Current Agriculture, Food & Resource Issues
D. Surprenant and J.-P. Gervais
based upon historical market shares and licences administered by producers’ groups. The
intent is to test the hypothesis that firms requesting greater market access to foreign
chicken products would support market-based licence allocation methods in a greater
proportion than firms demanding more protection than what is currently in place. Among
importers who support more protectionist policies, 88.9 percent desire to have the import
licence allocation made according to some discretionary method. Of those importers who
prefer a more liberalized environment, 55.3 percent wish to have the government adopt
less discretionary administration methods to allocate import licences. These differences of
opinion are statistically significant at the 99 percent confidence level.
It is also interesting to investigate the preferences of importers based on their
geographical locations. Importing firms located in Quebec tend to be more protectionist
than importers located elsewhere in the country; 85.4 percent of those in Quebec support a
protectionist policy while support for a protectionist policy falls to 52.1 percent among
firms located elsewhere. Moreover, there exists a significant difference between
importers’ preferred licence administration procedures, depending on the location of their
business. Of the importers located in Quebec, 89.7 percent prefer the licence
administration methods classified as discretionary while 70.4 percent of importers located
in other provinces prefer discretionary methods. This difference is significant at the
95 percent confidence level. The degree of overall satisfaction with the current TRQ
system also differs significantly between importing firms in Quebec and importers located
elsewhere. Importing firms located in Quebec are clearly satisfied with the current
administration method in a larger proportion than firms located elsewhere (87.5 percent
relative to 52.9 percent).
Surprisingly, no statistically significant relationships between the category of
importing firm and the reported answers to the questionnaire were identified. This is
rather surprising since import licence allocation shares differ according to the firms’
sectors of activity. The rents captured by each importing firm should differ across their
sector of operations because their valuation of import permits is directly a function of the
difference between the domestic price and the world price. Moreover, different TRQ
administration procedures can affect the market levels of the industry in different ways
depending on the degree of discretion associated with the procedures. This could have led
to important differences in the rents importers obtain from the TRQ system. These
surmises could not be validated by the survey.7
Concluding Remarks
This paper evaluated Canadian chicken importers’ preferences towards TRQ import
licensing mechanisms. Are there any lessons from the analysis of the survey that can
inform attempts to reform the TRQ administration procedures at the WTO? Any
quantitative trade restriction is likely to bring forward divergent private interests in an
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