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CCA Report: Trade, trade, trade

From the April 2018 issue of Canadian Cattlemen

I am pleased to report to you as president of the Canadian Cattlemen’s Association (CCA). As I take over the leadership of this organization from Dan Darling, who now serves as past president, I would like to express my sincere appreciation for his commitment to the CCA and the significant progress accomplished under his term. I will do my best to continue the momentum going forward with a focus on trade and environment and ensuring a sustainable future for beef production.

There is no shortage of work to be done on the trade front. A priority for the CCA is to ensure the timely ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). I was present in Santiago, Chile, for the CPTPP signing ceremony. It was quite something to witness International Trade Minister François-Philippe Champagne sign the agreement along with his counterparts from the other 10-member countries. This was a remarkable moment for Canadian beef producers; in fact, a game changer, as the CPTPP enables competitive access to Japan, Vietnam and other dynamic markets in the Asia-Pacific region, provided Canada implements the agreement quickly.

All that’s required for the agreement to come into force is for six of the 11 signatories to complete their domestic ratification procedures. CCA is advocating to the government that Canada must pass legislation quickly to be among the first six to ratify or we will be at a serious disadvantage. The race to ratification is already on — at a news conference following the signing ceremony, Mexico indicated it is slated to introduce a bill by April 30; Chile, Vietnam, Singapore and Malaysia indicated by year-end, a time frame that’s feasible also for Australia and New Zealand. Canada has said it will implement the CPTPP “expeditiously,” and Minister Champagne had previously pointed to the fall in terms of a timeline.

While in Chile, I impressed upon the minister the urgency for Canada to ratify the CPTPP or risk being left at the starter’s gate. There is plenty at stake; a recent analysis from the Government of Canada indicates that without the U.S., CPTPP is expected to increase Canadian beef exports by $380 million. This is a 90 per cent increase from the $200 million earlier estimated for the original Trans-Pacific Partnership (TPP), which included the U.S.

Once the CPTPP is implemented, Canadian beef will immediately be imported into Japan at the same preferential tariff as Australian beef. Fortunately, on April 1, Japan removed its 50 per cent safeguard tariff on frozen beef that had been in place since July 2017, but until CPTPP is implemented we are at risk of the safeguard being reinstated. With the CPTPP, Canada will be exempt from future applications of Japan’s beef safeguard tariff.

Importantly, in a time of growing anti-globalization sentiment internationally, CPTPP countries have demonstrated a commitment to deepening regional trade and integration. This will be the key to trade, as CPTPP members envision that additional countries could join the agreement.

Indeed, Korea, Indonesia, the Philippines and Thailand have already expressed various levels of interest in joining the CPTPP. Should Korea formally initiate negotiations to join the CPTPP, the CCA would insist that Canada seek acceleration of Korea’s beef tariff phaseout to match the U.S.’s access (under the 2013 U.S.-Korea FTA) as a condition of Korea’s entry. Under the terms of the 2014 Canada-Korea FTA, the 40 per cent Korean tariff on fresh and frozen beef will be fully eliminated in 15 equal annual steps, and the 18 per cent tariff on offals will be fully eliminated in 11 equal annual steps.

CCA representatives were in Mexico City for round seven of the North American Free Trade (NAFTA) renegotiation discussion, the latest in the series to modernize and renegotiate NAFTA. Subjects of concern to beef producers include tariffs, rules of origin, dispute settlement mechanisms, regulatory practices (both technical barriers and sanitary phyto-sanitary requirements), government procurement and review versus sunset for NAFTA. There has been good exploratory discussion amongst the negotiating teams and while other issues remain unresolved, common ground is being sought.

Overall, round seven had positive discussions and the hope is that progress will continue into round eight, to be held in the U.S. in early April. Of course, that timeline would extend the negotiations beyond the notional deadline of March 31. As we have seen time and again in previous negotiations, deadlines can come and go, but if progress is being made, the parties are likely to continue to meet with a view to reaching an agreement.

While the uncertainty around NAFTA is bound to continue, it’s important to focus on opportunity for Canada’s beef sector. The CPTPP is just the start; bringing the market access terms of the CPTPP into effect will mean more money in the pockets of farmers, and in turn the Canadian economy.

Of course, we also have potential to realize under the Canada-EU Comprehensive Economic and Trade agreement with Europe as well as massive potential in China. Resources for producers wanting to learn how their cattle can become EU eligible can be found on the CCA website.

Trade deals like the CPTPP benefit the entire Canadian agriculture sector and the economy, helping to secure a truly sustainable future for the beef industry.

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