PM Trudeau defends Canadian dairy system

Trudeau defended Canada's dairy supply management system noting that every nation including the US defends its agricultural industries as much as it can.

 

	1 of 3
Canada has a supply management system fodairy products, poultry and eggs. It is discussed in a recent Digital Journal article. Trump recently criticized the dairy system during a speech in Wisconsin a cheese-producing state. In an interview with Bloomberg television Trudeau points out that the US actually runs a dairy surplus with Canada. Trudeau noted that the system worked quite well in Canada and said: "Let's not pretend we're in a global free market when it comes to agriculture. Every country protects, for good reason, its agricultural industries." Trudeau made his response after Trump again attacked the Canadian dairy industry as well as lumber, timber and energy sectors. It is Canada that should be complaining about the energy sector under NAFTA. If Trump's slogan is America First, under NAFTA Canada comes second.

As an article in Rabble notes:The proportionality clause says that if the government of any NAFTA member country takes action that cuts the availability of energy for export to another NAFTA member country, it must continue to export the same proportion of total "supply" that it has over the previous three years. If it cuts energy available for export to another member country, it must also cut the supply of that energy domestically to the same extent.The proportionality rule means that Canadians cannot have priority access to their own energy supplies. Richard Heinberg, a noted California energy expert said that proportionality is unique in all of the world's trade treaties. Heinberg claims that "Canada has every reason to repudiate the proportionality clause, and to do so unilaterally and immediately." With the opening of NAFTA Trudeau has every opportunity to do this. However, he has yet to reveal what he intends to change. He has not mentioned this clause, no doubt for good reason. The US would never accept it being dropped. The US wants Canada to be first and foremost a reliable source for oil and gas who will not put the needs of Canadians above those of the US.

I doubt the issue will even make it to the mainstream press. What we have instead are attacks against the management supply system by international dairy bodies that have already been captured by the neo-liberal policy agendas that will profit large corporations. A recent Globe and Mail article by Campbell Clark, takes on the task of attacking the system and predicting its demise:The end is coming for Canada’s supply managed dairy market, not immediately, but almost inevitably. That’s not because U.S. President Donald Trump has claimed the Canadian system is unfair to U.S. farmers. The hypocrisy of a President who crows about an America First trade policy while demanding access to Canada’s market makes one of the best arguments for keeping the protectionist system. But the political market for supply management is weakening. For Canadian politicians, it will soon be more valuable to give it up in trade talks than it is to use it to buy the votes of dairy farmers.The article points out that from more than 100,000 dairy farms in Canada the number had declined to 11,260 in 2014. Half of these are in the province of Quebec but even there a Conservative MP Maxine Bernier is running for his party's leadership on a pledge to eliminate supply managed. It should be noted that the Conservatives have only 5 seats in Quebec in the federal government.

Campbell notes that the US wants concessions. Canada could trade doing away with the supply management system in order for greater market access for steel pipes, lumber, or exemption from border taxes. US lumber and steel companies may object to any such deal as it conflicts with Trump's America First doctrine. However, Trump may very well abandon that as he has other campaign promises especially as Steve Bannon seems to be losing influence and Wall Street and the military appear to be winning power in his administration. While the strength of dairy farmers under the supply-management system may be waning it may still be strong enough to keep its protections under NAFTA.

Trump has said that the US will report within two weeks what it is intending to do with NAFTA, that he promised to renegotiate.

Trudeau said he planned to move the trade conversation ahead "in a way that both protects consumers and our agricultural producers". Trudeau also noted about Trump: "He has shown if he says one thing and actually hears good counter arguments or good reasons why he should shift his position, he will take a different position if it's a better one, if the arguments win him over." Trump does often flip flop but Trudeau is being overly kind in suggesting Trump's reason for doing so.

There is no sign of the renegotiation being an open transparent process, or that there will be any public consultations on this exceedingly important issue. It is likely to be done in secret behind closed doors with the most important stakeholders giant international corporations having a significant presence. A list of demands from the Council of Canadians can be found here.

TPP degrades democracy results in less competition

- The announcement that an agreement was reached by the 12 nations negotiating the Trans-Pacific Partnership(TPP) has resulted in considerable discussion and debate on the pact.

