March 14, 2007

Canada to reconsider tariffs on dairy, egg and poultry
 

Canadian Agriculture Minister Chuck Strahl came as close as he's ever come recently to saying the government is looking at cuts to over-quota tariffs and expanded tariff rate quotas (TRQs) on dairy, egg and poultry products as part of a possible World Trade Organization (WTO) deal.

Strahl and trade minister David Emerson testified February 27 before the Commons' Agriculture Committee on how the government plans to treat the $39 billion (Canadian) supply managed industries in what could be the closing months of the WTO's Doha Round.

Dairy and poultry groups that operate under supply management want their products classified as "sensitive," and over-quota tariffs kept at current uncapped levels. Improved access would be accomplished through better administration of TRQs which the group accepts within-quota tariffs if it falls to zero. 

Strahl said no one in the WTO talks supports these demands. The minister testified that "it is important to recognise that all other members of WTO are willing to accept at least a degree of over-quota tariff cuts and tariff quota expansion. We have no allies for this position."

Emerson said the government may need to re-think its support for sensitive industries like dairy and poultry.

Strahl said the country's negotiating position in Switzerland remains aggressive in defence of supply management but Canada is also committed to WTO as it the cornerstone of the world's trade policy.

Dairy Farmers of Canada president Jacques Laforge said his industry is willing to slash under-quota tariffs to zero, a move that might be difficult for European and American industries to replicate. Canada has already given a larger share of its domestic dairy market to imports than either the US or European Union, he added.

Opposition agriculture critic Wayne Easter said if there is to be a trade-off it needs to come on quotas and not tariffs. Without existing over-quota tariffs, it will be difficult for the domestic industry to manage supply, he adds.