April 07, 1999

Over the next few months, the consultation process to develop Canada's position for the next round of WTO agriculture negotiations will be completed. The process that began last fall with the Standing Committee on Agriculture's Take Note Hearings, continues and will conclude this summer when Federal/Provincial Agriculture Ministers meet in July to finalize Canada's opening position.

The Foreign Affairs and International Trade Standing Committee is currently conducting hearings to seek input from Canadians on the upcoming WTO negotiations. A review of recent testimony before that Committee reveals a number of areas where agriculture and food groups agree on what the Canadian position should be, and a number of other more contentious issues.

Highlighted below are areas of emerging consensus and ongoing differences based on testimony from both export and domestic oriented groups*.

Export Market Access:

  • There is general support for the goal of improving export market opportunities and fair, effective and binding trade rules

  • Export oriented groups argue for the "maximum possible increases" in minimum access and "maximum reductions" in over quota tariffs

  • Those more "import sensitive" favour more modest goals to achieve "clean" commitments that are "reciprocal and fair", citing goals of 5% minimum access and the maintenance of over quota tariffs

  • All groups have indicated general support for "product-specific" commitments to correct the problems of aggregation of tariff lines and the disparity of access between primary and processed forms of products

  • There is general support for elimination of in-quota duties where countries maintain protection through a tariff rate quota; there has been little discussion of normal agricultural tariffs where there is no TRQ

Export Subsidies:

  • There is strong support for the elimination of export subsidies

  • Domestic oriented groups want assurances that the definition of export subsidies isn't broadened to "undermine the effectiveness of Canadian agricultural marketing bodies"

Domestic Support:

  • Export oriented groups seek "significant reductions in domestic agricultural support levels that distort production or influence trade"

  • Those with a more domestic focus suggest improving the clarity and equity of definitions and rules and are seeking a "cap on total domestic support"

* Based on March 11, 199 testimony from: Canadian Federation of Agriculture, Dairy Farmers of Canada, Union des producteurs agricoles du Québec, the Canadian Alliance of Agri-Food Exporters and William Miner of the Centre for Trade Policy and Law.

The impact of "aggregation" on the Canadian sugar industry

With aggregated minimum access commitments, the US was able to defend its sugar import quotas in the context of the 3-5% Uruguay Round guideline. The US sugar industry continues to argue that total US sugar is above this guideline. Aggregation enabled the US to maintain current access for raw sugar suppliers (Canada does not produce raw sugar) but significantly reduced access for refined sugar. Canada's historical refined sugar exports were substantially reduced and total global WTO access (including Canada) now represents less than 0.25% of US consumption. The U.S. imposition of new restrictions on sugar containing products is also illustrative of one of the "unique ways" that many countries were able to impede market access in the absence of firm rules and product-specific minimum access commitments.

Canadian Federation of Agriculture Trade Policy Statement Highlights on Sugar

In the area of market access, the CFA recommends that: "Canada should pursue maximum market access opportunities for Canadian agricultural exports. The sectors with strong export interests include: grains, oilseeds, pulses, red meat, sugar, sugar containing products and horticulture products."

The CFA also supports maintaining "all current access above the minimum access level" but notes that the "access provided by the US for Canadian refined sugar is well below historic access levels."