Tuesday, 8 May 2012

Blame Canada! (updated x2)

Radio New Zealand tell us,
Canadian trade minister Ed Fast says Canada has made a commitment to its dairy farmers and it won't scrap its protection of that industry.

Mr Fast has been in New Zealand to lobby for Canada's admission into the free trade Trans Pacific Partnership talks.

But a sticking point is Canada's supply management policy, under which certain agricultural products receive heavy protection, with tariffs on dairy products of up to 300%.

New Zealand wants those barriers removed as part of a high-quality comprehensive free trade deal.
Obviously there is no economic justification for such trade barriers so you do have to ask just how powerful a political lobby group is the agricultural sector in Canada. The Canadian consumer must pay a high price for this level of protection. Also given the example of countries like New Zealand can the Canadians not see the advantages to the removal of trade barriers and subsidies? I don't think anyone in our agricultural sector would want to go back to the old Muldoon days of protection.

Update: Eric Crampton argues is a bootleggers and baptists story, not just a cartel.
Update 2: Homepaddock argues Consumers pay price for protecting producers.

1 comment:

Eric Crampton said...

It's worse than that. The dairy cartel is largely supported by consumers who have a variety of utterly insane worries about what happens if imports of American milk are allowed. I noted some of these here. http://offsettingbehaviour.blogspot.co.nz/2011/12/dairy-population.html.

Bootleggers & baptists story, not just a cartel.