The National Pork Producers Council (NPPC) is requesting that Canada suspend its hog subsidy programs before entering the Trans-Pacific Partnership (TPP) trade talks.
NPPC pointed out if similar programs existed in the United States, production would more than double in 10 years and critically impact the Canadian hog market.
Taking the Quebec subsidy program, Iowa State University economist Dermot Hayes estimated that a similar program in the United States would increase pork production by 8.4% annually. Over 10 years that would add 140 million market hogs, compared to current levels of about 110 million hogs marketed annually in the United States.
“The Canadian subsidy programs distort the North American hog and pork market, limiting the growth of U.S. production, employment and profitability,” says Doug Wolf, NPPC’s immediate past president and chairman of its trade committee. “Canada’s entry into the TPP negotiations should be contingent on renunciation of its trade-distorting subsidies.”
Ontario’s Risk Management Program over five years would boost Canadian hog production by more than 606,000 hogs, and cut U.S. pork production by more than 430,000 hogs worth more than $73 million and cost nearly 600 U.S. pork industry jobs.
In response, Canada says the U.S. mandatory country-of-origin labeling (MCOOL) law violates U.S. trade obligations according to the World Trade Organization (WTO). The U.S. pork industry did not support MCOOL, and NPPC is urging the United States to comply with the WTO ruling on the U.S. appeal of the earlier decision.
“You can’t argue that MCOOL distorts the hog markets, then ignore the far greater impact of the Canadian subsidy programs,” Wolf says.
The TPP is an Asia-Pacific regional trade agreement that currently includes the United States.