TPP Deal Reached; $4.3 Billion Committed to Cover Concessions on Dairy & Poultry Imports

After more than five years of negotiations, trade ministers and negotiators in Atlanta announced the conclusion of the Trans-Pacific Partnership deal on Monday morning.

Negotiations continued into the night on Sunday, delaying a joint news conference that was originally scheduled for Sunday afternoon. According to New Zealand’s trade minister, negotiations on dairy trade only ended around 5am on Monday. The press conference announcing the deal started shortly after 9am EDT.

While export-oriented sectors of Canadian agriculture are looking forward to increased market access to Japan and other Asian markets, the supply-managed dairy and poultry sectors were concerned about the government opening up the border to more imports. The deal includes new Canadian market access of 3.25 percent for dairy (with a significant majority of the additional milk and butter being directed to value-added processing), 2.3 percent for eggs, 2.1 percent for chicken, 2 percent for turkey and 1.5 percent for broiler hatching eggs. A $4.3 billion set of programs has been created to help supply-managed producers through the transition over the next 15 years (details can already be found here.)

Subscribe to the RealAg Dairy E-News Update

“We obviously would have preferred that no additional market access be conceded in the dairy sector,” said Wally Smith, president of Dairy Farmers of Canada on Monday. “However, we recognize that our government fought hard against other countries’ demands, and have lessened the burden by announcing mitigation measures and what seems to be a fair compensation package, to minimize the impact on Canadian dairy farmers and make up for cutting growth in the domestic market. We have come a long way from the threat of eliminating supply management. The government has clearly understood the importance of supply management dairy farms in rural Canada and the economic activities they generate.”

One the programs — the $2.4B Income Guarantee Program — is intended to protect dairy and poultry producer income during the implementation of both the TPP and the Canada-EU trade deal. Based on aggregate estimates, Ottawa says producers can expect the following amounts over a 15-year period:

• A dairy farmer could expect to receive approximately $2,087 per cow
• A chicken farmer could expect to receive approximately $0.35 per chicken
• A turkey farmer could expect to receive approximately $0.24 per kilogram of turkey (live weight)
• An egg farmer could expect to receive approximately $3.15 per layer hen
• A hatching egg farmer could expect to receive approximately $0.07 per hatching egg.

The agreement must still be ratified by the participating governments, including the U.S. Congress.

In Canada, an NDP win in the federal election on October 19th could complicate the ratification process as leader Tom Mulcair has said “we will not feel bound by any trade agreement signed by Stephen Harper that does not protect our supply management system in it’s entirety.”

Liberal leader Justin Trudeau has been supportive of a TPP deal, while criticizing the Conservative government for being “secretive and non-transparent” in the negotiations.

Trade Minister Ed Fast, responding to a question in the ministerial press conference, clearly stated Parliament will have to vote on the deal after the election.

More to come.

Related:

• Gerry Ritz: “We Have Dairy Farmers’ Backs”
• Canadian Ag Exporters Counting on Canada’s Participation in TPP — CAFTA’s Perspective from Atlanta
• Canola School: Understanding What the TPP Could Mean for Canola Growers
• Privy Council Clarifies Election Rules Allowing Canada to Continue in TPP Negotiations
• The Trouble with the TPP
• TPP Participation is Critical for Maintaining Canadian Pork Exports