Canadian producers celebrate TPP signing

Farmers will see real gains from the Trans-Pacific Partnership, said a happy and relieved Canola Council of Canada vice-president Feb. 3, the day the deal was signed.

It was a sentiment shared by multiple Canadian farm sectors that produce commodities that are exported, and by food producers who ship goods outside of Canada’s tiny domestic market.

“This means a lot, particularly for canola,” said Brian Innes, who was in Auckland, New Zealand, for the inking of the trade deal.

The TPP still has a long way to go before it actually becomes a binding deal, and it may never make it. There are still two years of ratification ahead, in which countries like Japan and the United States have to give the TPP legislative approval for it to become real.

Each of the 12 nations in the deal has internal politics swirling around the TPP, and it is an issue being raised in the 2016 U.S. presidential and congressional races.

Canada signed the deal, but it still needs to be approved by Parliament.

Many Canadian dairy producers are upset by the deal and the small import increases agreed to, saying that the stagnant domestic market and the increasing imports already of non-fat milk products will crimp the industry’s ability to grow or be viable.

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But most of Canada farm and processing sectors have lobbied hard for the TPP, relying on world markets for much, most or almost all of their sales.

The Canadian Meat Council said it “vigorously supports” the TPP, which is “of crucial importance to the sustainability of this country’s livestock and meat sector as well as to the thousands of rural and urban communities and tens of thousands of workers and families whose prospects for the future are dependant upon it.”

The signing was also lauded by the Canadian Agra-Food Trade Alliance, of which Innes is president.

While all exporting sectors of Canadian farming and food should benefit from the deal, Innes said, canola will be particularly helped in key markets like Japan, where differential tariffs have hurt exports of canola oil.

Canadian exports to Japan have been dominated by raw seed exports, as opposed to oil and meal exports, because the tariff regime discriminates against oil and meal. That restricts the opportunities for the Canadian crushing industry.

The Canadian pork industry could also be a major beneficiary of the TPP, with Japan already a high value market but set to become more of one once tariffs are lowered and removed.

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For both pork and canola, and the farmers who produce the crops and livestock, the gains could be worth hundreds of millions of dollars per year in greater demand and higher prices, industry leaders say.

The deal also creates systems that proponents hope will de-politicize disputes with better rules for dealing with phytosanitary and technical issues.

And having Canada inside the tent at the beginning of the deal helps establish rules for future expansions of TPP or separate agreements with countries like China that Canada can live with.

The TPP region includes markets already critical to Canada’s farm exports, such as the U.S. and Japan. It also includes developing countries that have increasing wealth and ability to buy Canadian exports, such as Malaysia and Vietnam.

To become operative, the deal must be ratified by at least six of the deal’s 12 members, representing 85 percent of the bloc’s population.

Contact ed.white@producer.com

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  • Very interesting. As I understand it, some Canadian business will benefit and some will not. The net effect is allegedly positive for Canada, but we will have to wait and see for sure. One thing is certain, the larger corporations will benefit and hopefully the rest of us will too. However, the “intellectual” laws being pursued are completely bogus. Share that video of your kid on YouTube with her Frozen dolls and wait for Disney to sue you.

  • ed

    Any trade agreement should be a win-win situation at worst. The trouble with the winners and losers scenarios is that the win parts get smaller and the lose parts get bigger as soon as the clock starts ticking. Dispute mechanisms are cumbersome if not non existent in real terms, so the pain goes on forever until portion of the ag sector die. It always works this way. It is about selling off the industry for free, invisibly over a long period of time with free labor to boot during the process. That’s all it is.