Canada’s Supply Management Policy and TPP

An article in Business News Network (http://www.bnn.ca/News/2015/6/26/3-things-to-know-about-the-Trans-Pacific-Partnership.aspx) reports on the impact of the TransPacific Partnership (TPP) pact being negotiated between 12 countries on supply management approaches used for milk, cheese and eggs. Under supply management, the Canadian government controls the amount produced domestically and controls the volume of imports, in order to maintain supply and prices in Canada so that diary farmers livelihoods are maintained. Under TPP, these controls will need to be phased out, thus impacting prices for consumers (which would be expected to decrease) and profits for Canadian farmers (also expected to decrease). The Canadian government thus has to choose whether overall growth opportunities offered by TPP, which covers countries with 28 trillion dollars in GDP, is worth the protection of the diary industry.  How should the opportunities to export Canadian diary be balanced against the competition from other diary competitive countries such as New Zealand ? Should the Canadian diary industry create a local brand representing their produce to create a demand pull, subsidized by possible dislocation funds from the government ? Under what conditions would efforts to create stable local industries be justified as for the common good ?

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