Put multiple modes of action to work all season long | VIOS G3
Making the Best of It
September 2005
In a recent press release sent to 56 newspapers and reprinted by two small-town weeklies, my good friend Roméo called me a hypocrite and a weasel. He was expressing his disagreement with an opinion I stated about the pig issue. Do you honestly think I lost any sleep over this? Not in the least. I, too, dream of a secluded retirement, where, with slippered feet and fly swatter in hand, I could reinvent the world. So, my friend, let bygones be bygones…

This said, I have a keen desire to talk about the WTO. As you probably know, things aren’t moving real quick in Geneva – negotiations are presently at a standstill – the notion of impending failure this fall will force the players back to the bargaining table. And, once again, agriculture (and supply management) will be central to all the turmoil.

Let’s use milk as an example to illustrate my point of view, although the same reasoning could be applied to poultry or to eggs. It’s like this. Next December, once the current round of negotiations are over, three scenarios will be possible. The first and best is that tariffs would be increased. Why is this one the best? Because increased protection would also allow for an increase in milk prices following the flow of production costs. However, no one really believes in this option. It isn’t part of negotiator’s agenda. Don’t forget: The WTO never turns back. It moves forward and onward, step by step, no matter how small each step may be, it advances towards greater trade liberalization.

The second scenario, more plausible, ends with the inability to conclude an agreement in Hong Kong. Total failure. Good news? Of course, because tariffs wouldn’t be lowered. There might still be a little problem. Even with stable tariffs, foreign products could end up crossing the borders if one of the three following conditions were to occur: If the Canadian dollar continued to appreciate (foreign goods would become less expensive), if the international price of dairy products would suddenly fall (it is currently at $40/hl due to a drought in New Zealand, but, as we all know, this is temporary) and finally, if the price of our own products continued to rise (rendering us less competitive to foreign products).

In this scenario, if we want to avoid being overrun, we essentially need to temper our ambitions regarding price increases. It’s not that bad in the short term – there is still some room to manoeuvre – but in the long term, it will just get worse. And that’s too bad.

The third scenario is harsher. As I write this article, there’s no way to know if an agreement will be concluded in December. But what we do know is that a “last minute” compromise won’t protect us from lower tariffs or milk quota cutbacks giving the advantage to foreign imports. Although it wouldn’t be dramatic – nothing is ever decisive with the WTO – a cutback in quotas combined with lower tariffs would make our system much less generous. Consider the trend over the next 5 to 10 years.

This is where Canada must negotiate powerfully and fight boldly. Because the goal is not so much to “save” supply management – which I’m sure we can do – but to avoid the slow erosion of its ability to compensate farmers. Canada can do this. And it has done so brilliantly for cultural products when it negotiated the exception clause with the WTO. The only things setting apart culture and agriculture are four little letters.

Thus the importance of supporting the GO5 group’s efforts to pressure our politicians and negotiators, and who, next fall, will work to raise the population’s awareness of supply management. This is in fact a great endeavour. A huge meeting is planned for Montreal at the end of October with the support of hundreds of interveners. And I will be one of them. I’ll be looking forward to seeing you there.
 

Claude Lafleur, agr.
Chief executive officer
La Coop fédérée
Email: claude.lafleur@lacoop.coop
Fax: (514) 383-7027
 



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