Canada-EU free trade deal will boost beef industry

Oct 28, 2013

On Oct. 18, 2013 Canada and the European Union (EU) came to an agreement and signing, at least in principle, on the Canada-EU: Comprehensive Economic and Trade Agreement (CETA). While negotiations and drafting of the final text will continue over the coming months, the signing indicates that all major issues between the parties have been settled.

While the exact content of CETA is still unknown, a joint Canada- EU study in 2008 predicted that CETA could create 80,000 new jobs in Canada and bring up to $12 billion to the Canadian economy annually.

While CETA is being hailed as a huge accomplishment, Canada’s trade with the United States is still larger, according to reports. But the trade deal with the European Union covers a broader scope of trade issues. Both the North American Free Trade Agreement (NAFTA) and CETA reduce tariffs on goods, but the EU deal covers extension of drug patents in Canada and offers bigger trade quotas for agricultural products. CETA also covers “sub-national procurement,” so European companies can bid on hydro or subway deals, and Canadians can do the same in Europe.

As with all politics, the cynics are out in full swing on the negotiations, but, according to Canada’s beef industry, CETA is good for Canadians.

Canadian Cattlemen’s Association (CCA) President Martin Unrau said the CETA announcement is a gamechanger for Canada’s beef industry, and will provide new duty-free access for 64,950 tonnes (1 tonne equals 2,204 lbs.) of Canadian beef valued at nearly $600 million, with the lion’s share of the quota reserved for Canada alone.

“The removal of longstanding barriers in this agreement, such as high tariffs, finally enables Canadian beef producers to benefit from the high value that the European beef market represents,” Unrau said. “We are confident that the remaining technical barriers with the EU will be resolved, and we look forward to continuing to work with the Government of Canada in this regard.”

The CCA has been working on the CETA from the outset of negotiations in 2009, engaging with the Canadian negotiating team and conducting advocacy with key EU and member state officials and industry representatives. CCA representatives attended numerous negotiating rounds in Brussels and Ottawa and met regularly with the Canadian negotiators of CETA to ensure they clearly understood the needs of Canada’s beef sector.

Saskatchewan Stock Growers Association President Harold Martens said Oct. 18 that “the comprehensive Canada-EU trade deal announced today opens up a $600 million market opportunity for Canadian beef, and a significant portion of the potential benefit will be realized by Saskatchewan producers.”

“Canadian beef producer organizations, including the Canadian Cattlemen’s Association and the Canadian Meat Council, have been working alongside federal government officials since 2009 to get a trade deal that opens the EU market to more Canadian product,” said Martens. “We commend their efforts, along with the efforts of Prime Minister Stephen Harper, international trade minister Edward

Fast and agriculture and agrifood minister Gerry Ritz to expand export opportunities for our industry.”

For the Canadian beef sector, CETA will produce dutyfree access for 64,950 tonnes.

Of this, 50,000 tonnes, consisting of 35,000 tonnes of fresh/ chilled beef and 15,000 tonnes of frozen beef, are reserved for Canada. In addition, Canada will see the 20 percent duty on the existing 14,950-tonne Hilton quota shared with the U.S. reduced immediately to zero. Canada will also continue to have access to the existing shared duty-free quota for high quality grain-fed beef. Combined with the new access, there is a potential to reach more than 100,000 tonnes per year of duty-free access for Canadian beef. Additionally, all live cattle, genetics and most beef offals and processed beef products will benefit from immediate unlimited duty-free access.

As important as the new tariff conditions are, resolution of the technical barriers for exporting Canadian beef to Europe are also vital, according to CCA. Details remain to be worked out on the technical issues, but for the first time, there is a written commitment between Canada and the EU, including a timetable, to resolve the technical barriers.

Annual beef consumption in the EU is approximately 8 million tonnes.

Martens noted that since 1997, the EU has imposed a quota that limited combined Canadian and US imports to 14,950 tonnes annually at a 20 percent duty rate. Under the CETA, the duty is reduced to zero and the quota on Canadian beef imports has been increased to 64,950 tonnes per year.

“Based on our current understanding of the terms of CETA, the removal of duties on Canadian beef will allow our beef to compete fairly with European beef products,” said Martens. “We’re confident that European consumers will appreciate the high quality of Canadian beef.”

Next up for Canada’s trade negotiators: the Trans-Pacific Partnership. Negotiations to reduce trade barriers and establish fairer trade rules involving 12 nations appear to be moving forward. — Traci Eatherton, WLJ Editor