Early assessments of the Trans-Pacific Partnership text show dairy imports into Canada could be higher than expected.
However, stakeholders say they need more time to examine the details.
The text was made public Nov. 5, a month after the trade agreement covering 40 percent of the world’s gross domestic product and 800 million people was signed in Atlanta. At more than 6,000 pages, there is a lot to assess.
As expected, Canadian exporters of beef, pork and canola will enjoy significantly reduced or eliminated tariffs for their products going into the 11 signatory countries.
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“What jumps out to me is that Vietnam and Japan will be reducing what are very high tariffs on meat, beef, pork,” said Trevor Tombe, assistant professor of economics at the University of Calgary.
“Japan currently has a 38.5 percent tariff on beef, and that’s going to fall to nine percent. It will effectively make Canadian beef 20 percent cheaper in the Japanese market.”
In Vietnam, the 34 percent tariff will drop to zero.
Similarly, Canadian exporters will have greater access for grain and oilseeds. For example, feed grain will gain duty-free access into Japan, and quotas will increase to all TPP countries, Tombe said.
The Canadian Agri-Food Trade Alliance said its members are reviewing specifics and “what tariff rate quotas, rules of origin, reduction of tariffs and non-tariff barriers mean for their respective sectors.”
“At first glance, outcomes for agri-food exports appear significant,” said executive director Claire Citeau.
The supply management provisions of the deal are trickier.
Sylvain Charlebois, a professor at the University of Guelph’s Food Institute, said he was surprised there is no dedicated agricultural chapter in the text.
“I had to work very hard to find anything related to agriculture,” he said.
Instead, those items can be found in the appendices and attachments to the deal.
And that’s where he was surprised.
“I first looked at eggs and poultry, and the numbers seemed consistent to what was reported during the election,” he said.
“When I got to dairy, though, I was a bit perplexed. There are 12 or 13 different categories.”
Charlebois said he wasn’t aware the tariff schedule would include processed products such as yogurt and cheese in addition to fluid milk.
Tombe concurred, saying there appears to have been a misunderstanding when the government first said market access would be 3.25 percent for milk.
“The conversion ratio on milk is very different than just fluid milk,” Charlebois said.
“For example if you allow one litre of fluid milk into the country, it’s one litre of milk, but if you allow one kilo of cheese, it takes eight litres of milk to produce one kilo of mozzarella. The way it is presented it is very confusing as to how they came up with the 3.25 percent.”
He said imports will be closer to four percent.
As well, cheese imports will be substantially more than what is allowed under the Comprehensive Economic and Trade Agreement with Europe, he added.
Dairy Farmers of Canada said the impact of the TPP depends on the butterfat content of products entering Canada, and the government did indeed use the 3.25 percent figure.
“With an additional understanding of the method used by government to arrive at this estimate, DFC estimates that the impact will amount to between 3.4 percent and four percent of the 2016 production forecast, and the associated revenue loss to amount to between $190 million and $246 million a year,” said spokesperson Isabelle Bouchard.
“We will continue our analysis based on the newly available texts.”
Tombe said most of the increased quotas will be phased in over five or six years, but it will take 19 years to fully phase in some of the additional dairy quota.
