Basic HTML Version
It’s a huge advantage that must be
diligently guarded and aggressively
pursued. A joint Canada–EU study
concluded that the agreement could
generate $12 billion in new revenue for
Canada. Notably, when implemented in
approximately late 2016, CETA will see
nearly 94 per cent of agricultural tariffs
dropped outright.
In comparison, the agreement with
South Korea is about playing catch-
up. Since the EU and the U.S. signed
agreements with South Korea in 2011
and 2012 respectively, Canadian exports
to the country have diminished to $530
million in 2013 from $1 billion in 2011.
“This agreement will rectify that,”
said Fast.
While some tariffs face long phase-
out periods, when the CKFTA comes
into force, 82 per
cent of tariff lines
will be duty-free.
The Canadian
government
predicts this will
boost the Canadian
economy by $1.7
billion annually.
In contrast, the
TPP represents
a market of 792
million customers
that now accounts
for 65 per cent
of Canada’s agri-food exports. It will
cement existing agreements with its
12 member nations, including Mexico,
Chile, Australia and New Zealand, and
maintain Canada’s dominant access to
the U.S. market under NAFTA. It also nets
previously unsigned trading partners
such as Vietnam and Malaysia, with Japan
being the deal’s top Canadian prize.
Japan is already a $4 billion agri-food
market for Canadian exports, and
Canada is working parallel to the TPP on
the Canada–Japan Economic Partnership
Agreement so as not to fall behind
the U.S. A 2012 government study
concluded that increased trade with
Japan has the potential to boost Canada’s
GDP by $3.8 billion.
Yet these three agreements will
take time to come into force. While
CETA is predicted to take effect in two
years, once CKFTA is finalized, it will
see some tariffs phased out over two
to 17 years. And though it is too early
to predict an implementation date for
the TPP, Alberta’s agricultural sector
isn’t complaining about the wait, as
the potential return for an export-
focused nation such as Canada is just so
staggering.
A 21st-century trade agreement
In notable contrast to the 1987 signing of
the Canada–U.S. Free Trade Agreement
and subsequent North American Free
Trade Agreement (NAFTA), these latest
international handshakes have generated
little controversy. A transatlantic flight
for EU trade
officials provided
by the Canadian
government,
and the too-late
fussing of German
opposition
politicians opposed
to CETA, were
instantly old news.
Fast ascribed
this quiet
approval at home
to Canadians’
comfort with
well-negotiated trade agreements and
understanding that they can well serve
the country’s long-term economic
interests. As well, he believes NAFTA
and CETA are barely comparable.
Whereas NAFTA concentrated on trade
goods, CETA is broadly comprehensive
in scope—a complex 21st-century
agreement.
“CETA takes a giant leap forward,” he
explained. “Putting in place mechanisms
that will address many of the non-tariff
barriers that your industry’s members
struggle with, and are so frustrated by.”
The biggest agreement, CETA has
received a great deal of the government’s
focus despite the stagnation of the
EU marketplace. Fast said the goal is
obtaining immediate access for Canadian
companies to a previously untapped
market made inaccessible by high tariffs
or significant non-tariff barriers.
“That’s why this agreement allows us
what I believe may be a once-in-a-lifetime
opportunity for our Canadian companies
to have access to the largest consumer
market in the world,” he explained.
A systems approach
A Canadian Agri-Food Policy
Institute (CAPI) report,
Leveraging
Trade Agreements to Succeed in
Global Markets
, underscores that
other countries are also aggressively
attempting to secure preferential trade
access for their agricultural producers,
and this competition doesn’t end with
the stroke of a pen.
“We’ve scored a big win with the
CETA,” said CAPI president and CEO
David McInnes. However, he suggested
there’s work to be done in order to
profit: The agricultural sector must act
collaboratively, prepare to seize new
export channels and act defensively
against new competition.
Addressing all of these facets as
part of what McInnes terms a “systems
approach,” CAPI is calling for a trade
barrier audit.
“We really have to think about the
supply-chain strategies, the market
access and entry strategies,” McInnes
said. This includes ensuring that
transportation and infrastructure—from
ports to railways—are aligned and well
oiled.
As strategic as government
negotiators have been in hammering
out agreements, he said, this same
diligence must apply to dealing with the
non-tariff barriers that fall outside of the
agreements.
“It requires working with and
advancing private-sector standards that
dictate market entry requirements, and
truly knowing how the Canadian food
brand can be best leveraged to win over
consumers in market niches in various
countries,” he explained.
In other words, opening a market
Winter
2015
grainswest.com
39
“When CETA comes into
force, Canada will be the
only major developed
economy in the world to
have trade agreements
with the two largest
markets in the world: the
U.S. and the EU.”
–Minister Ed Fast