Government digs in heels in WTO agriculture talks

Thu May 29, 2008 12:40pm EDT
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By Louise Egan

OTTAWA (Reuters) - Canada is digging in its heels against a WTO proposal on agriculture that it says would ruin a decades-old marketing scheme that has helped its dairy and poultry farmers survive foreign competition.

Producers and processors in Canada's dairy and poultry sector have vowed to defend the "supply management" regime that controls production and prices, and limits imports with high tariffs to ensures stable incomes.

But trade experts say such protected industries will inevitably be forced to end their isolation and expose themselves to global competition. The result will be a liberalized version of supply management and the industries will survive, they say.

In the Doha Round of talks at the World Trade Organization, mediators issued revised proposals earlier this month that would force Canada to open up poultry and dairy markets to more imports.

That would spell death for an industry that generates C$42 billion ($42 billion) in activity and provides 250,000 jobs, industry leaders say.

"If those proposals were all accepted we would not be able to run an effective supply management system in Canada," said David Fuller, chairman of Chicken Farmers of Canada.

"It is a program that has not put surpluses on the world market ... What we're trying to provide is an opportunity for Canadian jobs, for stability," he said.

But securing a captive Canadian market is seen as crucial to only a small segment of farmers, and Canadian agriculture exporters see considerable gains from the WTO proposal as it now stands.   Continued...

<p>Liberal leader Jean Charest inspects an egg as his wife Michelle Dionne (R) watches at an egg farm in Saint-Hyacinthe, Quebec, February 24, 2007. REUTERS/Christinne Muschi</p>