Examples from the United States
D. A. Sumner
It is sometimes assumed, especially in Canada, that supply management policies require nontariff barriers in order to be effective. However, a supply management scheme has limited US tobacco output, without significant import protection, for more than half a century.
The US tobacco program used production quotas throughout the period during which the United States was the world's largest importer and exporter of tobacco. Ironically, in 1994 at the same time the United States was instituting a new policy of import protection, Australia was in the process of eliminating its own long-standing import barriers under pressure from the ban on nontariff import barriers contained in the Uruguay Round agricultural trade agreement (URA). Australia converted its domestic content rule to a tariff-rate quota for leaf tobacco and reformed its domestic supply management.
This chapter describes the supply management policies in the United States and Australia with respect to the tobacco industries. Particular emphasis is placed on how current policy changes relate to the URA in order to provide insights that may be applied in the context of Canadian supply management schemes.
Agricultural supply management policies differ by commodity and location but tend to have similar consequences and a similar basic design ( Alston, 1992). It may be instructive, therefore, in the context of a review of Canadian policy, to consider the operation, effects and recent reforms of supply