Regulation and Protectionism under GATT: Case Studies in North American Agriculture

By Andrew Schmitz; Garth Coffin et al. | Go to book overview

19
Will the Supply Management
Cartel Stand?

T. G. Schmitz and Skinner


Abstract

This chapter analyzes the economic implications of a major production increase by Ontario chicken producers on the Canadian broiler industry. An economic, spatial oligopoly model of Canada is developed that estimates trade flows and the economic benefits accruing to provincial producers as well as to consumers. The model shows that a major increase in the supply of broilers from Ontario would cause economic losses to accrue to producers in all provinces if the current supply management system remains intact. On the other hand, this policy could force retaliatory action on the part of other provinces that would cause a breakup of the national supply management cartel. Under a new regime in which marketing boards from each individual province compete with each other for a share of the Canadian market, Ontario producers could accrue additional economic benefits if they could act as a leader in the industry. In this scenario, producers in the prairie provinces would also accrue economic benefits while producers in British Columbia, Québec and the Maritime provinces would suffer losses.


Introduction

The elimination of Article XI of the General Agreement on Tariffs and Trade (GATT) and the replacement of nontrade barriers with tariff-rate quotas 1 has caused concern for the future of supply management. However, as Schmitz, de Gorter and Schmitz ( 1996) discuss elsewhere in this volume, Canadian supply-managed industries will not face legal repercussions from international players in the industry in the near future because of the minimum access rule under the new GATT agreement. The

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Regulation and Protectionism under GATT: Case Studies in North American Agriculture
Table of contents

Table of contents

  • Title Page iii
  • Contents v
  • Acknowledgments vii
  • About the Editors and Contributors ix
  • Section One - Overview of the Effects of Gatt 1
  • 1 - Itroduction: Trade and Regulations in Transition 3
  • References 18
  • 2 - Post-Gatt Assessment of the World Marketplace 20
  • Notes 35
  • 3 - Consequences of Tariffication 37
  • References 50
  • 4 - Supply Management Under Minimum Import Access Requirements 51
  • Notes 62
  • References 62
  • 5 - Imports into Canada: Why Have They Remained Low? 64
  • Notes 76
  • References 77
  • Section Two - Case Studies of Gatt's Effects 79
  • 6 - Regulation -- the Us Dairy Industry 81
  • References 94
  • 7 - Cost Competitiveness in the Canadian and Us Dairy Industries 96
  • Notes 115
  • References 116
  • 8 - Supply Management and Vertical Coordination: the Role of Cooperatives 118
  • Notes 126
  • References 127
  • 9 - Value-Added Economic Potential 128
  • Notes 145
  • References 146
  • 10 - Tobacco Supply Management: Examples from the United States and Australia 147
  • References 158
  • 11 - Gatt and the Us Peanut Market 160
  • Notes 178
  • References 179
  • 12 - The Us Sugar Industry: the Free Trade Debate 180
  • Notes 199
  • References 201
  • Section Three - Regulation and Supply Management 203
  • 13 - Supply Management Canadian Style 205
  • Notes 221
  • References 223
  • 14 - Power Relationships in the Political Process 226
  • Notes 241
  • References 244
  • 15 - Provincialism: Problems for the Regulators and the Regulated 245
  • References 267
  • 16 - Provmcial Versus Centralized Pricing: Protectionism and Institutional Design 269
  • References 283
  • 17 - Venturing into the Political Market 284
  • Notes 296
  • 18 - Vertical and Horizontal Coordination 299
  • Notes 312
  • References 313
  • 19 - Will the Supply Management Cartel Stand? 314
  • Notes 330
  • References 330
  • About the Book 332
  • Index 333
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