Rules that would give Canadian malt barley preferential access to the Japanese market should be a key accomplishment of any Canada-Japan trade deal, a malt industry leader has told MPs.
Phil De Kemp, president of the Malting Industry Association of Canada, told the House of Commons international trade committee that Japan is a key market for Canadian malt barley, buying a quarter of Canada’s exports.
But the lack of a trade deal could give competitor countries better access and an advantage, he said.
“It is our hope that as negotiations unfold, preferential access for Canadian malt can be made a priority and managed in such a way so as to recognize some of the domestic constraints that are currently faced by the domestic brewing industry in Japan,” said De Kemp.
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He said Canada’s malting industry is “experiencing difficult times competing and maximizing capacity utilization in today’s highly competitive global marketplace.”
The trade committee has been studying the potential benefits of a Canada-Japan free trade deal although negotiations have not yet started, although an agreement to launch talks has been made.
De Kemp said an issue in the Japanese market is high tariffs and while Canada does not yet have a deal, other countries are negotiating bilateral trade deals in Asia and many are involved in Trans-Pacific Partnership trade talks that Canada has not yet been invited to join.
Canada’s malt barley industry, the second largest world exporter, could be hurt by exclusion from deals, he said.
“Japan is a highly respected and valued customer to us,” he said. “It is an extremely important and critical market for our Canadian malting plants. Our malt exports drive value on all barley exports.”
It was the same message to MPs from Canadian Honey Council vice-chair Lee Townsend, who told MPs that the largely prairie-based honey industry sees Japan as a growth market.
Sales rose to almost $10 million in 2010 and there is a potential for much more but a 25.5 percent tariff restricts access.
Competitors like China and Argentina also face high tariffs but costs to get their product into the Japanese market are much less.
“While removal of this tariff won’t cause sales as well as profits to increase overnight, it will offer our producers more opportunities for expansion within the Japanese market,” said Townsend.
Canadian honey, while high end on the price scale, is valued in Japan, he said.
If the tariff disadvantage could be eliminated, he predicted a doubling of Canadian sales to Japan within five to 10 years.
