Ambassador Robert B

Ambassador Robert B. Zoellick

United States Trade Representative

600 17th Street, N.W.
Washington, DC 20508

Dear Ambassador Zoellick:

There is growing concern around the world that the promise of freer agriculture trade, gained during the Uruguay round of trade negotiations, will not be realized.

The continuation of large production and trade distorting subsidies in both the European Union and the United States is one of the principle contributors to this growing feeling of pessimism.

We firmly believe that production and trade distorting subsidies are harmful, in the long run, in the domestic market in which they exist. These subsidies stifle innovation, technological advancement, encourage production where it should not occur, and may harm the environment. We understand that you share this belief.

These subsidies are also extremely damaging to the agriculture sector outside of the subsidizing nations. This is true in Canada, it is true for the remaining members of the Cairns group, and it is true for the developing world.

The injury that trade and production distorting subsidies cause in third countries is not beneficial to the ongoing development of freer trade and economic growth. As Canada and the United States have clearly demonstrated through the Canada / US Trade agreement and the North American Trade Agreement, all citizens benefit from freer trade and its accompanying economic growth. We recognize that you share our conviction of the benefits from increased trade.

We are concerned that the proposed US farm bill indicates that the United States will be increasing its level of distorting subsidies, instead of beginning the necessary steps towards eliminations. We implore you to reconsider this course of action and ask that you bear in mind the damage to all aspects of ongoing trade negotiations that will result from failure on the agriculture front.

We are hopeful that the United States will join with us, and other members of the Cairns group, and begin the reduction of trade and production distorting agriculture subsidies.

We would also like to bring to your attention a proposal for a bilateral agreement that could ease trade tensions between our two countries. As you are aware, agriculture has frequently produced some of the most contentious trade disputes between Canada and the United States. These disputes have inflicted long term damage on the earning potential of farm families on both sides of the border.

We believe that this cycle of agriculture trade action must come to an end. In order for this to occur politicians from our two countries must show leadership and embrace real reform.

We have felt for sometime there needs to be a process to solve agriculture trade irritants before they become full-blown challenges. We are forwarding to you a draft outline of a proposal for a Canada/United States Rapid Response Process for agriculture trade disputes. We believe that the establishment of the Rapid Response Process would help accomplish our common goal of frictionless agriculture trade between the United States and Canada.

We are looking forward to your response to this outline. Furthermore, we are looking forward to working together with you to push these ideas onto the national agenda in both the United States as well as Canada.

Please do not hesitate to contact us if you have any comments, questions, or suggestions for ways in moving these initiatives forward.