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Do the Canada-EU CETA negotiations have a new sugar problem ?

iPolitics | Oct 5, 2012

Do the Canada-EU CETA negotiations have a new sugar problem ?

By BJ Siekierski

Long the bête noire of Canadian trade policy, the supply managed dairy and poultry industries might have some new company.

Last Friday, Canada’s refined sugar oligopoly saw its protection renewed when the Canadian International Trade Tribunal (CITT) reversed its 2010 decision to end prohibitive antidumping and countervailing duties on European Union refined sugar imports.

At issue now is the precedent it sets as Canada and the EU try to settle their outstanding differences in one last marathon round of trade negotiations in Brussels later this month.

Many with an ear close to the ground believe the Europeans have at least won some additional quota for their cheese imports where Canada’s trading partners have repeatedly failed in the past to overcome the strength of Canada’s dairy lobby.

Wayne Easter, the international trade critic for the Liberals and a big proponent of supply management, is pretty sure that’s the case.

“The leadership of the dairy organization seems to be staying mum. They don’t want to say anything. They don’t want to get the government angry. And they’re hoping for the best,” he told iPolitics.

“Producers, on the other hand, are quite worried that either tariffs will be reduced or quotas will be increased.”

If that’s the case, the Europeans have to be worried about what that could mean if – after the agreement comes in force – dumping and subsidy cases quickly undermine those gains.

The Canadian Sugar Institute, the association that represents the two companies which dominate Canada’s refined sugar market, didn’t respond to a request for a comment.

The government, as expected, denied the Tribunal decision and CETA have anything to do with each other.

“The CITT review procedures regarding anti-dumping and countervailing measures are separate and independent from the CETA negotiations,” wrote Me’shel Gulliver Bélanger, a spokesperson for the department of foreign affairs and international trade.

While that should be the case in practice, however, the Europeans didn’t put it that way.

EU ambassador Matthias Brinkman participated in the CITT sugar review and the head of the EU’s economic and trade section told the Globe and Mail they intended to “study the decision”, which at the very least suggests the EU might not see it as a cut-and-dry as the Harper government does.

That’s not to suggest the Europeans actually think their sugar regime is beyond reproach ; after they lost a case at the WTO on sugar subsidies in 2005, they made some reforms, and have plenty more to make.

But that doesn’t change the obvious ; they’re the “demandeur” in the CETA negotiations.

As the Harper government constantly reminds, the EU has “500 million consumers and a GDP of over $17 trillion”.

That may translate into a lot of opportunities, but there’s also a power asymmetry that allows them to ask or rather – demand – a little more than the Conservatives might like to give.

It’s not as if the CITT refined sugar decision is about to derail the negotiations, but with other contentious issues still to be sorted out, it certainly won’t make the final Brussels round any easier.

 source: iPolitics