Congress Prods Canada on Trade


by Chris Clayton, DTN Ag Policy Editor

WASHINGTON (DTN) — Agricultural leaders in Congress have differing views on the Trade Promotion Authority debate, but lawmakers question whether the Canadian government is capable of ending some of its supply-management policies that effectively block U.S. exports of dairy, egg and poultry products.

Rep. Collin Peterson, a Democrat from Minnesota, serves as ranking member on the House Agriculture Committee. Peterson opposed the North American Free Trade Agreement and right now is against the Trade Promotion Authority bill. Talking to reporters Tuesday morning, Peterson was asked about getting more agricultural products into Japan, but he immediately turned his attention to Canada, which borders his congressional district.

“The bigger issue is the Canadian situation,” Peterson said. “We have got to address this problem that was closed in NAFTA.”

Committees in both chambers passed TPA bills last week, though it is unclear at this point when either house would bring a bill to the floor. Democrats generally don't think the trade authority bills go far enough to protect American jobs, while Republicans who support free trade also are leery of granting such authority to President Barack Obama.

The 12-country Trans-Pacific Partnership hinged on Congress passing Trade Promotion Authority. Two key U.S. trading partners, Japan and Canada, have both indicated they are waiting to offer their best deal until after Congress passes TPA. That way, Congress could not amend any final TPA deal.

Peterson noted agriculture was promised more exports than imports in NAFTA, but the Canadians instead maintained tariffs as high as 450{f2533179b7c7e7cbdbc11018732de14c82f3d44c9f1e829e9a046cc47141a2e6} on some dairy products. Canada's supply management systems for dairy, eggs and poultry have effectively prevented any credible volume of exports north.

“If we're going to have zero tariffs on their stuff, they should have zero tariffs on our stuff,” Peterson said.

In this real-life chicken-and-egg scenario, Peterson said he would vote against Trade Promotion Authority if there is no deal with the Canadians, but he also acknowledged Canada is unlikely to make any offers until much later in the process.

Peterson said he would not be satisfied with Canada waiting until the end of the Pacific negotiations to bring forward another proposal on agriculture. Yet, he believes Canada's conservative government is caught in a bind because of the October elections. If Canadian Prime Minister Stephen Harper offers to end those supply management programs as part of a trade deal, Peterson said, “It could cause the Canadian government to fall.”

House Agriculture Committee Chairman Mike Conaway, a Republican from Texas, reiterated some of Peterson's concerns. Conaway said he did not think Canada would offer any deal until after the fall elections.

Peterson noted Canada's supply management on dairy has led to Canadian dairy processors moving into the U.S. and buying dairy facilities and building new ones. Yet, the U.S. is locked out of the Canadian market. “That's a result of NAFTA, and if we don't get that fixed, we're never going to get it fixed,” he said.

Darci Vetter, the U.S. Trade Representative's chief agricultural negotiator, told reporters Monday that no formal offers have come from Canada, but there is a push “at very high levels” to get Canada to commit and come forward with a proposal. Vetter also noted that agriculture and automobile sales remain the big sticking points in the Pacific talks, particularly with Japan. Vetter said no actual agreement was expected between President Obama and Japanese Prime Minister Abe Shinzo this week.

Senate Agriculture Committee Chairman Pat Roberts, a Republican from Kansas, has remained a steadfast supporter of Trade Promotion Authority, but he questions whether the votes will be there on the Senate floor to complete a deal. “Too soon to tell,” Roberts said Tuesday. “I think a lot depends on the president and whether he is able to allay the fears some people have on trade.”

Without TPA to close the Pacific deal, Roberts said, “China will come and take that trade.”

Still, Sen. Debbie Stabenow, a Democrat from Michigan, voted against Trade Promotion Authority in the Senate Finance Committee last week. Stabenow pointed to problems in the Pacific talks in manufacturing, and she also criticized the lack of real enforcement provisions in the TPA bill regarding problems with currency manipulation. As a senator from the home of Ford and General Motors, Stabenow also cited problems selling vehicles in Japan. She noted her father was a car dealer.

“You can't sell in Japan at all,” she said. “Think about how many Japanese cars you can buy here. You can't even sell over there, as well as a whole other range of problems.”




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