Grainswest Tech 2021

Tech 2021 Grains West 46 BY DANIEL RAMAGE • PHOTO BY PIXABAY Successful trade deal would boost wheat export opportunities CEREALS CORNER THE ANNOUNCEMENT THIS JUNE of the launch of free trade negotiations between Canada and Indonesia has put a spotlight on the Asian market. For Ca- nadian wheat farmers and exporters, the prospect of greater trade with Indonesia is worth close attention. Most importantly, these negotiations of- fer an opportunity to build on the trading relationship with one of our largest global customers while positioning Canada for future benefits from improved trade con- ditions. This is why Cereals Canada has been a leading advocate for the advance- ment of this agreement. Indonesia is already a major destina- tion for Canadian wheat with room to grow. Wheat exports to this market have grown substantially over the past decade. Exports tripled from roughly 750,000 tonnes in 2010 to more than 2.3 million tonnes by 2020. This underscores the importance of the Indonesian market to the Canadian wheat value chain. Against the backdrop of a stronger and more predictable trade environment enabled by a free trade agreement, Canadian export competitive- ness could continue to advance. Indonesia has a population of 275 million people, which is expected to grow rapidly as the country urbanizes and its economy expands. Its recent demographic shift has generated demand for wheat- based products against staples such as rice. This change has been driven by the convenience and affordability of popular products such as instant noodles and Western-style breads. These trends have made Indonesia one of the world’s largest wheat importers, and Canadian wheat is the perfect ingredient to make these prod- ucts, whether on its own or blended with lower protein wheats from elsewhere. Keeping tariff-free access is important for our industry, but our competitiveness can be bolstered through improved pre- dictability and transparency of trade. Indonesian inroads In agriculture, this means the establish- ment of clear science-based rules and a strong capacity to prevent or quickly resolve non-tariff trade barriers. Canada can make the most of trade agreements by ensuring market access issues are proac- tively monitored and resolved. The creation of a positive trade envi- ronment underpinned by greater dialogue and co-operation will ultimately improve our competitive advantage. Australia is now the only major wheat competitor operating under a trade agreement with Indonesia. The Canadian agreement could potentially put the country on even footing with Australia or create advantag- es that would put it ahead of the curve in this key market. Despite recently concluded trade deals such as the Comprehensive and Progres- sive Agreement for Trans-Pacific Partner- ship and the Comprehensive Economic and Trade Agreement with the European Union, non-tariff trade barriers have created significant obstacles to Canadian agricultural exports in these markets. As Canada establishes the Indonesian agree- ment and future deals, we must ensure these can provide quick solutions when unwarranted barriers arise. Securing a successful deal with In- donesia will also set the stage for even larger opportunities and deeper regional connections across Asia. By upping our game with a market leader such as Indo- nesia, Canada can create a blueprint for future dialogue with additional Associa- tion of Southeast Asian Nations partners. Such connections strengthen our sector’s prospects for new trade opportunity and market diversification. Daniel Ramage is director of market access and trade policy for Cereals Canada. A substantial destination for Canadian grain, the Indonesian export market is expected to grow as consumer demand for wheat-based foods increases.