After four years of negotiation, Canada and the European Union announced a comprehensive trade deal today that could increase the value of Canadian agricultural exports by more than $1 billion annually.
Beef and pork sectors expect to be the main beneficiaries with $1 billion or more of increased sales.
The Canadian Agri-Food Trade Alliance estimates the total value in increased trade could be as high as $1.5 billion.
The deal, once it takes effect after ratification by both sides, also will eliminate tariffs on wheat and oilseed exports as well as processed food. The Canola Council of Canada estimates a doubling of sales to the European biodiesel industry, potentially $90 million worth of additional sales.
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In return, Canada agreed to eliminate most tariffs on imports of more than $4 billion worth of European food, wine and spirits and to respect European geographical indicators in product branding.
The deal, signed in principle by prime minister Stephen Harper during a trip to Brussels for the announcement, also will double the potential for European cheese sales into Canada, adding up to 17,000 tonnes to imports.
Dairy Farmers of Canada vows to fight the deal, arguing it will hurt dairy farmers and put some Canadian cheese manufacturers out of business.
The Canadian Federation of Agriculture accused the government of abandoning its “balanced position” of promoting exports while protecting supply management and demanded that the government cover any damage to the dairy sector and make sure there is no further market erosion in future.
In fact, the government is promising to monitor the impact of the deal on dairy farmers and to pay compensation if there is damage to sector revenues. Details of how compensation would be paid and to whom remain vague.
The government argues that growing Canadian cheese consumption will more than cover the increased imports by the time the deal takes effect, expected in two years.
“This trade agreement is an historic win for Canada,” Harper said in a statement when the deal was announced. “It represents thousands of new jobs for Canadians and a half-billion new customers for Canadian businesses.”
During his remarks in Brussels, Harper said Canadian farmers will be big winners. “Canadian farmers will benefit overwhelmingly from this agreement.”
He said even the supply management system is a winner, since it is preserved and recognized within the largest trade agreement Canada has ever signed.
“It is important to say this is a major gain for them.”
He promised compensation for any dairy losses because of the increase in cheese imports but predicted any damage will be short-term.
He said Ontario and Quebec governments have signaled support for the deal and the compensation plan.
In Ottawa, meat and canola sector representatives lined up at a government-organized briefing on the Canada-EU trade deal to sing its praises.
Suzanne Sabourin, director of regulatory and international trade issues for the Canadian Meat Council, said that once implemented, the deal will offer access for 65,000 tonnes of beef, 81,000 tonnes of pork and three tonnes of bison.
“We believe this is a significant agreement,” she said. “When the deal is fully implemented, we believe that represents a potential of around $1 billion in access for our beef, pork and bison producers across Canada.”
