proposed canada-eu fta and agricultural trade
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Proposed Canada-EU FTA and Agricultural Trade. David Blandford [email protected]. Regional Trade Agreements (RTAs): New developments and expectations AES/CEAS Conference School of Economics, University of Kent 24 th June, 2011 . Canada-EU FTA:. - PowerPoint PPT PresentationTRANSCRIPT
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Proposed Canada-EU FTA and Agricultural Trade
David [email protected]
Regional Trade Agreements (RTAs): New developments and expectations
AES/CEAS ConferenceSchool of Economics, University of Kent
24th June, 2011
2
Canada-EU FTA: A proposal to conclude a Comprehensive
Economic and Trade Agreement (CETA) between the EU and Canada was announced in June 2009
Seven rounds of negotiations have been completed since October 2009
The aim is conclude the negotiations by 2012 The EU is Canada’s 2nd largest trading partner
taking $C49.2 billion of exports and supplying $C55.2 billion of imports in 2010
3
Canada-EU FTA: Joint Canada-EU study has suggested a gain of
0.77% in Canada’s GDP and 0.08% in EU GDP from liberalization of trade in goods and services
The study and its conclusions have been controversial in Canada
Canada already has an FTA with the US its largest trading partner: NAFTA, 1994 the successor to CUSTA, 1988
4
Leading US agricultural export destinations (2010)
Source: Foreign Agricultural Trade of the US
China
Canad
a
Mexico
Japan
Europea
n Unio
n-27
South K
orea
Taiwan
Hong K
ong
Indon
esia
Turkey
Egypt
Philippine
s
Vietnam
Thaila
nd
Russia
02,0004,0006,0008,000
10,00012,00014,00016,00018,000
Mill
ion
dolla
rs
5
Leading US agricultural export destinations (2010)
Source: Foreign Agricultural Trade of the US
China
Canada
Mexico
Japan
Europea
n Unio
n-27
South
Korea
Taiwan
Hong K
ong
Indone
sia
Turke
yEgyp
t
Philippin
es
Vietnam
Thailan
d
Russia
0%2%4%6%8%
10%12%14%16%
Perc
ent o
f tot
al
6
Leading US sources of agricultural imports (2010)
Source: Foreign Agricultural Trade of the US
Canad
a
Europea
n Unio
n-27
Mexico
ChinaBra
zil
Indone
sia
Australi
aChile
Thaila
nd
Colombia
Malays
ia
New Z
ealan
dInd
ia
Guatemala
Costa
Rica0
2,0004,0006,0008,000
10,00012,00014,00016,00018,000
Mill
ion
dolla
rs
7
Leading US sources of agricultural imports (2010)
Source: Foreign Agricultural Trade of the US
Canad
a
Europea
n Unio
n-27
Mexico
ChinaBra
zil
Indone
sia
Australia
Chile
Thaila
nd
Colombia
Malays
ia
New Zea
land
India
Guatemala
Costa R
ica0%2%4%6%8%
10%12%14%16%18%20%
Perc
ent o
f tot
al
8
US agricultural trade with Canada
9
US agricultural trade with Canada
10
US agricultural trade with Canada
11
US agricultural exports to the EU (2010)
Source: Foreign Agricultural Trade of the US
Oilsee
ds &
Prod
s
Nuts &
Prep
Animals
& P
rods
Grains
& Fee
ds
Other H
ort P
roduc
ts
Tobac
co, U
nmfg
Fruits
& Prep W
ine
Essen
tial O
ils
Vegeta
bles &
Prep
Seeds
, Fiel
d/Gard
en
Fruit J
uices
Sugar
& Tropica
l Pro
Nursery
& G
reenh
ouse
Bevera
ges E
x Juic
e
Cotton
, Ex L
inters
Tobac
co - M
fg
Cotton
Linte
rs0
500
1,000
1,500
2,000
2,500
Mill
ion
dolla
rs
12
US agricultural imports from the EU (2010)
Source: Foreign Agricultural Trade of the US
Bevera
ges,
EX Fruit J
uice
Essen
tial O
ils
Animals
and P
roduc
ts
Oilsee
ds an
d Prod
s
Grains
and F
eeds
Vegeta
bles a
nd P
reps
Cocoa
and P
rods
Other H
ort P
roduc
ts
Drugs,
Crude N
atural
Coffee
, Incl
Prods
Fruits
& Prep
Sugar
and R
elated
Prod
s
Seeds
, Fiel
d and
Gard
en
Nursery
Stoc
k, Bulb
s, Etc
Tea/M
ate, In
cl Herb
al Tea
Spices
and H
erbs
Cut Flow
ers
Tobac
co, U
nmfg
Fruit J
uices
Tobac
co, M
fg
Nuts an
d Prep
s
Fibers,
Exc
l Cott
on
Rubbe
r/allie
d Gum
s, Crud
e
Cotton
, Exc
l Lint
ers0
200,000400,000600,000800,000
1,000,0001,200,0001,400,0001,600,0001,800,000
Mill
ion
dolla
rs
13
Canada’s total trade with the EU
From J. Stanford, “Out of equilibrium: the impact of EU-Canada free trade on the real economy”, October 2010.
14
Canada’s trade with the EU, 2009
Source: J. Stanford, “Out of equilibrium: the impact of EU-Canada free trade on the real economy”, October 2010.
Category Exports Imports Trade balance
Average Cdn. tariff
Average EU tariff
Million C$ Percent
Agriculture 1,724 258 1,467 2.3 6.6
Processed foods
719 1,450 -731 32.5 15.6
Beverages and tobacco
26 1,767 -1,741 4.8 7.4
All goods 29,443 44,268 -14,825 3.5 2.2
Structure of Canada-EU trade 2009
15
Source: J. Stanford, “Out of equilibrium: the impact of EU-Canada free trade on the real economy”, October 2010.
38%
11%
50%
Primary Processed primaryValue-added
Canadian exports to EU
8%
6%
86%
EU exports to Canada
Major agricultural products in Canada-EU trade, 2009
16
Source: J. Stanford, “Out of equilibrium: the impact of EU-Canada free trade on the real economy”, October 2010.
Canadian exports to EU EU exports to Canada
Wheat Soybeans Leguminous vegetables
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
Wines Spirits and Liqueurs
Beer0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
17
Wine policies in Canada1. MFN tariff on beer, spirits and most types of
wine (made from grapes) is zero2. But:
A Federal excise tax of 51.22 cents/litre is applied for wine over 7% alcohol
A 5% goods and services tax (GST) is added on top of the excise duty
Provincial liquor control boards or commissions (13) apply a mark-up to the wine (e.g., 17% in BC)
Provincial liquor sales taxes are applied on top of all this (10-12%)
Total tax can be over 50%3. A Canada-EC wine and spirits agreement has
existed since 2003 – primarily for GIs
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Access to Canada’s dairy market1. A supply management system has operated
since 19702. NAFTA (and the earlier Canada-US FTA) had
very little impact on U.S. market access for dairy products
3. Canada created TRQs for dairy products as part of the URAA (e.g., the tariff-free access for yogurt of 332 metric tons – the over quota tariff is 237.5%). The TRQ for cheese is 20,411.866 tonnes
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Proposed Canada-EU FTA and Agricultural Trade
David [email protected]
Regional Trade Agreements (RTAs): New developments and expectations
AES/CEAS ConferenceSchool of Economics, University of Kent
24th June, 2011