Canadian Agri Food Trade Alliance

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Statement for the Standing Committee on International Trade on the Trans-Pacific Partnership Agreement (TPP)

 

CAFTA Statement on TPP to Trade House Committee – February 2016

February 25, 2016

• Thank you for inviting me today to speak on behalf of CAFTA, the voice of Canadian agriculture and agri-food exporters regarding the Trans-Pacific Partnership (TPP).

• CAFTA is a coalition of organizations that seek a more open and fair international trading environment for agriculture and agri-food. Our members represent farmers, producers, processors and exporters from the major trade dependent sectors including; the beef, pork, grains, oilseed, sugar, pulse, soy and malt sectors. Together, CAFTA members account for over 80 per cent of Canada’s agriculture and agri-food exports, about $50 billion dollars in exports annually and an economic activity that supports hundreds of thousand jobs in agriculture and food manufacturing.

• Canada has one of the most trade-dependent agricultural sectors in the world -we export over half of the agri-food products that we grow- 65% of which go to TPP markets.

CAFTA strongly supports the TPP and believe it is integral to the future viability of Canada’s export-oriented agriculture and agri-food sector. It is paramount that the TPP be ratified and implemented quickly. 

• CAFTA advocated for Canada’s participation in the TPP and for outcomes that level the playing field with our global competitors in the region and provide real benefits for Canada’s agriculture and agri-food exporters.

o The TPP region represents a market of 800 million people, absorbs 65% of our exports, includes some of our top trading partners (the US, Mexico, Japan) but also includes some of our largest competitors (the US, Mexico and Australia) – and some signatories already have FTAs with countries that we are after.

o Specifically, Japan is our 3rd priority export market and a premium market that demands $4 billion per year in Canadian agri-food products –about 10 per cent of Canada’s total agri-food exports.

o TPP countries also include fast growing emerging Pacific Rim countries such as Vietnam, Singapore and Malaysia.

• Additional access to the US, Japan, Vietnam and Malaysia appear to be the major market gains for Canadian agriculture and agri-food exporters. Under a ratified TPP, tariffs will be removed or phased out upon entry into force on a wide range of export oriented agricultural commodities in key markets.

Outcomes are significant for Canadian agriculture and agri-food exporters despite the US and Japan continuing to maintain restrictive tariffs and tariff rate quotas on sugar products.

• A sample of CAFTA members’ projections of the opportunities seen to be provided by the TPP include: o For canola, better trade security, more value for their products and increased exports by up to $780 million per year;

o For pork producers, preferential access ahead of non-TPP competitors, ability to compete in the billion dollar Japanese market where exports could climb by $300 million;

o Canadian beef producers expect to double or triple annual exports to Japan to nearly $300 million;

o Canadian barley producers could export an additional 400,000 to 500,000 tonnes of barley in various valued added forms worth about $100 million;

o The TPP will create new opportunities, provide a more secure trading environment, level the playing field in countries that have FTAs with members but not Canada and preserve current exports: this for 1.5 million tonnes of premium wheat exported to Japan, $2.3 billion dollars of grains and special crops to Japan, Malaysia and Singapore, $884 million dollar of soybean exports to TPP markets and $340 million dollars of pulse exports.

o As for Canada’s sugar and sugar-containing products sector, the TPP provides welcome, though small quota increases into the restricted US sugar market. The industry is analyzing the opportunities in Japan, Malaysia and Vietnam.

o Beyond tariffs, the TPP also sets a new Asia-Pacific framework for trade with rules to increase cooperation and transparency on non-tariff barriers related to sanitary and phytosanitary measures, biotechnology and plant health.

• We recognize that this agreement does more for some than others and will not eliminate trade barriers in the region but all members are united in supporting the TPP as a significant improvement on the status quo for all Canadian agri-food exporters and for our broader economy.

• Overall, o It preserves Canada’s privileged access to our number one trading partner- the US;

o It secures unprecedented access to the fast-growing Asia Pacific region;

o It provides an opportunity to maintain and enhance our competitive position in the region;

o It provides an opportunity to obtain more value from rapidly growing Asian-Pacific markets like Vietnam and Malaysia and high value markets such as Japan;

o It provides the opportunity to negotiate the terms of entry of potential future TPP countries such as South Korea, Taiwan, Thailand, the Philippines and others;

o Most importantly, the TPP puts us on an equal footing with our global competitors in the TPP region.

• Canadian agriculture cannot afford to relive the destructive experience of South Korea which saw a billion dollar market cut in half virtually overnight as our competitors, the US and Australia had their tariffs eliminated and we didn’t. Ultimately, if we are not part of the TPP and other signatories are, we fall behind. The best way to implement it quickly, is to ratify quickly.

The TPP will substantially increase opportunities for the hundreds of thousands of Canadian farmers, producers, processors and exporters who depend on trade and without such an agreement Canada would be ceding market share to other global competitors in the region. 

• In closing, we firmly believe that TPP provides the net national benefit to Canada that merits this agreement being implemented quickly.