Canada resists US pressure to weaken poultry supply management system

By Keith Nuthall, in Ottawa

- Last updated on GMT

Canada and US talk tough over poultry
Canada’s Government has been talking tough about protecting the country’s supply management system, as negotiators conduct what might be the final round of talks to renew the North American Free Trade Agreement (NAFTA), with the United States and Mexico.

Faced with objections from US President Donald Trump about sky-high Canadian tariffs on out-of-quota imports of some foods, including chicken and turkey, Ottawa has stressed that it wants to preserve its supply management of these poultry products within Canada.

The system involves production quotas and guaranteed prices for Canadian poultry farmers, a system that would be wrecked by a revised NAFTA deal that scrapped import quotas backed by punishing tariffs.

Speaking to journalists on Tuesday (28 August), Canadian Prime Minister Justin Trudeau said: “The US administration is targeting supply management – they want us to eliminate supply management. I can tell you, we will protect supply management. It’s a system that works for our farmers and consumers.”

It is not a view shared by US President Donald Trump, who declared on Monday in the Oval Office that he was determined to lower Canada’s out-of-quota supply management tariffs: “You know, they have tariffs of almost 300% on some of our dairy products, and we can’t have that,”​ he said.

Canadian tariffs on poultry products imported from the USA over agreed NAFTA ceilings are indeed punishing (the goal being to solidify the supply management system) – being 238%. For out-of-quota turkey meat, the rates are 154.5%. But for imports within the agreed annual limits within NAFTA, they are much lower – generally between 4% and 9%. Those quotas allow for lower duty imports of NAFTA-made chicken of up to 7.5% of the previous year’s Canadian production; and 3.5% of anticipated current year’s production for turkey.

This has allowed for significant trade. Canada imported US$406 million-worth of chicken products (whole birds, cuts and offal) from the USA in 2017, according to Canadian Government trade data, and US$457m-worth in 2016. Canada imported US$21m-worth of turkey products (also whole birds, cuts and offal) in 2017, and US$19.5m-worth in 2016.

A spokesperson for Chicken Farmers of Canada said: “Supply management has never impeded trade discussions and there’s no reason to expect it to now. We are monitoring the discussions and we trust that the Government will keep its commitment to defend the interests of all of Canadian agriculture, including supply management, so that consumers can continue to rely on safe, local, Canadian food raised to the highest standards.”

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