11 / 48
Fall
2017
grainswest.com11
BY NATALIE NOBLE
agreement could increase exports by up
to $1.2 billion per year—equivalent to an
extra 1.8 million tons, or approximately 10
per cent of Canada’s current annual pro-
duction—through elimination of tariffs.
“Our tariffs are higher than our compet-
itors’, bringing us a disadvantage,” he said.
“If this agreement can eliminate these
tariffs, that would have a huge impact on
value in what we sell into their country.”
White added that there is a need for
more predictable access, with exports
fluctuating from year to year. “As a suppli-
er, it’s very challenging,” he said. “We’re
looking for stabilization and elimination
of non-tariff issues in this agreement.”
Cam Dahl, president of Cereals Canada,
said the wheat sector has experienced sig-
nificant fluctuations in exports to China
over the past few years, which presents a
significant challenge to Canadian farmers.
“China is the world’s largest producer of
wheat,” he said. “Their government has
indicated repeatedly that it intends to be
self-sufficient in its wheat production.”
However, he added that Canada
supplies a different quality than China’s
largely medium-protein and medium-qual-
ity wheat. “Because of this, I believe there
will always be a reasonably strong market
for our wheat going into China.”
Canada currently has a tariff-rate quota
(TRQ) on the significant amount of grain
it exports to China. However, it is only be-
ing filled at nine per cent and is controlled
by China’s National Cereals, Oils and
Foodstuffs Import and Export Corpora-
tion, the state trading enterprise. Dahl
said that any steps to encourage China to
increase its TRQ fill rate could increase
Canada’s exports of that product.
“If TRQs could be allocated to more
companies looking to buy Canadian grain,
the demand would significantly increase,”
he said. “There are some adjustments to
an agreement that could go a long way for
all cereal grains.”
China applies a 10 per cent tariff on
imported Canadian malt. Because China
prefers to complete the malting process
at its own state-of-the-art facilities, it
imports a relatively small amount of
Canadian malt—approximately 10,000 to
15,000 tons per year. However, China is a
large consumer of malting and feed barley,
with tariffs currently set at three per cent
for seed.
“The Chinese are taking an awful
lot of malting barley from Canada,” de
Kemp said. “They’ve gone from import-
ing between 300,000 to 350,000 tons
three years ago, to between 700,000 to
900,000 tons this past year.”
The current tariff on Canadian feed
barley averages approximately $7 per ton.
As a top barley competitor in the world
market, Australia has secured an FTA
with China and therefore incurs no barley
tariff. This puts Canadian barley farmers
at a disadvantage.
“Eliminating that tariff will make us
more competitive,” de Kemp said.
An FTA with China is expected to open
up big opportunities for Canadian feed
barley, especially considering its protein
levels are three per cent higher than Aus-
tralian barley. The BCC is working with
select Chinese clients to introduce them
to Canadian feed barley and its benefits.
“Even though our price may be higher,
there’s an advantage and a savings for
them in reducing some of their pro-
tein-percentage requirements through
something like soybean meal in a poultry
or a hog ration,” de Kemp said.
In late July, a team of Chinese delegates
visited Western Canada to tour numerous
poultry, hog and feed mill operations as
well as a couple of barley-producing farms
in Alberta, and viewed barley research
projects being conducted at the University
of Saskatchewan.
In addition to the tariff issues, Canadi-
an exporters are experiencing non-tariff
barriers with the Chinese, such as incon-
sistencies in regulations, standards and
testing. Addressing non-tariff barriers will
require thorough and focused work on the
part of Canadian negotiators.
“We need scientifically based rules and
systems in place and a robust process for
dispute resolution,” Dahl said. “We do
not want to blur any of the lines between
Photo:CanadianPorkCouncil
Martin Rice, acting executive director of the Canadian Agri-Food Trade Alliance,
suggests Canada mustn’t lag behind on trade talks with China as it did with Korea.