News Release Archive
AGRICULTURE AND MARKETING--CANADA-U.S. TRADE DISPUTE ------------------------------------------------------------ Agriculture Minister Wayne Gaudet said today he's confident that Canada will win a trade dispute with the United States which could otherwise threaten the dairy, poultry and egg industries in the country. Under the World Trade Organization Agreement on Agriculture, formerly the General Agreement on Tariffs and Trade or GATT, all member countries are required to replace non-tariff trade restrictions with tariffs. As a result, the import quotas which were in place for dairy and poultry products have been converted into tariff equivalents. These will be reduced over time. The U.S. is now challenging the legitimacy of the new tariffs in the context of the North American Free Trade Agreement, NAFTA. Canada's right to maintain import restrictions in support of supply management systems was explicitly recognized in the Canada-U.S. Free Trade Agreement and later within NAFTA. A NAFTA panel has been established to rule on the issue and is expected to report in June. Mr. Gaudet said, "We believe that Canada's actions with respect to new tariffs fully respects the spirit and letter of these agreements. Both agreements were negotiated openly and fairly, and at no time did the U.S. side leave the negotiating table with the expectation that they had gained free access to the Canadian market for supply managed products. I am looking forward to a favourable resolution to this dispute and we strongly support Canada's position." Agricultural industries and systems are currently adapting to many changes stemming from these new trade rules and the changing marketplace. Over 50 per cent of agricultural production in Nova Scotia is under national supply management or "orderly marketing" systems. These farm sectors, together with processors and related businesses, directly employ 4,250 Nova Scotians. Many o these jobs will be at risk if Canada loses the panel decision. One positive outcome that Mr. Gaudet anticipates once the issue is settled is that farms will be able to plan and invest with a greater degree of certainty than has been the case for over a decade. The multilateral trade negotiations, and previously the Canada-U.S. and NAFTA negotiations with Mexico all generated significant uncertainty and created a difficult business planning environment for agriculture and related industries. The general pace of change within agriculture is extremely demanding at anytime and conforming to the new trade rules has required many adjustments and reforms to the supply management systems in recent years. Mr. Gaudet said, "Careful reviews of the two trade agreements have given reassurances that Canada's actions have been fully consistent with our rights and obligations under both NAFTA, and the WTO or GATT. -30- Contact: David Robinson 902-424-8948 jlw Feb. 14, 1996 3:30 p.m.