Canadian producers protest at EU export subsidies

CANADA - The EU's plans to introduce export refunds on all pig meat products has been condemned by Canada's pig industry.
calendar icon 3 December 2007
clock icon 3 minute read
EU export refunds on pork products have been condemned by Canada and other nations

Clare Schlegel, president of the Canadian Pork Council (CPC), says the proposals are astounding. His members are extremely disappointed and are lobbying government officials on the legality of this EU decision.

The export subsidy rates run as high as CDN 75 cents per kilogram and are understood to be applicable to all export destinations.

“We are astounded that the EU has chosen a method of addressing its pork industry’s economic difficulties that will impose even more extreme hardship than that already being experienced for pork producers elsewhere”, said Mr Schlegel, a pig farmer from Shakespeare, Ontario.

He said that the CPC appreciated the reasons behind the EU's proposals and it agreed that European farmers did need some financial support. However, Government subsidies that directly lower export prices are widely viewed as the most trade-distorting form of agricultural assistance.

Trade distortion
"It is the reason why the elimination of export subsidies has been a bedrock objective of the Doha Round of World Trade Organisation negotiations," said Mr Schlegel.

“We fully understand that the EU must address the economic crisis being faced by its pork producers, but high feed prices and the weak US$ are the exact same challenges being faced by pork farmers in Canada and many other countries. These European subsidies will force other pork exporters to cut prices to remain competitive with their EU-based counterparts, compounding the economic difficulties around the world,” he added.

European producers may have seen feed prices escalate more than 35 per cent during the past year, but they are not alone. Canada's pig producers are facing similar pressures as are producers in South America and the Far East.

“Surely the EU can choose an alternative means of assisting its pork farmers - one that is less trade-distorting and damaging to other countries,” concluded Mr. Schlegel.

The CPC is currently in direct negotiation with Canada's Government to ascertain the legal validity of the EU's actions. It is also exploring what options exist to persuade Europe to change tack and pursue a path that is more favourable to international trade relations.

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