Supply-management won’t kill TPP deal, Fast says

Prize too big to allow failure: minister

• Canada must seize the once-in-a-generation opportunity to join the TransPacific Partnership trade pact and can’t let its protected dairy and poultry sectors stand in the way, Trade Minister Ed Fast says.

Fast said Canada faces pressure to make changes to the regime of quotas and tariffs known as supply-management, which protects five industries: dairy, eggs, chicken, turkey and hatching eggs. However officials are seeking a balance in negotiations that will deliver benefits across every region and industry, the minister told Bloomberg News on Thursday in an editorial board interview in Toronto.

“I am confident that at the end of the day Canada will be part of the TPP,” Fast said. “We have some market access issues left to resolve. They’re always the toughest ones that remain to the end.”

Fast will join other negotiators and ministers in Hawaii later this month as TPP talks reach the final stage. The 12 countries involved are entering “the end-game in these negotiations,” he said.

Talks accelerated after U.S. President Barack Obama won fast-track authority to negotiate the deal, putting the Conservative government in an unsavoury position: Partly or wholly dismantling supply- management would anger voters in protected sectors ahead of the Oct. 19 election.

“We have said to the supplymanaged industry we will continue to promote and defend their interests whenever we negotiate trade agreements, but I think they also understand we have to find a balance that allows the rest of the economy to participate within the global marketplace,” Fast said. “All issues are open for discussion in negotiations.”

In previous trade deals the government has reached, “accommodations” were struck that got a trade pact done while largely preserving supply management, Fast said. He wouldn’t say what accommodations would be considered to secure a TPP deal, only that the prize is too big to turn down.

“This is really a once-ina-generation opportunity for Canada,” Fast said. “We believe the benefits of being part of the TPP are substantial enough that we should continue to be at the table.”

While supply-managed sectors are “important” in Canada, “so are all the other agricultural commodities that are looking for new export opportunities around the world.”

Representatives of the five supply-managed sectors have expressed support for the government’s approach to the talks while defending the status quo.

“We’re confident the Canadian government will stick to its commitment and continue to defend supply management,” Yves Leduc, director of international trade for the Dairy Farmers of Canada, said in a July 7 interview. “At the same time, the pressure is there. We’re not putting our head in the sand.”

Canada’s current system is “significantly contributing to the Canadian economy” without direct government subsidies as seen in the U.S., Leduc said, subsidies that could remain in place if a TPP deal is reached and support U.S. producers in undercutting Canadian competitors.

“How can you ask Canada to open its markets to highly subsidized goods when these subsidies are not going to be curtailed?” Leduc said.

In a statement this week, the Egg Farmers of Canada said they are “following the negotiations and are pleased the Canadian government continues to publicly state its support for supply-manage- ment.” The system allows the industry to “provide stability at home while agricultural industries with greater export potential pursue opportunities in international markets,” the statement said.

In the interview Thursday, Fast stressed the magnitude of the TPP trade deal but said Canada is not the only country with “defensive interests” in certain sectors. “I’d also remind our American cousins that they themselves have very significant defensive interests within their economy, which they aggressively and consistently defend,” Fast said, citing dairy and sugar.

He said supply-management was a decision “made well before my time, many, many decades ago” and “very heavy investments” have since been made in agriculture.

“It is one of those areas, one of the very, very few areas, that Canada actually has defensive interests when it comes to trade,” he said.