LETTER FROM ONTARIO
Leveling the international playing field for some Canadians
Letter from Ontario reviews Minister of Ag Andy Mitchell's paper on changes in world trade

Farm & Countryside Commentary by Elbert van Donkersgoed

January 19, 2005: Andy Mitchell, our federal Minister of Agriculture and Agri-Food sent me a nicely done booklet in the regular mail the other day. It was a short but thorough update on the status of the World Trade Organization agricultural negotiations. He titled his document: “Leveling the International Playing Field for Canadians.” In it he describes the framework on agriculture agreed to by WTO members last July, as a milestone in the agricultural negotiations.

Any future agreement that prompts the Europeans to agree to the total elimination of export subsidies and convinces the Americans to consent to a substantial cut in domestic subsidies that distort trade, will bring a sigh of relief to many Canadian farmers who have been battling foreign government budgets for decades to build export opportunities. For other Canadian farmers there is a hitch. The framework is not limited to new disciplines for domestic support and export competition. Those same trading partners, the Americans and Europeans, are demanding that we agree to new disciplines for the Canadian Wheat Board to guarantee that it is a fair-trader. Just about every government at the table wants better access to Canadian markets. As a result Canada will face strong pressure in the next stages of the talks to cut tariffs – cuts that could undermine the right of farmers to choose orderly marketing as the best way to produce for the domestic market.

Minister Mitchell should note several other trade milestones.

A bit more than five years ago, Canada’s agri-food exports reached a milestone and turned a corner. Canadian exporters sold as much value-added consumer-oriented food products around the world as they sold bulk, undifferentiated commodities. Since then, the export sale of bulk commodities has been in decline, while value-added sales have roared ahead. In 2003, about 55% of all Canadian agri-food exports were consumer-oriented, compared to just 30% in 1991. Canadian players in the trade negotiations are representatives of value-added agriculture.

Our American neighbors are forecasted to reach a new milestone in 2005. Their agri-food imports are climbing to match their exports. Just 5 years ago the Americans had a $12 billion surplus in agri-food trade. Their imports have multiplied since the turn of the century from thirty-nine to a forecasted fifty-six billion dollars. Their exports have plodded from fifty-one to a forecasted fifty-six billion dollars. U.S. negotiators will be coming to the next trade talks as net importers.

While Minister Mitchell may be right to describe last July’s framework agreement as a milestone in Canada’s relationship with our trading partners, it is not the only milestone that will shape a future trade deal.

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Minister Mitchell’s booklet on the status of the World Trade Organization agricultural negotiations can be found at: www.agr.gc.ca/itpd-dpci/english/consultations/infodocIII.htm.

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