National | Media Release

TPP sets stage for 10-year phase-out of Canadian dairy, Harper puts taxpayer on the hook to cover cost, says NFU

(October 5, 2015)The National Farmers Union (NFU) denounces the Trans Pacific Partnership (TPP), which would severely damage Canada’s supply managed sectors – dairy, chicken, turkey and eggs – and provide illusory market gains for other agriculture sectors such as beef, pork, grain and oilseeds. Today, all supply managed farmers earn their livelihood from the marketplace, but the TPP will deny them the ability to fully serve Canadian consumers. The government’s promised compensation to dairy producers for their losses will be borne by the taxpayer.

The other 11 TPP countries would gain tariff-free access to 3.25 per cent of Canada’s current dairy market, 2.3 per cent for eggs, 2.1 per cent for chicken, two per cent for turkey and 1.5 per cent for broiler hatching eggs.

The detailed text of the TPP is still secret and unlikely to be revealed before the federal election. Statements made by New Zealand’s dairy industry and its trade minister indicate that the TPP may contain additional concessions on dairy that will be phased in over time or will be the subject of future rounds of TPP talks.

“The federal government’s promise of a $1.5 billion compensation package for loss of quota value over ten years and $2.4 billion for loss of income over 15 years seems unnecessarily high if we are only talking about a 3.25 percent dairy quota cut,” said Jan Slomp, NFU President. “This large dollar amount suggests that the intent is to completely dismantle dairy supply management over the next ten years.”

“Most countries protect and support their domestic dairy markets and subsidize their farmers. Canada’s system does not require taxpayer support, and farmers obtain a fair return from the market. Dairy farmers in export-oriented countries, including TPP participants New Zealand, Australia and the USA, are suffering from their countries’ failed policies,” Slomp added. “Sacrificing our farmers and destroying a system that works for Canadian farmers, consumers, processors and taxpayers will not solve New Zealand’s problems. Supply management should have been kept right out of TPP negotiations.”

Each trade deal, whether it is the WTO, CETA or the TPP, adds on to the measures adopted in previous deals. Each has chipped away at Canadian farmers’ share of our own domestic market by increasing the amount of tariff-free imports allowed. If the TPP goes through, 1 out of every 10 litres of milk consumed in Canada will be purchased from non-Canadian entities – those consumer dollars will exit our economy, and will support jobs and investment in other countries instead of here at home.

The NFU also decries the TPP’s anti-democratic measures, including the investor-state dispute settlement mechanism — which allows corporations to sue governments if laws or regulations reduce their profit-making potential — and the requirement for crown corporations to operate as if they were for-profit businesses instead of serving their primary public purposes.

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For more information:
Jan Slomp, NFU President: (250) 898-8223 or (403) 704-4364
NFU Election Issues summary: Trade Agreements – CETA and the TPP

John Wilson, Chairman of New Zealand’s dairy exporter, Fonterra said: "While I am very disappointed that the deal falls far short of TPP's original ambition to eliminate all tariffs, there will be some useful gains for New Zealand dairy exporters in key TPP markets such as the US, Canada and Japan. Greater benefits will be seen in future years as tariffs on some product lines are eliminated." Fonterra let down by remaining tariffs in Trans-Pacific Partnership

New Zealand Trade Minister Tim Groser said: "On dairy, some (products) will achieve tariff elimination, on others it has been too difficult. We started from a high level of ambition. We haven't been able to achieve that today, but it's established a direction of travel. This will open space for future generations of trade ministers.” – TPP deal gives limited win for NZ dairy