Canadian Agriculture and International Trade Negotiations

February 5, 2014

2

Trade is essential for the agricultural sector

• Sustained growth of the sector depends on Canada’s ability to remain competitive in global markets.Exporters of agricultural products (2012)

Exporting countries Value of global exports (billions CAD)

United States 150

European Union (27) 149

Brazil 83

China 44.3

Canada 44.2

Argentina 41

India 38

Importers of agricultural products (2012)

Importing countries Value of global imports (billions CAD)

European Union (27) 131

United States 109

China 105

Japan 66

Russia, Federation of 36

Canada 33

Mexico 27

South Korea 24Source: Global Trade Atlas

3

Seizing Growth Opportunities: A Trade Policy Toolbox

Trade Agreements

(WTO Agreements, NAFTA, other existing FTAs)

•Regular committee meetings

•Dispute settlement

Trade Negotiations

•WTO Agriculture Negotiations

•FTA negotiations

Market Access

•Market development initiatives

•Bilateral technical discussions

International Institutions

•Standard- setting (CODEX, OECD, OIE)

4

Free Trade Agreements (FTAs) – current situation

In Force / Signed FTAs Ongoing Negotiations

Canada-US (1989)

NAFTA (1994)

Israel (1997)

Chile (1997)

Costa Rica (2002)

EFTA (2009)

Peru (2009)

Colombia (2011)

Jordan (2012)

Panama (2013)

Honduras (2013)

European Union (launched in 2009)

South Korea (launched in 2005)

Ukraine (launched in 2010)

India (launched in November 2010)

Morocco (launched in January 2011)

CARICOM (launched in 2007)

Costa Rica (modernization; launched in August 2011)

Central American Countries (El Salvador, Guatemala & Nicaragua) (launched in 2001)

Japan (launched in 2012)

TPP (joined in October 2012)

Israel (modernization; launched Jan 2014)

5

Canada-European Union Trade Relationship

• The EU is Canada’s second largest trading partner and the world’s largest market for agriculture and agri-food products (population of nearly 500 million).

Total agri-food exports to the EU: $2.54 billion

Total agri-food imports from the EU: $4.01 billion

Frozen Fruits and Nuts

Chocolate confectionery

6

Canada-European Union CETA Negotiations

• Most significant trade negotiation since NAFTA

• Agreement-in-Principle announced October 18, 2013– Details on: www.actionplan.gc.ca/ceta

• Working to finalize remaining issues

• Entry into Force??

7

CETA Agreement-in-Principle

• New market access opportunities for Canadian exporters:

– Elimination of over 95% of EU agricultural tariffs when fully implemented.

– Immediate duty-free treatment for:• Fruits and vegetables, including apples, blueberries and cherries• Processed foods, including maple syrup, sugar confectionary, chocolate, biscuits,

cookies, mixes and dough, baked goods and other food preparations• Oils, including soybean and canola oil• Cat and dog food

– Tariff elimination over 7 years for:• Durum and high-quality common wheat• Low-medium quality wheat, with a 100,000 tonne transition duty-free quota• Rye, barley, oats

8

CETA Agreement-in-Principle

• New market access opportunities for Canadian exporters:

– New market access opportunities created for beef, pork, bison and sweet corn.

• Beef: duty-free tariff quota for 50,000 tonnes• Pork: duty-free quota for approx 80,000 tonnes)• Bison: duty-free quota of 3,000 tonnes• Sweet corn: duty-free quota of 8,000 tonnes

– Includes text on sanitary and phytosanitary (SPS) measures, technical barriers to trade (TBT), and issues related to biotechnology.

Saskatchewan Agri-food Exports to the EU

9

Sector Saskatchewan Exports to EU (AVG 2010-2012; $Cdn; millions)

Grains 351 -durum wheat 259 -wheat 90 Pulses 125 -lentils 94 -peas 22 -chickpeas 7 Oilseeds 116 -flaxseed/linseed 58 -canola 52 Special Crops 56 -canary seed 30 -mustard seed 26 Other* 21

*Other includes: animal feed, mustard flour & meal, seeds of forage plants for sowing, etc. Source: Global Trade Atlas (GTA)

Saskatchewan and Canadian Agri-Food Exports to the EU

10

Products of Potential Saskatchewan Export Interest

Saskatchewan Exports to EU (10-12 Avg)

Saskatchewan Global Exports

(10-12 Avg)

Canadian Global Exports

(10-12 Avg)

Approx EU Tariff

Live Animals 359,545 118,090,928 1,558,831,07210.2% + 931

Euro/T

Beef/Bison 21,388 629,104 1,318,909,89612% + 3,034

Euro/T

Pork 0 26,613,694 2,902,146,293 869 Euro/T

Malt 0 71,338,751 474,030,706 177 Euro/T

Honey 0 11,021,720 56,478,510 17.3%

Oils (canola) 10,153,165 1,403,916,520 2,910,053,826 Up to 9.6%

Pulse flours/meal 6,497 2,326,315 5,910,260 7.7%

Animal Feed/Pet Food 1,144,309 5,397,923 500,049,291 948 Euro/T

Food Preparations (210690) 5,890 2,240,472 779,258,083 Various

Source: GTA

CETA Agreement-in-Principle: Rules of Origin

• Rules of origin are a key issue to ensure real market access for Canadian food exports to the EU.

• Although Canada and the EU have very different traditional approaches to rules of origin, the majority of Canada’s products will meet the CETA rules of origin.

• For some Canadian products with a higher proportion of imported inputs, more liberal rules of origin have been negotiated for a specific quantity of imports. – High sugar containing products– Chocolate and sugar confectionary– Processed foods – Dog and cat food

11

Jennifer HigginsonDeputy Director, Trade Negotiations Division, Agriculture and Agri-Food CanadaTel: 613-773-1762Email: jennifer.higginson@agr.gc.ca