Prime Minister Stephen Harper is heading to Brussels Thursday to conclude a free-trade deal with the European Union that probably will affect everything from beef exports to dairy imports to trade in vehicles.
But after four years of hard bargaining, it was the government’s latest concession to the EU over cheese quotas that seems to have broken the logjam on one side of the Atlantic and raised defences here — particularly in Quebec.
Harper is expected to sign an agreement-in-principle with European Commissioner José Manuel Barroso that will more than double the amount of European cheese allowed into Canada to about 30,000 tonnes.
After more than a decade of exponential growth in the Quebec cheese industry, dairy producers in the province say they are being sacrificed by the federal government.
François Dumontier, the public and government relations adviser for the Fédération des producteurs de lait du Québec, said the deal will be a huge blow to fine-cheese producers in Quebec.
“Canadians and Quebecers will not eat more cheese because more is being imported,” Dumontier said. “So the small businesses that have invested a lot to develop this niche will have a hard time surviving.”
The trip follows an announcement in Wednesday’s throne speech that the government would “soon” complete negotiations on a comprehensive free trade agreement with the European Union.
Canadian duty-free beef access into Europe and the EU’s demands for Canada to open up its dairy sector were some of the final sticking points in reaching an agreement that one agricultural expert said could mean up to $1.3 billion in new exports from Canada.
The Dairy Farmers of Canada, however, assailed the Conservative government Wednesday. “Dairy farmers will not support the Harper government agreeing to a deal with the EU that gives away the Canadian cheese market that Canadian dairy farmers and cheese makers have worked so hard to develop over the years,” the lobby group said.
Quebec now produces half of all Canadian cheese, and 60 per cent of all fine cheese made in Canada, Dumontier said.
The province has three big producers — Agropur, Saputo and Parmalat — but there are also 60 small producers of fine cheese, like the Louis d’Or or Riopelle de l’Isle.
The dairy industry in Quebec employs 83,000 people.
“We hope the Quebec government will stand with us,” Dumontier said. “Or real jobs will be lost.”
Mélanie Malenfant, a spokeswoman for Quebec Finance Minister Nicolas Marceau, said she wouldn’t comment until there was confirmation of a tentative agreement, but added that “The Quebec government is still in favour of an agreement for the benefit of Quebec.”
Final approval, once an agreement in principal is reached, will rest with the provinces and the EU’s 28 member states.
If the reported deal proceeds, the Harper government will have given the EU additional exclusive access to 32 per cent of the fine-cheese market in Canada, according to the Dairy Farmers of Canada.
Federal officials note that approximately 96 per cent of the nearly 420,000 tonnes of cheese sold in Canada is produced domestically.
The Conservative government is expected to argue that Canadian producers won’t feel much of an impact because, with the cheese market growing by 8,000 tonnes a year, the additional EU access will amount to around four per cent of total Canadian cheese consumption.
In return, Canadian cheese producers would get tariff-free access into Europe and could export more.
The Canadian supply-management system protects fewer than 20,000 dairy and poultry farmers, handing them production quotas and shielding them with a tariff wall in a system that ultimately forces Canadians to pay inflated prices for products like milk, cheese, chicken and eggs.
Major Canadian business groups have urged the government to begin planning for a transition away from what they say is an antiquated system of supply management.
On Wednesday, the Canadian Council of Chief Executives and Canadian Chamber of Commerce welcomed news of an imminent deal.
“By tearing down trade barriers and encouraging regulatory coordination, this deal with the world’s largest economy will bring more opportunities for exporters and lower prices for consumers, as well as encouraging new investments in Canada,” Perrin Beatty, president of the Canadian Chamber of Commerce, said in a statement.
The official opposition NDP, however, said it is worried the Conservatives may be throwing Canadian dairy farmers “under the bus.”
“If (Harper) sells out Canadian dairy farmers on this one, having promised that he wouldn’t fool around with Canada’s system that has protected dairy farmers for years, then there’s going to be a hell of a price to pay,” said NDP leader Thomas Mulcair.
Dairy Farmers of Canada has urged the Harper government to leave their sector largely untouched, and has also said it would not tolerate any reduction in the over-quota tariffs, which are close to 250 per cent.
A spokesman for International Trade Minister Ed Fast maintained Wednesday negotiations with the European Union are ongoing and that any agreement will protect Canadian dairy farmers.
Source: Montreal Gazette