Winter
2016
Grains
West
22
Feature
FTER YEARS OF SOMETIMES-
tense negotiations, a tentative
Trans-Pacific Partnership (TPP)
agreement was struck in October, with
Canada as a founding member of the
historic trade pact.
The agreement encompasses a wide
range of international policies, including
everything from pharmaceutical patents
to intellectual property law. Although
the provisions in some of these areas are
controversial, many farmers, especially
in Western Canada, are welcoming the
deal with open arms.
“The way I see it, we export more
than 80 per cent of grains and 90 per
cent of canola products offshore, so
any deal anywhere in the world will only
be of benefit to us because we rely so
heavily on exports,” said Greg Porozni,
chair of Cereals Canada and a farmer
near Mundare, AB. “We are now back
on the same level playing field with our
main competitors, Australia and the
United States, especially in Asia. That’s a
growth market.”
One major advantage of the TPP
agreement is its scale. Canada formally
joined the TPP negotiations in 2012,
but the partnership began when
New Zealand, Chile, Singapore and
Brunei signed its precursor, the Trans-
Pacific Strategic Economic Partnership
Agreement, in 2005. Since then, the
number of TPP countries has grown to
12, including Canada, Australia, the
A
Canadian agricultural producers poised to reap benefits of TPP deal
BY TYLER DIFLEY
United States, Japan, Mexico, Vietnam,
Malaysia and Peru. Together, the 12
TPP countries have a combined GDP
of $28.5 trillion—nearly 40 per cent of
the world economy—and encompass
almost 800 million people.
“Ninety per cent of farmers across
Canada depend on trade, and having
access to the TPP region is very critical,”
said Claire Citeau, executive director of
the Canadian Agri-Food Trade Alliance.
“With the TPP, not only do we have
access to Japan and other key, fast-
growing Asian markets, such as Vietnam
and Malaysia, but we’re able to maintain
the North American platform as well.”
One of the major sticking points that
had long prevented a deal from getting
signed was Canada’s defence of its
supply-managed dairy, poultry and
egg industries. Several TPP members,
including Australia, New Zealand and
the U.S., criticized Canada’s supply-
management regime throughout
negotiations. In the end, the system was
preserved, but some market access was
conceded to foreign competition.
Dairy imports equivalent to about
3.25 per cent of Canada’s current annual
dairy production will be permitted
under the deal, while the numbers for
eggs and chickens are 2.3 per cent and
2.1 per cent, respectively. Then-prime
minister Stephen Harper pledged $4.3
billion in compensation for supply-
managed farmers to offset lost income,
to be paid out over the 15 years after
the deal comes into force. Additionally,
$450 million would be set aside for
improvements to dairy, poultry and egg
processing facilities and a $15-million
market development fund would be
set up to promote supply-managed
agricultural products.
GRAIN GAINS
For Canada’s trade-dependent
agricultural sector, the significance of the
agreement cannot be overstated. The
Canadian grain, oilseed and red meat
industries all stand to see significant
benefits from tariff reductions and less
restrictive import quotas.
Canadian wheat and barley—which
accounted for $2.8 billion per year on
average in exports to TPP countries from
2012 to 2014—will both receive increased
market access in the Asia Pacific region
as a result of the TPP. Feed wheat and
feed barley will both enter Japan duty-
and quota-free once the deal is fully
implemented. Japan currently has quotas
for food wheat and food barley, but the
Canada-specific quota for food wheat will
rise from 40,000 to 53,000 tonnes over
six years, while a new TPP-wide quota for
food barley will start at 25,000 tonnes
and increase to 65,000 tonnes within
eight years. Japan’s tariffs applied to
Canadian food barley and food wheat will
also be reduced by 45 per cent for barley
and 45 to 50 per cent for wheat within
GRAIN-TRADE
TRIUMPH
