Supply management has no place in the TPP

It would be mad­ness for Aus­tralia to agree to admit Cana­da to the TPP “free trade” nego­ti­a­tions on the basis that they might keep their astro­nom­i­cal­ly high bar­ri­ers to some food imports. 

The Cana­di­an Trade Min­is­ter, Ed Fast, told reporters this week that he believes Cana­da has “pub­lic sup­port” from six of the nine coun­tries nego­ti­at­ing the Trans-Pacif­ic Part­ner­ship to admit Cana­da to the group despite it’s inten­tion to retain sup­ply man­age­ment pro­tec­tion for Cana­di­an farm prices (main­ly in dairy, horticulture).

The “pub­lic” Aus­tralian posi­tion is of sup­port for Canada’s “inter­est” in join­ing the TPP but no deci­sion on whether, or on what terms, Cana­da should have a seat at the table.

Cana­da is a sub­stan­tial trad­ing econ­o­my — one-and-a-half times the size of the Aus­tralian econ­o­my — and a strong com­peti­tor in trans-Pacif­ic mar­kets. Its mem­ber­ship of the TPP could give a big boost to the cred­i­bil­i­ty of this “new fron­tier” agree­ment adding to its trade cov­er­age and per­haps attract­ing oth­er region­al coun­tries to par­tic­i­pate despite the ambi­tious thresh­old com­mit­ment to bar­ri­er-free trade. Canada’s par­tic­i­pa­tion also has a strong com­mer­cial log­ic, giv­en the close inte­gra­tion of the USA and Cana­di­an markets.

But, thanks to the entrench­ment of old-fash­ioned, mar­ket-rig­ging, sup­ply con­trols (mar­ket­ing quo­tas) for a small num­ber of farm prod­ucts from the East­ern provinces, the Cana­di­an trade land­scape is marred by some of the high­est peaks of import pro­tec­tion to be found in any devel­oped or devel­op­ing coun­try. Their claims for mem­ber­ship in an agree­ment intend­ed to estab­lish free-trade across the Pacif­ic while hold­ing these “sacred cows” in reserve is absurd.

Worse, it would sig­nal to Japan — also an aspi­rant for TPP mem­ber­ship — that they need not be too con­cerned about remov­ing their farm pro­tec­tion when nego­ti­at­ing to join the TPP.

We have yet to see whether the “free trade” deal to be struck among TPP par­tic­i­pants will over­turn some oth­er his­tor­i­cal pro­tec­tion­ist anom­alies such as the bar­ri­ers to US sug­ar imports. But that uncer­tain­ty would only be com­pound­ed by giv­ing Cana­da a seat at the table on the basis Mr Fast proposes.

There is, how­ev­er, a dan­ger that pro­tec­tion­ist ele­ments in the US Con­gress would wel­come Cana­di­an entry with high dairy pro­tec­tion as a stalk­ing horse (or is that a “tro­jan horse”) for US farm pro­tec­tion. If the USA decid­ed it want­ed to admit Cana­da to the nego­ti­a­tions even with sup­ply-man­age­ment, Aus­tralia and New Zealand would find it dif­fi­cult to resist the pressure.

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