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Ottawa — Canada is joining a massive Pacific Rim free trade zone, but has sacrificed some long-held protections for the country’s dairy, poultry and auto industries to gain entry.
Negotiators for the 12 members of the Trans-Pacific Partnership struck a tentative deal in Atlanta early Monday morning that will eliminate most tariffs in a region spanning roughly 40 per cent of the global economy.
But that will come at a hefty price for some sectors, and for taxpayers.
Ottawa said Monday it will spend $4.3-billion over 15 years to compensate dairy, chicken and egg farmers, who are ceding what Canadian officials called “limited access” to their now highly protected markets under the TPP deal. The subsidies will “keep producers whole,” according to a government press release.
The deal, originally slated to be announced Friday, was delayed numerous times over the weekend as countries haggled over last-minute details on autos, patent protection for drugs and agricultural products.
Canadian officials said a text of the tentative agreement would likely be released in the next few days. The final legal text is expected to take longer to complete.
Canada will give other TPP countries duty-free access to 3.25 per cent of its dairy market and 2.1 per cent of it chicken market. The new imports are expected to come mainly from the U.S., Australia and New Zealand.
Typical dairy farmers, who are heavily concentrated in Quebec and Ontario, stand to pocket $165,000 under the bailout package. Farmers in the so-called supply managed sectors – dairy, chicken and eggs – are currently not subsidized in Canada. But consumers typically pay prices that are higher than they are in much of the world.
Ottawa also announced that it will toughen up border controls to ensure that foreign countries don’t try to get around the massive tariff wall that protects Canada’s supply managed farm products. Officials insist that the “pillars” of the regime will remain in place even after the TPP goes into effect.
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