Friday, 16 June 2017

Cartel's gonna cartel

Canada's dairy cartel continues to impress. After Canada negotiated increased access to Canadian markets for European cheesemakers, the dairy cartel managed to do this:
Under the terms of the Comprehensive Economic and Trade Agreement (CETA), Canada has agreed to allow nearly 18,000 additional tonnes of European cheese to be imported tariff free.

But CBC News has learned that when Canadian officials briefed their European counterparts on how they would allocate the quota for importing this new cheese, not everyone around Europe's cabinet table felt Canada's approach lived up to the spirit of the negotiations.

A European official, speaking on the condition of anonymity because he was not authorized to speak, characterized the state of things as a "row."

Canadians haven't been transparent enough about several aspects of CETA's implementation, the source said, and presented the cheese quota decision as a non-negotiable fait accompli. It was a final straw for upset Europeans who had been otherwise eager to get on with the deal.

The source said Canada informed the EU that 60 per cent of the new import quota would go to domestic dairy producers and processors. Europeans fear they won't use it, so fewer new cheeses compete with their domestic products.

If the quota's unused, or there's any incentive to delay imports, Europe could be effectively denied the market access it fought for years to get. CETA provides a way for complaints like this to be resolved, but Europeans would prefer not to have to sue Canada after the fact, the source said.
Emphasis added. So opening up to greater access to European cheeses gives the bulk of that import quota to the existing dairy cartel. Recall that rather a few of Canada's dairy processors are cooperatives owned by quota-holding Canadian dairy farmers; I've not seen anything on how that 60% gets split. If a decent chunk goes to the companies that haven't quota interests, maybe it wouldn't be so bad.

But still: more reasons to be skeptical about the merits of including Canada in free trade deals if trade in agricultural goods matters.

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