WASHINGTON – During the recent G20 summit, a decision was made to include Canada in the Trans-Pacific Partnership (TPP). As a result, the United States, New Zealand and Australia trade officials are reportedly not happy. Canada’s open agricultural subsidy schemes related to TPP -- and programs for Canadian pork production are particularly worrisome to the three countries, stated the National Pork Producers Council.
TPP countries, which include the US, Australia, New Zealand, Brunei Darussalam, Chile, Malaysia, Peru, Singapore and Vietnam – also voted to welcome Mexico in the TPP. Combined, all nine economies have a gross domestic product of approximately $17 trillion, a GDP per capita of $33,546 and a population of 505.8 million people.
Adding Canada and Mexico now elevates the 11-member TPP group to nearly 30 percent of global GDP, a substantially larger trading power than the 27-nation European Union bloc.
Although trading power is one element, NPPC explains the TPP goes further than a traditional trade agreement and deals with behind-the-border impediments to trade and investment. The group serves as a pathfinder to broader regional economic integration, similar to the EU. As a result, this gives it potential to form the basis for free trade across the Asia- Pacific region. The primary intent of the TPP negotiations is to eventually include all 21-member economies of the Asia-Pacific Economic Co-operation (APEC) forum.
R.C. Hunt, NPPC president, said Canada needs to end its federal and provincial hog subsidy programs, which he said are distorting the North American and world pork markets. “If the US had a subsidy program similar to Quebec’s, for example, we would double pork production in 10 years to the severe detriment of our Canadian counterparts,” Hunt said. “Subsidy programs are antithetical to free trade and to the spirit of the Trans-Pacific Partnership negotiations that Canada is entering.”
“Australian pork producers are aware that Canada’s federal and provincial governments bestow countervailable subsidies on the Canadian pig industry,” said Andrew Spencer, Australian Pork Limited CEO. “These subsidies cause significant distortions to overseas markets such as Australia, the US and New Zealand. Domestic subsidy programs are generally not within the scope of free-trade agreements. However, in this case, Canadian agricultural subsidies are so wide ranging and have such a broad and far-reaching impact on overseas markets it is on these grounds we, along with the US and New Zealand, urge the TPP negotiators and governments to deal with these issues fairly as part of the process.”
Owen Symmans, New Zealand Pork CEO, said his country supports safe free trade with appropriate management of biosecurity and food safety risks. However, it is concerned that Canada enters the TPP with federal and provincial government subsidies for the Canadian pig industry in place.
“The Province of Ontario recently enacted a new countervailable subsidy program called the Risk Management Program that sees Canadian farmers receive a guaranteed return for their pork production,” he added. “This sort of blatant subsidization places competing pork producers, who do not subsidize their production, at a distinctive disadvantage.”
Canada’s government actions are counterproductive to the overarching philosophy of the TPP’s goals and ambitions, Australian, New Zealand and US pork producers charge. As a result, the three countries’ pork organizations are creating a united stand to request that national trade representatives involved in the TPP negotiations address Canadian government’s action.