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trade talks

Prime Minister Stephen Harper and his wife Laureen visit a dairy farm while camapigning in Acton Vale, Que., Sunday April 10, 2011.Sean Kilpatrick

One of the key players in talks to create a trans-Pacific free-trade zone is disputing the Harper government's insistence that Canada can join these negotiations but preserve protectionist tariff walls sheltering poultry and dairy farmers from foreign competition.

New Zealand Trade Minister Tim Groser used a speech at the opening of a dairy factory in his own country this week to raise questions about Canada's application to join the Trans-Pacific Partnership negotiations – talks that U.S. President Barack Obama's administration has said will "set a new standard for global trade."

New Zealand is the world's largest dairy exporter and one of the driving forces behind the Trans-Pacific talks, trade liberalization negotiations currently including the United States and eight other countries that are on track to eclipse the North American free-trade agreement in importance.

Canada announced earlier this month that it wants to join the Trans-Pacific talks – as did Japan and Mexico – but the Harper government has repeatedly insisted it can negotiate a deal while preserving this country's so-called supply management tariff protections for dairy and poultry.

Tariffs that currently shield Canadian dairy and poultry products from foreign rivals range from 150 per cent to nearly 300 per cent and Mr. Harper has pledged to "resolutely defend" them.

Mr. Groser, while welcoming Canada's interest in joining the talks, made it clear in the Nov. 22 speech that he considers the tariff walls around Canadian dairy and poultry out of step with the goals of the negotiations.

He said the nine countries already negotiating at the Trans-Pacific talks have committed to do away with tariffs and other barriers to trade.

"Elimination of tariffs and other like measures is a pretty stark [phrase]" said Mr. Groser, referring to language used by countries at the discussions. "I don't think there is any ambiguity about that."

He said this means that tariffs that for decades have protected sensitive agriculture sectors such as dairy, sugar or rice would have to be phased out over time under a Trans-Pacific Partnership deal, a process that he acknowledged would take at least a decade.

That would be tough for Canada, Mr. Groser told his audience Tuesday on the South Island of New Zealand.

Summing up the Canadian system for his listeners, Mr. Groser cast this country's sheltered and centrally controlled dairy and poultry industries as outdated.

"Canada follows a policy that many governments used to follow but most have moved forward," he said.

"It is called supply management. It is completely inconsistent with tariff elimination."

Rudy Husny, a spokesman for Canada's International Trade Minister Ed Fast, said Ottawa's plans to shelter supply management is not unusual.

"All countries, including New Zealand, approach trade negotiations with a view to protecting their interests. Canada's approach … will be no different."

Mr. Groser said that in past trade talks Canada has always sought special exceptions for this system.

But the Trans-Pacific talks, he said, are "designed explicitly not to be business as usual."

The New Zealand Trade Minister emphasized that existing Trans-Pacific member countries will vet applications from Canada, Mexico and Japan very carefully, seeking "clear evidence" they are committed to liberalizing trade, "including the most sensitive matters."

He said admittance to the talks requires this.

"We will be looking for clear political signals of a reasonably broad-based understanding that it is not just a matter of turning up at the club and demanding membership," Mr. Groser said.

"When our leaders said 'eliminate' tariffs and other direct barriers to imports, they meant it."