+ Add Image

The text of the agreement has never been made public and it is not clear when the text will be released. The details released are probably released by parties whose interests are involved. Many critics of the TPP complain about the secrecy and lack of transparency in the process. There is much discussion of the impact of the deal on agriculture sectors such as dairy farmers who have a supply-managed system. While the agreement does open the system somewhat to allow more imported products into Canada, the basic supply management system remains. The negative impact of the changes will be muted through compensation paid to the industry courtesy of the Canadian taxpayer. The auto parts industry will also be hurt with many jobs lost. Again Harper promises billions of taxpayer money to mute the negative impact.

There is less discussion of other significant aspects of the agreement. The TPP, as with other trade agreements such as NAFTA, is less about free trade and more about placing the power of global corporations beyond the reach of democratic governments. Ironically, our government quite consciously bargains away our right to pass laws and regulations as we see fit. If we pass laws or regulations which are considered inconsistent with the TPP, a foreign corporation can sue Canada.

A leaked text of part of the TPP includes an investor-state dispute settlement(ISDS) very much like the already existing mechanism in Chapter 11 of the North American Free Trade Agreement. Wikipedia describes an ISDS as follows: Investor-state dispute settlement (ISDS) is an instrument of public international law, that grants an investor the right to use dispute settlement proceedings against a foreign government. Provisions for ISDS are contained in a number of bilateral investment treaties, in certain international trade treaties, such as the North American Free Trade Agreement (Chapter 11)...If an investor from one country (the "Home State") invests in another country (the "Host State"), both of which have agreed to ISDS, and the Host State violates the rights granted to the investor under public international law, then that investor may bring the matter before an arbitral tribunal.As mentioned, NAFTA contains such a provision.

There have been many cases in which Canada has been sued by foreign corporations. In August 2008 Dow Chemicals submitted a claim for losses caused by a Quebec ban on the sale and certain uses of pesticides containing 2-4 D. In this case, the two sides reached a settlement accepted by the tribunal. States cannot sue corporations under the ISDS nor can they receive any compensation should a corporation lose except for their legal costs in some cases.

Canada has already lost seven cases under the ISDS process and paid out damages of $190 million and who knows how much in legal fees. One case filed against Canada challenges a Quebec ban on oil and gas fracking in the province. An analysis of cases under the NAFTA provisions can be found here:This study documents the 77 known NAFTA investor-state dispute settlement (ISDS) claims up to January 1 2015. These include 35 against Canada, 20 against the U.S., and 22 against Mexico. Canada has paid out NAFTA damages totaling over $CAD172 million, while Mexico has paid damages of $US204 million. The U.S. has yet to lose a NAFTA chapter 11 case. All three governments have incurred tens of millions of dollars in legal costs to defend themselves against investor claims.

In Europe, the issue of ISDS mechanisms has been hotly debated The EU parliament has passed a resolution that will require replacing an ISDS system in the Transatlantic Trade and Investment Partnersip(TTIP) ".. by a new public and transparent system of investment protection, in which private interests cannot undermine public policy and which is subject to public law." Brazil refuses to sign any treaty with ISDS clauses. South Africa intends to withdraw from any treaties that have ISDS clauses. In Canada the politicians of the major parties appear to think the issue is not worth bringing into public debate. What is significant are issues that impact specific interests such as the dairy industry or auto industry, where the parties might win or lose votes if they take the wrong position. That the democratic system itself is endangered and more power given to global corporations does not seem important.

If provisions in the TPP allow more penetration of global corporations into new markets such as the Canadian dairy and auto industry then competition will be fostered but in general the exact opposite is the case. In any free trade deal there are always clauses extending copyright and patent lengths, giving corporations monopoly rights over their products. We can expect the costs of drugs to our health care system to increase dramatically as a result of the TPP. It will become more difficult for producers of less expensive generic drugs to be able to replace drugs protected by patents. Protection of copyright terms in the TPP will prevent free or less expensive copied version of items:In the area of copyright, the TPP would require far longer terms of protection than what Canadians agreed to in a parliamentary copyright law review that only wrapped up recently. To smooth the way for the TPP, the federal government has already agreed, in the latest omnibus budget bill, to extend copyright terms for audio recordings from 50 to 70 years. The TPP could also require protection for controversial “digital locks,” which allow copyright holders to encrypt software in computerized devices and criminalize its circumvention.We do not know exactly what will be in the final text. With provisions such as these in the leaked text, it is not surprising that the final text will probably not be released until after the election.