The launch of a project of a free trade area (FTA) gathering ten Pacific Rim countries1 was announced on November 12, in conjunction with the Forum of the Asia-Pacific Economic Cooperation (APEC). Representing over 500 million consumers, 35 percent of global GDP and a third of international trade, the “Trans-Pacific Partnership” would thus become the world’s largest FTA.
While the objective of the negotiations is to eliminate customs duties and other trade barriers for industrial and agricultural goods, the Canadian farmers are afraid that the supply management system implemented over thirty years ago is threatened, in spite of the Government’s assurances. In fact, several nations involved in the talks have a very negative view of the agricultural policy conducted by Canada. Moreover, a recent study by the Canadian Council of Chief Executives considers that the country will be forced to abandon the system, if it wants to be taken seriously in the talks.
Consequently, Canada could soon find itself in the same situation as India did during the latest WTO talks on the special safeguard mechanism, and could be forced to decide on the end of regulatory system in order to benefit from more advanced regional integration. Yet, the past few years have shown that, faced with the consequences of the unfettered regulation of agricultural markets, the Canadian system has proved its effectiveness to limit agricultural price hyper-volatility2.
As shown by the repeated failures of the WTO talks on similar issues, is it not time to break with the rationale that states that, to integrate an FTA, a State must dismantle the regulatory mechanisms that correct market shortcomings, while unfettered liberalization only aggravates imbalances?
1 Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, Japan and Canada.
2 Please see momagri June 13, 2011 article “Supply Management in Canada” at: http://www.momagri.org/UK/personal-accounts/Supply-management-in-Canada_932.html