Supply Management Survives as Trans-Pacific Partnership Concluded

GLOBAL - Canadian poultry meat, egg and dairy producers will be breathing a sigh of relief today after it was announced that their supply management system will mostly be protected in the Trans-Pacific Partnership free trade deal.
calendar icon 6 October 2015
clock icon 3 minute read

Trade ministers of twelve countries around the Pacific announced on Monday that they had finally come to an agreement on the landmark deal, after five years of negotiations.

The agreement liberalises trade and investment between the twelve countries, which make up nearly 40 per cent of the world economy. 

The text of the agreement is not yet available, whilst negotiators complete the finishing touches such as translations and legal consultations. Reports suggest that this could take around one month.

However, a summary of the agreement says: "On agricultural products, the Parties will eliminate or reduce tariffs and other restrictive policies, which will increase agricultural trade in the region, and enhance food security."

Despite this, a statement from the Canadian trade department said: "The government successfully protected the three pillars of Canada’s supply management system, which will remain intact."

The supply management system limits imports of poultry meat, eggs and dairy products into Canada as well as limiting domestic production, and had been seen as a key barrier to the agreement's conclusion.

Canada allows limited market access

It appears that Canada did have to make some concessions, as Dairy Farmers of Canada announced that the agreement did include some market access for dairy products from TPP countries, which the organisation projected at 3.25 per cent of Canada’s 2016 milk production. Measures have been put in place by the Canadian government to ensure farmers' incomes are protected.

“We obviously would have preferred that no additional market access be conceded in the dairy sector,” said DFC President, Wally Smith.

“However, we recognise that our government fought hard against other countries’ demands, and have lessened the burden by announcing mitigation measures and what seems to be a fair compensation package, to minimise the impact on Canadian dairy farmers and make up for cutting growth in the domestic market.

"We have come a long way from the threat of eliminating supply management. The government has clearly understood the importance of supply managed dairy farms in rural Canada and the economic activities they generate.”

The Dairy Companies Association of New Zealand (DCANZ) expressed disappointment that the dairy market had not become more open, but recognised the efforts of New Zealand's negotiators in securing the deal.

"It was always going to be very hard given the starting point for dairy as one of the most protected sectors globally," said DCANZ Chairman Malcolm Bailey.

"While further market opening is needed to help address price volatility in the global dairy market, the deal does contain some useful improvements."

Lack of currency manipulation rules questioned

Meanwhile, the American National Farmers Union (NFU) expressed its disappointment in the lack of limits placed on currency manipulation. The organisation has previously said that trade partners can reduce currency values, decreasing the relative cost of their exports to other countries in trade deals, and undermining trade agreements.

“Just as we feared, the Trans-Pacific Partnership (TPP) is moving forward without any meaningful language addressing one of the chief tools used by our trade competitors to ensure the playing field is never fair: currency manipulation," said NFU President Roger Johnson.

“Because of this, NFU will continue to vigorously oppose this agreement and urge Congress to reject this deal as well. Gains that may have been made in the agreement to ensure fairness and equity in trade for America’s family farmers and ranchers are likely to be lost due to currency manipulation."

Alice Mitchell

Alice Mitchell
News Team - Editor


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