barriers into the United States and it is uncertain what portion of the EU market is available. Firms pursuing a niche marketing strategy into the United States, however, may be constrained by the Canadian system. If these firms want to import US raw product, process it to the specifications demanded by buyers in that niche market and then reexport it to the United States, there may continue to be bureaucratic obstacles to developing the US portion of a niche market that exists in North America. In the past, such problems have existed for firms producing further processed poultry products such as seasoned and tipped chicken wings and chicken that is produced entirely with organic inputs and processes ( McKay, 1993).
Another problem facing Canada's supply-managed industries has to do with the regulations put into place at the inception of these programs that carved the domestic market into provincial production shares. These provincial shares proved politically impossible to change and resulted in higher-cost structures and lower-than-optimum processing-plant volumes, even with raw product output controls. These regulations make it more difficult for a firm to follow a "scope" strategy that is facilitated by a large supply of raw product from which market niches can be served. While it seems clear that the provincial market share regulations will be difficult to enforce in the post-Article XI trade environment, it will take several years for national production and processing patterns to be rationalized.
For the dairy industry, the obstacle to accessing the EU and US markets may well be the proportion of quota that will be locked into traditional exporters over the next six years. For example, it appears that Canada's cheese firms, at best, will obtain a proportional increase in their approximate 11% of US import quota from 1995 to 2001. There is also mounting anecdotal evidence that Australia, New Zealand and certain EU countries have locked in significant shares of tariff-rate quota for other products, as well as other countries.
Lack of access to the US and EU markets, as well as the need to develop better knowledge of markets with more demanding consumers and improve marketing abilities, suggests that multinational organizations, strategic alliances or joint ventures between Canadian firms and counterparts in these markets should be seriously considered. Three decades of supply management may well have destroyed our ability to "go it alone" in the twenty-first century.