November 10, 2005

With a crucial WTO Ministerial meeting in Hong Kong only weeks away, negotiations have intensified as members seek to reach a consensus in agriculture. Canadian Sugar Institute President Sandra Marsden will be in Hong Kong to support Canadian negotiators’ efforts to secure an ambitious outcome to the Doha Round.

Canada needs to push for the most ambitious outcome possible in these negotiations. With 40% of GDP and one in three jobs dependent on exports, Canada is the most trade-dependent country in the OECD. In addition, over 90% of Canada’s farmers rely on international markets. An ambitious outcome at the WTO will benefit all sectors of the Canadian economy, including agriculture.

Canada’s agri-food sector needs increased market access and a reduction in international trade distortions in order to realize the full benefits of international trade. The sugar industry is an example of a Canadian industry that stands to benefit from liberalized international trade in agriculture. The world sugar market is one of the most distorted commodity markets. Producers such as those in the US and EU benefit from subsidies in the form of generous price supports, long recognized as one of the most trade distorting forms of support, as well has high tariff protection to keep out international competition. In contrast, efficient Canadian producers derive their returns from the Canadian market, based on world prices, but are shut out of major export markets by restrictive trade barriers. With a reduction in trade distorting support and an increase in market access, Canadian producers will be able to compete on a more even footing and will benefit from increased market opportunities. The same holds true for all of Canada’s trade dependent agriculture sectors.

In order to fully benefit from a WTO agreement, Canada’s agri-food sector needs a result in this round of negotiations that eliminates export subsidies, significantly reduces trade distorting domestic support and substantially increases market access for all agriculture and food products through a combination of tariff reduction and quota expansion.