October 28, 2018 10:20 am

Here’s why New Zealand’s trade minister says ditching supply management helped their industries grow

WATCH: David Parker, New Zealand's minister for trade and economic growth, tells Mercedes Stephenson that since his country signed a free trade agreement with China 10 years ago, trade with this country has tripled — including an increase in dairy exports.

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Supply management might be a sacred cow in Canada but for New Zealand, bringing that cow to market actually helped their industries grow.

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In an interview with the West Block’s Mercedes Stephenson, New Zealand Trade Minister David Parker explained why his country is joining talks to reform the World Trade Organization, what advice he has for other countries looking to negotiate free trade with China — and what happened after his country ditched supply management, something of interest here, given the ongoing debate in Canada over how much market access to allow foreign farmers.

READ MORE: Study says Canada needs trade with China, but the USMCA will make that more challenging

“Our industry has become more efficient and larger,” he said.

“Rather than being adverse to their interests, it’s turned out the opposite way. There were fears, of course, at the time, but it’s worked out very well.”

WATCH BELOW: Is Canada’s supply management system the cause of disappearing dairy farms in U.S.?

Under the recently-reached USMCA, Canada will allow American dairy farmers increased market share here.

That’s something Canadian dairy farmers argue takes away shelf space they feel belongs to them.

In response, the Liberals pledged to offer compensation to the dairy industry to offset the lost market share.

WATCH BELOW: Federal compensation a ‘clear commitment’ for Canadian farmers affected by USMCA

That follows the same steps taken after the Canada-European Union trade deal also offered increased market access to European dairy products.

So far, compensation offered in response to that deal has come in the form of a fund of $250 million being given to farmers to help them become more efficient and modernize.

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Parker wouldn’t say what he made of Canada’s continued protection of the industry in the USMCA deal, noting “there are, obviously, sensitivities.”

He was similarly diplomatic on the question of free trade with China, something the Kiwis have had for a decade this month.

The USMCA deal requires any member country to notify the others if it intends to pursue a free trade deal with China.

Both other countries would then have the option to withdraw after six months and replace the deal with a bilateral one between themselves.

WATCH BELOW: USMCA offers ‘opportunity’ to fix trade imbalance with China, Harper says

Parker noted that while free trade with China has worked out “very well” for New Zealand, the matter is one for Canadians to decide for themselves.

“I would say that’s a matter for them but if they want to look as to good rules you would have in an agreement that protect both sides of that transaction, they could look at the terms of the New Zealand agreement,” he said.

Parker also said the terms of the CPTPP, the 11-nation Asia-Pacific trade deal on the verge of being ratified by Canada, also provides some good guidance.

China is New Zealand’s biggest trading partner, alternating that position every now and then with Australia.

And while trade with China is double what the country does with the U.S., Parker said New Zealand and the Americans share concerns about the state of trade more broadly, specifically when it comes to trading rules and the WTO.

Parker is among the representatives from 12 other countries who were in Ottawa last week for meetings with Canadian officials about how to pursue reforming the trade organization.

Specifically, he said New Zealand shares U.S. concerns that it is taking the trade body too long to hear complaints — and that is costing both money and trust.

Reforming issues like that, he said, will be vital if the WTO is going to remain relevant amid rising populist and protectionist movements.

“The WTO doesn’t seem to be able to update its rules to meet current challenges,” he said.

“If we can’t achieve that as an international community, the WTO will wither.”

Watch an extended interview with New Zealand Trade Minister David Parker below.

 

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