and improvements for the domestic industry, the Canadian Federation of Agriculture (CFA) raises serious concerns that provisions in the new text will be detrimental to Canada’s supply-managed sectors. 

“Trade talks are advancing well for our export sectors, but unfortunately there are still major disparities when it comes to sensitive products,” said Bob Friesen, CFA President. “The CFA commends the Canadian government’s active involvement during this period of uncertainty and intense negotiation, but we urge our trade negotiators to continue working with Mr. Falconer and other countries’ representatives to address the current gaps in the text related to our supply managed industries.”

As for details of the text, the CFA is encouraged to see significant reductions in domestic support and the complete elimination of export subsidies; however, areas of market access continue to be clouded by uncertainty.

In contrast to the positive text developments, the CFA is disappointed that provisions to protect supply management continue to be whittled away with each revision of the modalities text. Under the new text, each country’s tariff line allocation for sensitive products would be limited to 4-6 percent. This provision is not nearly strong enough to preserve Canada’s supply-managed sectors. Furthermore, the role of Special Agriculture Safeguard tools remains a contentious issue among WTO members.  The CFA warns that the reduction or complete elimination of these safeguards may severely hinder the industry should a product dumping situation occur.

Although the expansion of export competition is seen as positive, the CFA remains concerned that recent revisions of the modalities have included the elimination of agricultural export monopoly powers by 2013.  This condition would put considerable pressure on Canadian marketing legislation that allows farmers to maximize revenue from the international market place. CFA maintains that, while disciplines on state trading enterprise (STEs) are appropriate, the decision to establish an STE with monopoly powers is an internal affair that should not be subject to blanket prohibition under the WTO.

The U.S. Farm Bill will undermine the objectives of the Doha trade talks

In light the U.S. Congress’ recent passage of the new farm bill, the CFA stresses that Canadian negotiators must remain firm with their American counterparts during meetings in Geneva.

“The U.S. government is certainly sending mixed messages on its intentions for the Doha round,” said Friesen. “Members of the CFA urge the government to carefully consider the potential impact of the new farm bill during WTO trade talks.

The $290 billion Farm Bill is laden with the generous farm subsidies, and it introduces several new programs that fly in the face on what the Falconer text has proposed. Canadian farmers want reassurance that U.S. domestic support programs will respect the commitments to be agreed upon in the Doha round.  In addition to increased domestic support, the U.S. farm bill includes mandatory country-of-origin labeling for livestock products, which will act as a non-tariff barrier for any livestock products destined to the US market.