Canada and the European Union have agreed to launch comprehensive free trade negotiations that advocates say could open up $1.25 billion worth of new agricultural markets for Canadian exporters by 2014.
The processed food industry could benefit from $2.2 billion in new sales opportunities when the deal is fully implemented, according to an analysis by European and Canadian officials who met before the May 6 announcement to negotiate the scope of the negotiations.
But according to the terms of reference agreed upon for the negotiations, Canada also will have to defend supply management over-quota tariffs and its right to operate state trading enterprises such as the Canadian Wheat Board because both are on the table.
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“No tariff line should be excluded a priori,” said a joint report from Canada and the EU.
On the STE issue that the EU has been pursuing at World Trade Organization talks to try to end the CWB export monopoly, the negotiating framework says: “The Scoping Group recognized that any agreement should address the issues of agriculture export subsidies and state trading enterprises and assess any possible distortion of competition and barriers to trade and investment these issues could create.”
For Canadian Federation of Agriculture president Laurent Pellerin, inclusion of those issues raises a red flag.
“We are more than happy to see bilateral talks with Europe because there are potentially some good markets for us,” he said May 11 from his Quebec farm. “But we have to watch those two issues closely.”
Pellerin said the goal should be to reduce tariffs as much as possible but exclude supply management protections from the talks. And the Conservatives, despite their opposition to the CWB single desk, should stick to their position that the marketing debate will be decided in Canada and not in trade negotiations.
“These are domestic laws that should not be up for bargaining in trade negotiations,” he said.
Steve Verheul, Canada’s longtime chief WTO agriculture negotiator, has been named the chief Canadian negotiator in talks with the EU. He goes into the negotiations understanding the domestic political sensitivities of those two issues that the Europeans want included in the bargaining.
Canadian agricultural exporter groups were enthusiastic about the launch of the talks that could start later this summer. The EU already is Canada’s second largest customer.
In a May 11 news release, Grain Growers of Canada president Doug Robertson noted that the 500 million person European market offers an opportunity for increased sales of grain, oilseed, pulse and processed food products.
“Tariffs are only one piece of the puzzle though and so we are pleased to see negotiations will also include technical trade barriers, customs procedures and other measures which affect trade.”
Kathleen Sullivan, executive director of the Canadian Agri-Food Trade Alliance, said May 11 CAFTA wants the federal government to include in negotiations such non-tariff EU trade restrictions as a reluctance to import genetically modified grain and oilseeds or hormone-treated meat.
“We think there is a real opportunity for greater access for oilseeds and livestock but of course, that will require dealing with these barriers that we think are not justified,” she said.
Pellerin concurred. The pork producer said in addition to cattle treated with hormones, the EU also has restrictions on import of pork from pigs treated with legal drugs in Canada.
“Overall, we ask the Canadian government to make sure that rules about getting product into the EU are based on science and not on feelings,” he said.
While many agricultural groups applauded the launch of Canada-EU free trade talks, the anti-free trade lobby Council of Canadians warned that it could be a disaster for Canada.
CoC trade campaigner Stuart Trew said in a news release that the government should consult more widely than just with export sectors that hope to benefit.
“This new free trade agreement came out of nowhere,” he said. “Canadians only found out late last year in media reports that a Canada-EU free trade agreement would dwarf NAFTA (North American Free Trade Agreement) in scope by further liberalizing trade and investment in the name of boosting corporate profits while further limiting the policy-making space of Canada’s cities and provinces.”
