The new TPP good for Canadian ag, according to FCC

WINNIPEG, Jan. 30 (CNS) – The future of trade for the Canadian
agriculture industry is looking bright with the recent announcement of
the new Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).
According to Farm Credit Canada (FCC), any time Canada can get less
restricted access to markets it is good for agriculture.

“We can open up markets more to what we have, especially when we have
big competitors like the United States who stay out of it. I think it’s
a good thing,” said J.P. Gervais, chief agriculture economist with FCC.

Since the beginning of the trade agreement negotiations CPTPP has
changed. Originally it was known as the Trans-Pacific Partnership (TPP)
and had 12 members which dropped to 11 following the withdrawal of the
U.S. after Donald Trump was elected. In late January the 11 remaining
nations, including Canada, agreed to sign the revised trade agreement
officially in March.

The official details of the revised trade agreement haven’t been
released yet, but it is expected to be similar to previous versions. The
agreement will see tariffs reduced on Canadian pork, beef and wheat to
Japan and other markets, in some cases eliminating duties altogether.

From the previous known details Gervais believes the deal will be good
overall for Canadian agriculture. The pork industry is poised to benefit
from the new access to Japan, which is currently one of the industry’s
most important markets.

“To lower (the Japan import) tax right away … that’s a pretty good
benefit for us. It should make it easier for us to capture market share

in Japan given that the U.S. is our biggest competitor when it comes to
fresh and chilled pork exports,” he said.

There are opportunities to grow exports to other CPTPP countries, but
Canada will have to work to groom these relationships. It will take work
to convince buyers to switch to purchasing Canadian products, according
to Gervais.

“(CPTPP is) just opening up, lowering these barriers and (allowing us)
to steal a bit of market share from other countries, other suppliers
that don’t have the same access … it’s not going to happen overnight,
we’re going to have to make an effort to develop those relationships,”
he said.

The trade agreement as well has the potential to change current trade
patterns within CPTPP members. Previously Australia (a CPTPP member) had
preferential access to the Japanese market through a previous trade
deal, but Canada will now receive the same access.

“To me that’s significant enough to change the trade flows. Now to what

extent, it’s going to take a bit of time to get a bit of work to
actually come up with some numbers. But there’s millions of dollars of
exports at stake here for sure,” Gervais said.

One agriculture sector which has been displeased by the trade deal has
been the dairy industry. Under the trade agreement CPTPP members will be
able to import an amount equal to 3.24 per cent of Canada’s current
annual milk production. If dairy imports from CPTPP countries reach that
level it could make for a C$246 million loss annually to Canada’s dairy
sector.

Gervais, however, doesn’t see it as completely bad for the dairy
industry. The dairy industry has grown domestically over the last few
years, with cheese, butter and yogurt consumption increasing.

“I think that’s a real positive story, so I am pretty confident that the
dairy industry will be able to thrive despite maybe a little bit more
competition coming in to Canada,” he said.

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