Alex Binkley on TPP

Alex Binkley is a foremost political and economic analyst, whose website is Readers will be aware that his columns in True North Perspective have foreseen political and economic developments in Canada. This week in ...

The Binkley Report

TPP talks divide farm community

By Alex Binkley
True North Perspective

High level negotiations on the Trans-Pacific Partnership (TPP) scheduled for Guam this month have opened a rift in Canada’s farm community that successive governments have tried to prevent.

Livestock and grain groups have gone public with a demand that the federal government fully engage in the talks and while they don’t actually say it, Ottawa must essentially be prepared to abandon the supply management sector to win membership in the TPP.

“As a country we need to be fully engaged in the negotiations to ensure that Canadian exporters attain the same access to markets as exporters from other TPP countries,” says a letter to the Harper government issued by the Canadian Agri-Food Trade Alliance and many of its members including the Canadian Meat Council, the Canadian Pork Council, the Canadian Cattlemen’s Association, and Cereals Canada.

It contended that a deal was close. “The importance of the deal for Canada – and Canada’s agri-food exporters in particular – should not be underestimated.”

Meanwhile the dairy and poultry supply management boards have sent a letter to Prime Minister Harper noting that since 1994, Canada has signed free trade agreements covering 43 countries that “have expanded access for Canadian exports, improved trade rules and maintained supply management.” On per capita basis, Canada allows far greater dairy and poultry imports “than many other countries, including the United States.”

In a recent session with the Commons agriculture committee, Agriculture Ron Bonnett, President of the Canadian Federation of Agriculture, says Canada has to be remain involved in the TPP talks, but it also needs to “stand back to see what unfolds in the United States. If Congress doesn’t give fast-track authority to the U.S. negotiators, then Canada needs to be cautious in what it agrees to.”

Offering up supply management to get a deal would be a nightmare, he added. Canada would be better off continuing to negotiate bilateral deals.

 “We have to be in the talks but we don’t have to act like boy scouts.” Agriculture Minister Gerry Ritz restated the government’s position to the Commons agriculture committee. “We have proven the value and validity of supply management as we continue to exercise free trade agreements around the world.” The dairy and poultry boards “all know that as a government, we have their best interests at heart.”

Like the other federal parties, the Conservatives have regularly endorsed supply management, he notes. “We as a government take that very seriously in the negotiations. … We look at it in a holistic way, but at the same time with the eye on supply management to keep it as workable as we absolutely can.”

Veteran trade observer Peter Clark says American officials make menacing utterings about Canadian supply management while remaining fully protectionist about their own farm support programs. Japan has clearly said it’s unwilling to trade away its protected beef sector for a TPP deal.

“Canada isn’t moving from its usual position because the U.S. only wants access from us and is not prepared to pay for it.” He questioned why the commodity groups would expect the government to sacrifice supply management with a federal election coming in October. “And without elimination of Buy American and approval of the Keystone pipeline.”

Former Liberal agriculture minister Lyle Vanclief crafted the so-called balance trade position of expanding markets for exporters while supporting supply management 20 years ago. It has been by Ottawa ever since.

In a recent telephone news conference with reporters, Ritz added that the biggest stumbling block to a TPP deal is the refusal of the U.S. Congress to grant fast track bargaining authority to the Obama administration that would keep House of Representatives and Congress from tinkering with a deal after the administration agrees to it.

“So everyone is withholding the final negotiations, the final steps that are required until the Americans actually have the ability to consummate the deal,” he said. “We’re negotiating in good faith. We’ll certainly be there right to the bitter end, but we expect the Americans to do their part and actually be able to consummate this deal.”

The U.S. legislation to authorize a TPP deal contains “a lot of off ramps there that are brand new that concern major players like Japan and Canada,” he noted. “It’s not like this the traditional route of fast track where it’s a yes is a yes and there’s no more renegotiating. In this case we see a number of different situations where certain Congressmen or Senators could actually say well, it’s not in the best interests of my folks at home, so we want this. So you can’t renegotiate after it’s already been negotiated.”

The commodity groups says TPP represents a “once in a generation opportunity. We owe our farmers, ranchers, producers and exporters the chance to freely compete and grow markets, on an equal footing, with our international competitors. There is no more time for waiting, and no such thing as the status quo.”

They pointed out that Canada exports “$50 billion a year in agricultural and agri-food products – over half of everything we produce. It means that over 90% of Canada’s farmers are dependent on exports as well about 40% of our food processing sector.”

A TPP deal “will preserve and maintain our place in an integrated North American economy, and boost access to the rapidly growing Asian-Pacific economies such as Vietnam, Malaysia and Singapore,” the groups add. They note that the deal will be vital to ongoing access to Japan “a premium market that demands $4 billion per year in Canadian agri-food products – about 10% of Canada’s total agri-food exports.”

Clark points out that Canada and Japan are well advanced in their own free trade deal negotiation on top of the one Canada has already reached with South Korea.

The supply-managed groups said, “The level of pressure from our trading partners is increasing. The level of anxiety among our farmers and industry partners is also intensifying.”

“Supply management helps provide stability not only to the agricultural sector but also the Canadian economy as a whole. Quality milk, eggs, broiler hatching eggs, chicken and turkey are produced on family farms and flow through our respective value chains across the country. Our farms support everything from feedmills, equipment dealers and vets to banks, restaurants and tourism.”