CETA not delivering for Canadian agri-food exporters

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Source: Canadian Cattlemen’s Association

The Canada and European Union (EU) Comprehensive Economic and Trade Agreement (CETA) came into force nearly two years ago and is one of Canada’s most ambitious trade initiatives. But the Canadian Agri-Food Trade Alliance (CAFTA) says CETA is not delivering for agri-food exporters.

In terms of overall agri-food trade with the EU, CAFTA highlights that since the entry into force of the agreement, EU exports to Canada have increased by over 10 per cent while Canadian agri-food exports have decreased by the same amount, increasing the trade deficit to $3.5 billion in favour of EU exporters. The EU market has the potential to result in significant benefits for agri-food exporters: the agreement could drive additional exports of $1.5 billion annually. And while increases are recorded for some grain exports to the EU from eastern Canada, overall durum wheat exports into Italy, one of Canada’s top grain exports to the EU, have been cut in half since the introduction of Italian mandatory country of origin labelling regulations.

On the beef side, while the Canadian industry has achieved gains of 66% in value and 104% in volume for beef exports to the EU for May 2019 YTD versus the same period last year, the volume of Canada’s beef exports to the EU remains far below the potential. Beef exports to the EU are gaining traction, growing from 340 tonnes in 2016 to 1,059 tonnes in 2018, with 653 tonnes reported in the first five months of 2019. However, EU beef exports to Canada have grown from 1,719 tonnes in 2016 to 3,237 tonnes in 2018, and 2,641 tonnes for the first five months of 2019.

In order to utilize the 65,000 tonnes of duty free access obtained under CETA the beef sector must be able to satisfy the regulatory requirements of the European Union in a sustainable manner. In that regard, the most immediate challenge is establishing a supply chain of EU eligible animals. Furthermore, the current EU restrictions around the use of antimicrobial interventions present significant obstacles. Exports could be significantly increased by investing in the live animal supply chain, beef processing infrastructure, as well as expanding the options to certify the growth enhancing product (GEP) free status of various categories of Canadian cattle.

CAFTA echoes that more work remains to be done so Canadian agri-food exporters can take full advantage of the agreement. Such work includes achieving mutual recognition of meat processing systems, developing protocols to verify livestock production practices, addressing misaligned regulation of crop protection products, more predictable and timely review of seed technologies and ensuring country of origin labelling requirements are not applied in a trade restrictive manner.

“Mechanisms within CETA were supposed to prevent non-tariff barriers from stifling trade and ensure that parties abide by their commitment,” says CAFTA President Dan Darling. “Instead, with non-tariff barriers still in place, viable commercial access remains elusive. It is time for Canadian and EU lawmakers to honour the deal negotiated and deliver on the outcomes promised.”

For more information see the CAFTA release.

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