On the eve of the Montreal round of NAFTA negotiations, farm and food industry groups issued a call to the federal government to not put all of Canada’s eggs in one basket and sign the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) as soon as possible.
The Canadian Pork Council (CPC), the Canadian Cattlemen’s Association (CCA), the Canadian Meat Council (CMC) and the Canadian Agri-Food Trade Alliance (CAFTA) all said the CPTPP must not be overlooked or neglected if Canada is to achieve the $75 billion export goal laid out in Budget 2017.
Prime Minister Justin Trudeau wouldn’t sign the proposed deal at a meeting of Pacific countries in Vietnam late last year because there were areas that needed further development. Agreement was struck on trying to convert the unendorsed Pacific trade pact into the CPTPP.
The government hasn’t provided any information on discussions or negotiating sessions on it held since then although Trudeau is understood to have discussed it with several of the Pacific leaders.
CPC Chairman Rick Bergmann said that every time a trade deal is signed without Canada’s participation, there is a negative impact on the pork sector. “The failure to sign the CPTPP would result in huge losses to the hog sector leading to pork producers leaving their farms, and closures of processors and exporters.”
Canada was in a similar position several years ago when the United States, the European Union and other major competitors secured free trade deals with South Korea ahead of Canada, he said. “The Canadian pork sector lost its traditional market share in Korea almost immediately and saw pork exports to that country fall by 67 per cent within just two years. The Canadian pork market in Japan is much larger than South Korea. The CPTPP is vital to the pork industry.”
Canadian pork exports were worth close to $4 billion in 2017 making Canada the No. 3 exporter. “The number of countries to which Canada export has climbed from 50 in 1990, to 140 in 2017. Also, contrary to many other Canadian economic sectors, the pork industry has become less dependent upon the United States for export sales. For example, in 1990, the U.S. accounted for 75% of Canadian pork exports, while in 2017, only 29% of pork products went to the U.S.”
The CCA said is strongly signaling that it wants to move forward quickly with the CPTPP. “This will be an extremely positive development for Canada’s entire beef sector, if Canada chooses to be part of the agreement.
“If Canada accepts Japan’s proposal to be one of 11 countries signing on to the CPTPP, then we will immediately enjoy the same preferential tariff as Australian beef, as will New Zealand and Mexico,” it said. “The U.S. will not be part of the agreement and will remain at a much higher tariff.”
If Canada passes up the deal, it appears likely that Japan and nine other countries “will proceed without us. This outcome would leave Canada at a widening disadvantage to Australia, and also falling behind our competitors in New Zealand and Mexico as they gain the same access as Australia.
“Should Canada sign the CPTPP, upon enactment, we will immediately see Japan’s beef tariffs drop to the Australian level of 27 per cent, which is an 11 per cent advantage over the United States and other competitors. This is among the many trade advantages Canada could look forward to, as a signatory of the partnership.”
Meat Council President Chris White projected that signing the CPTPP “would increase beef and pork sales by at least $500 million, creating the potential to support an additional 5,800 jobs.”
Left out of CPTPP, Canada would be “tariffed-out” of Japan, a $1.2 billion market for Canadian meat exports, White said. “A deal without Canada could spell disaster for the Canadian meat industry as well as for other exporting industries. “Regional economic impacts associated with the red meat products supply chain are largest in central Canada with real GDP impacts of $4.3 billion in Ontario, and nearly $3.0 billion in Quebec,” he said.
“CPTPP is good for Canadian exporters and the broader Canadian economy. Failure to participate would jeopardize thousands of jobs across the Canadian economy and would forfeit competitiveness in existing and emerging Pacific markets to foreign exporters, particularly those included in a CPTPP without Canada.”
CAFTA President Brian Innes said failing to sign the deal “would put billions of dollars in farm and food exports at risk, limit opportunity for growth and affect the livelihoods of nearly a million Canadians.
“Treading water doesn’t move us forward in the Asia-Pacific,” he said. “Agrifood exporters need the CPTPP. The EU, Australia and Chile have already secured deals with Japan, which imports about $4 billion in Canadian agrifood products annually.”
Innes said that while the automotive sector and softwood lumber are taking up a lot of attention, what’s getting lost is that more than 90 per cent of Canadian farmers depend on world markets and the agrifood industry supports close to a million jobs in communities of all sizes.
Carla Ventin, Vice-President of Food & Consumer Products Canada, said processors see growing opportunity in Asia. “It will be a lost opportunity for value-added growth if we do not implement the CPTPP.”