Grain, oilseed sectors cheer

Canola industry says improved access to Japan will mean $780 million in increased exports

Farmers, processors and exporters in Canada’s grains and oilseeds sector could see huge financial benefits — potentially worth more than a billion dollars a year — from the implementation of Trans-Pacific Partnership deal, say TPP supporters.

But implementation of the deal could take as long as two years and many of the trade benefits stemming from the deal may not be immediate and could take years to be fully realized.

On Oct. 5, Canadian trade negotiators announced that a TPP deal had been reached after a week of negotiations in Atlanta, Georgia.

Details of the deal are still being disseminated but stakeholders in Canada’s grain and oilseeds sector were quick to applaud the pact, which will remove tariffs and address non-tariff barriers on a variety of agricultural goods including canola, canola oil, canola meal, wheat, barley, pulses, fruits, wines and processed food products.

In the grain and oilseeds sector, Canadian canola producers and processors stand to make considerable gains, particularly in Japan, Vietnam and Malaysia.

Japanese tariffs of 13.2 yuan (C$2.72) per kilogram on imports of refined and crude canola oil from Canada will be eliminated within five years of implementation, as will Vietnamese tariffs of five percent on the specified canola products.

“This is a great deal for the canola industry,” said Brian Innes, vice-president of government relations with the Canola Council of Canada.

“Improved access to Japan alone will mean up to $780 million in increased exports or the canola industry.

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“For canola growers, this means more value comes to Canada and for canola processors, it means more opportunities to sell canola oil to Japan.”

Innes said the removal of Asian tariffs on canola oil and canola meal will deliver significant benefits to the Canadian crushing industry as well as the 14 communities where large scale crushing facilities are located.

The deal also includes commitments from some of Canada’s key Pacific Rim trade partners to reduce non-tariff trade barriers related to sanitary and phytosanitary restrictions, as well as agricultural biotechnology, specifically the approval and trade of genetically modified crops and products containing GMOs.

Benefits for the Canadian cereal grains sector, specifically the wheat and barley industries, were still being assessed a few hours after the deal was announced.

Among other things, Japanese tariffs and import quotas that are currently applied to Canadian feed wheat and feed barley will be removed immediately upon implementation of the deal, which is expected sometime in 2017.

In addition, Japanese price markups on Canadian food wheat, food wheat products and food barley will be reduced by 45 percent within eight years of implementation.

A Canada-specific quota will be applied to Japanese imports of Canadian food wheat products but details of that quota were not specified.

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For the Canadian barley industry, the TPP deal has the potential to boost exports of barley and barley products by as much as 150,000 tonnes or $80 million a year, according to the Barley Council of Canada.

Improved market access for Canadian beef and pork would also significantly increase domestic demand for feed barley, the organization added.

“For the barley industry and our members, the TPP is a big deal, and one that we need, “ said the council’s executive director Phil de Kemp.

“Over 50 percent of our exports of barley and value added products currently are marketed into TPP countries, so any deal that does not include Canada will be devastating for our entire barley value chain.”

Cam Dahl, president of Cereals Canada, said it is premature to estimate the total financial benefits that the deal could deliver to Canada’s cereal grains industry.

Nonetheless, the deal is critically important to Canada, he said.

“I think for agriculture in general, this is very, very good news,” Dahl said. “We’re an export dependent industry and to have this kind of an agreement with 40 percent of the world’s economy is absolutely critically important… “If we had been left out of this deal, we would have been ceding some of our best markets like Japan to our competitors in the United States and Australia and we would have been ceding the potential in some of those key Asian growth markets to our competitors. That wouldn’t have been acceptable.”

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Contact brian.cross@producer.com