March 12, 2012 / 3:33 PM / 5 years ago

Canada to defend its farmers in Pacific talks

4 Min Read

NEW YORK (Reuters) - Canada will defend a tariff structure that supports its farmers as the country pushes for entry into a pan-Pacific trade pact, Canada's trade minister said on Monday.

Still, Trade Minister Ed Fast said in an interview on Monday Canada is ready to discuss all topics on the negotiating table as it faces pressure to open its farming industry in talks about joining the pact.

Fast said his country has the support of most of the countries involved in negotiating a Trans-Pacific Partnership (TPP) trade deal. The proposed trade pact currently includes the United States, Australia and seven others.

News reports have suggested Australia and New Zealand are unhappy about Canada's supply management system, which protects its agricultural sector by setting producer quotas and prices on farm commodities such as milk and poultry, and putting stiff tariffs on imports.

"We have said very clearly we are prepared to discuss all matters on the negotiating table, but we also have made it very clear to our industry that we will continue to defend Canada's system of supply management," said Fast.

"We've made it very clear to our farmers we will aggressively defend their interests in the negotiations," Fast later added.

Fast, in New York to make the case for Canada's inclusion, said Canada would be an ally for the United States at the negotiating table.

"I think there's a general understanding that Canada needs to be at the table because of how much we have in common," Fast said.

The United States and Canada are the world's biggest goods trading partners. According to official U.S. data, two-way trade in 2010 totaled $525 billion.

Fast could not say exactly how many countries supported Canada's entry to the pact. He said his meetings in the United States have been "very, very positive".

Fast said he did not know of a timeline for a final deal at this point. Canada announced its interest in joining late last year. Japan and Mexico have also said they want to be in the pact.

Opportunities Beckoning

Talks on a separate trade agreement between Canada and the European Union are down to the "final few" issues, Fast said, adding that he is still aiming to bring the discussions to an end sometime this year.

"We're making good progress," said Fast.

A trade pact between the two regions would be the biggest for Canada since it signed the landmark North American Free Trade Agreement with the United States and Mexico in 1994. Ottawa says a treaty with Europe would increase two-way trade by 20 percent.

Officials said last October they needed to settle disagreements on issues such as investment protection, intellectual property, access for agricultural goods, and opening up local and national procurement markets.

As for Canada's relationship with the United States, Fast said it would be a mistake to assume trade with Canada's southern neighbor will taper off as it looks for other places to send its goods, such as oil.

"The United States always has been and always will be Canada's largest trading partner," said Fast.

Canada is the largest single exporter of energy to the United States.

"My goal is to increase the amount of trade we do between Canada and the United States," said Fast. "But there are opportunities in the rest of the world that are beckoning as well, and Canada really needs to take notice of that and take concrete steps to take advantage of those opportunities."

To the Canadian government's disappointment, U.S. President Obama rejected the proposed $7 billion Keystone XL oil pipeline earlier in the year, pending further environmental review.

Fast said he is confident that if the pipeline is evaluated on its merits, it will be approved.

The pipeline would ferry crude from the Canadian oil sands to Texas refineries. The Canadian government says it will now focus on selling oil to Asian markets.

Reporting By Leah Schnurr; Editing by Andrew Hay

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