Relief spread fast through Canadian farming’s export sectors late last week as news broke that Parliament had ratified the Asia Pacific trade deal and it had received royal assent.
It makes Canada the fifth country to officially join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which is a free trade deal involving 11 nations.
“It gives us a year advantage, a year to get into some of these markets, a big step inside the door,” said Jeff Nielsen, president of Grain Growers of Canada.
Gary Stordy, director of government and corporate affairs for the Canadian Pork Council, was also delighted by the news.
“This places Canada, and specifically hog producers, in a good position,” he said.
While expected, the passing of the legislation bringing Canada officially into the CPTPP relieved fears that something in the parliamentary process could prevent the agreement actually coming into force. Many legislative attempts to address agricultural issues have died before getting through Ottawa.
It also helped instil confidence that the international agreement will come into force. It has been a many-year process that saw the United States pull out after the original TPP deal was reached.
Canada’s agriculture exporters have heralded the deal for a number of reasons. Many are keen to protect Canada’s overseas markets and worried that being outside the CPTPP would see competitors steal sales.
Others wanted to end the advantages other traders, including Australia, have gained through bilateral deals.
And virtually all exporters are happy to have an advantage over the U.S., which will now face higher tariffs and restrictions than apply to countries within the CPTPP.
Stordy said there is great potential for Canada’s pork exports to Japan, currently valued at about $1 billion per year, to surge. Canadian pork prices can match the most competitive prices from places like Australia, and better tariff rates under the deal will allow Canada to ship different cuts of meat.
“This is an exciting time for the Canadian pork industry,” said Stordy, estimating that an additional $600 million per year was a reasonable hope for increased exports in coming years.
Nielsen said barley sales will benefit from the CPTPP, with Australia losing its tariff advantage.
“This is going to level the playing field,” said Nielsen.
Canada’s dairy industry wasn’t happy with the CPTPP. The government agreed to open an additional 3.25 percent of Canada’s heavily protected domestic market to agreement members. That adds to the pain that dairy farmers expect from the Canada-European Union deal, which is already in force, and from the new U.S.-Mexico-Canada Agreement, which is yet to be approved.
But for most of Western Canada’s farm sector the deal is seen as a blessing. Combined with the other two trade deals, Canada’s export-oriented farmers face a much brighter future.
“These are three major steps for Canadian agriculture,” said Nielsen.
“This is going to help us along the way, big time.”
Once a sixth country approves the deal, it will go into effect. Both Stordy and Nielsen said they expect to see it improve exports in 2019.
Stordy said Canada’s meat processors have already re-invested in their plants because of Canada’s export pork success, and this new access will likely encourage more investment.