Trade Policy Statement

2.0 Export Subsidies

Canada is eliminating all export subsidies. Further action is required to ensure that Canadian producers are not forced to compete in an international market that is distorted by export subsidies provided by others. Canadian goals should include:

• Eliminating the use of export subsidies.

   

• Establishing effective WTO rules governing the use of government export credit programs. These rules should :
  • Limit the repayment period of a loan to period approximating the life of the product being sold2

     

  • Prohibit the subsidization of interest rates,

     

  • Require premiums (reflecting cost of risk involved) for credit guarantees and insurance,

     

  • Allow governments to provide direct credit as well as guarantees and insurance, and

     

  • Provide that state trading enterprises are subject to the same non-subsidization rules as government, but are allowed to exceed the repayment limits when necessary to match the repayment periods being offered by the private trade.

     

• Establishing clear and enforceable WTO rules to govern the use of export promotion programs and food aid to ensure that these programs are not disguised export subsidies.

   

• Ensuring that the definitions of export subsidies do not undermine the effectiveness of Canadian agricultural marketing bodies or Canadian exporters.

2. In general 180 days is a reasonable maximum repayment period. A longer repayment period is probably required for breeding animals and plant reproductive materials. One to three years, based on the length of the reproductive cycle, should be an adequate maximum for breeding animals and reproductive materials.

3.0 Export Restrictions

The use of quantitative export restrictions and/or export taxes can in effect subsidize the export of processed products and can undermine the confidence of importing countries, in the security of imported food supplies. Canadian negotiating goals should include:

• Establishing effective WTO rules governing the use of quantitative export restrictions and export taxes. These rules should :
  • Clearly define the circumstances when quantitative export restrictions or prohibitions are allowed, and the allowed duration of such a measure.

     

  • Require that a restriction or prohibition shall not reduce the proportion of exports, to the domestic supply of the product, to a level below the average proportion of exports to the domestic supply in a recent representative period.

     

  • Prohibit the use of export taxes to isolate domestic prices from increases in international prices.

4.0 Market Access

CFA believes the fundamental market access goal should be to achieve the maximum possible access for agricultural exports, with due regard for the need to maintain our domestic interests and orderly marketing structures. (see Annex 3)

• Canada should pursue full equivalency of minimum access levels based on clear and precise rules.

   

• Canada should continuously pursue maximum market access opportunities for Canadian agricultural sectors with strong export interests

   

• As a first priority, the Uruguay Round goal of 5 per cent minimum access must be provided for all agricultural products for which non-tariff barriers were converted into tariff equivalents

   

• Agriculture sectors which already offer access greater than the common minimum access agreed upon at WTO should not be required to offer additional access.

   

• Minimum access commitments should be established on the basis of:
  1. Tariff Rate Quotas (TRQs) being established on a product group basis such as pork, beef, dairy, wheat, barley and oilseeds, and be available to all products within each product group. The product groups, for which separate minimum access calculations and provisions are required, should be defined in a specific list.

      

  2. Over-quota tariffs being maintained at a level that ensures no more access than the intended level of the TRQ.

      

  3. In-quota tariffs being reduced to zero.

      

  4. Transparent, effective and binding rules governing TRQ administration in order to ensure that the committed level of minimum access is available and achievable, including:

      

  5. the elimination of country-specific allocations; and

      

  6. The right for Canada to designate the market sectors that receive imports, provided it does not impede the level of committed minimum access, and provided the TRQ administration is transparent and non-discriminatory within the sector.

      

  7. TRQ administration in support of the objective of equivalent and achievable market access should be guided by the following principles:
     1. Administration measures must be fully transparent and predictable to importers and exporters, and be applied equally to all WTO Members;

         

     2. Administrative burdens on importers and exporters should be minimized; and

         

     3. State Trading Enterprises (STEs) must be recognized as legitimate structures of administering TRQs, provided that they are in compliance with WTO commitments.

         

• In principle, all current access above the minimum access level must be maintained. However there is a bilateral (Canada/US) anomaly that must be resolved. The current access provided by Canada for hatching eggs and chicks exceeds the base period access volume, while the access provided by the US for Canadian refined sugar is well below historic access levels.
   
• Notwithstanding the above position on in-quota and over-quota tariffs, Canada should pursue the maximum reduction of all other tariffs.3

   

• For grains, oilseeds, pork and their products:
  • Canada should seek parity of access/tariffs for competing products. For example, canola should enjoy access/tariffs equivalent to that of soybeans.

     

  •  The practise of “tariff escalation” where progressively higher tariffs are applied as the product moves farther up the processing chain, should be prohibited. Primary and processed forms of a product should enjoy parity of tariff treatment.
     
• Canada should continue to pursue “0' for “0' agreements for products of interest to specific Canadian sector
• Both developed and developing countries should have access to special agricultural safeguard measures.
       - These measures should continue to include both price
         and volume based safeguards
       - These safeguards should be applicable to over-quota lines
          for sensitive products.
   

3 An illustration of the application of CFA market access policy to the single tariff concept in the Canadian Government’s agricultural negotiating mandate is provided in Annex 2.

5.0 Non-Tariff Barriers

5.1 Sabitary and Phyto-sanitary

Canada must recognize that for some sectors, the elimination of sanitary, phyto-sanitary and other barriers without technical merit require as much priority as the further elimination of tariffs.

In general, the SPS Agreement is working well and does not need to be renegotiated. However, if it is opened up, Canada should seek to achieve:

• WTO provisions that require countries to accept international pesticide registration and residue standards.

   

• Clearer language on equivalency that will make it more incumbent on countries to allow imports where the food safety protection afforded by exporting countries’ inspection programs is at least equivalent to that of the importer, even if the modus operandi is different in certain respects.

   

• Provisions that would ensure timely resolution of problems with unjustified sanitary and phytosanitary measures.

  In addition, priority should be given to:

  • Measures which will ensure that science is the basis on which countries assess the acceptability of GMO products and that labelling requirements not constitute a non-tariff barrier to trade.

     

  • Achieving a WTO Agreement on Arbitration and Licensing that will ensure that shippers of fresh fruits and vegetables will have access to an effective and comparable dispute resolution system in all markets.

     

  • Measures which will help ensure that import regulations and other trade restrictions are administered and enforced uniformly for all exporters shipping into a country.

Recognizing that an increasing number of agricultural products, developed through biotechnology, are commercialized and enter into international trade, Canada shall seek to establish a working party on biotechnology in the WTO to assess potential trade implications and to determine the adequacy of existing rules and to report to the steering body for the negotiations on whether negotiations are required within the WTO in this area.

In negotiations regarding technical regulations, Canada must recognize the importance of maintaining its bulk container and consignment selling rules which are consistent with WTO national treatment requirements.

6.0 Labelling Standards

Proper labelling standards help ensure that consumers are provided with sound, factual information about the product they are purchasing. Labelling requirements can be used to promote domestic agendas and create technical barriers to trade. WTO Technical Barrier to Trade rules and Codex standards must ensure that:

• Mandatory labelling requirements are limited to clear and factual information of importance to the consumer and do not create costly and/or complex record-keeping or verification, requirements for producers, processors and exporters.  
• Labelling regulations do not impose product description requirements that discriminate again imported product.
• In the case of processed products, there are no mandatory requirements for the declaration of the origin of ingredients, or provisions for identifying the location of earlier stages of production or processing of components of the final product.
• There are no mandatory requirements for the declaration of the country of origin of primary agricultural products.
• Standards for the identification of products with particular characteristics, that some consumers may desire (e.g. organic product or BST free milk), are not mandatory, and the identification is limited to declaration of the presence of the characteristic.