Beef trade gap seen growing as U.K. pact clears Parliament

Interim post-Brexit trade deal gets royal assent

Canada’s beef cattle producers are warning of a growing beef trade deficit, not only between Canada and the European Union but between Canada and the United Kingdom, as a new stopgap U.K. trade pact nears its launch.

International Trade Minister Mary Ng on Friday announced Canada is ratifying the Canada-U.K. Trade Continuity Agreement (TCA), after its enabling legislation, Bill C-18, received royal assent on Wednesday.

The interim deal is meant to maintain trade flow between Canada and the U.K., following the latter country’s exit from the European Union and, in turn, from the Canada-E.U. Comprehensive and Economic Trade Agreement (CETA).

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The TCA “provides much needed predictability and stability, and will support workers and businesses on both sides of the Atlantic,” the government said Friday, noting Canada and the U.K. are “taking all necessary steps required” for an April 1 implementation.

U.K. International Trade Secretary Liz Truss, in a separate release Friday, said the TCA “saves an estimated 42 million-pound (C$73.1 million) tariff burden on U.K. exports, including through eventual zero tariffs on cars, and zero tariffs on beef, fish, chocolate bars and soft drinks.”

Ng on March 12 also launched public consultations on new trade negotiations with the U.K. toward a permanent trade pact. Those consultations are scheduled to wrap up April 27.

The Canadian Cattlemen’s Association said Friday it plans to be in on those consultations.

“We recognize the importance of avoiding trade interruptions and the need for a transitional agreement,” CCA president Bob Lowe said of the TCA in a separate release Friday.

“However, we are strongly advocating for a swift return to the negotiating table to establish an ambitious free trade agreement that addresses the current trade-limiting factors found within CETA.”

From cattle producers’ perspective, the CCA said, the TCA is “largely a replica of CETA with some gains being made in how Canada’s quota into the U.K. is administered.”

Under the TCA, the CCA said, the access granted for Canadian hormone-free beef this year totals 3,279 tonnes in 2021 and 3,869 tonnes c.w.e. (carcass weight equivalent) in 2022.

The U.K., meanwhile, “will have full duty access to Canada.”

Citing Agriculture and Agri-Food Canada (AAFC) data, the CCA put Canada’s beef trade deficit with the EU — including the U.K. — at about $500,000 in 2018, followed by a $17.3 million gap in 2019 and $96.8 million in 2020. For the U.K. alone, the CCA said, the 2020 beef trade deficit sits at $14 million.

During 2020, the CCA said, Canada exported 1,415 tonnes of beef to the U.K., which is “within the total access we have gained with some room for growth.”

During that time, however, the U.K. shipped 5,393 tonnes of beef to Canada, “significantly over our access to their market in this continuity agreement.”

No dispute resolution process

The CCA is thus “significantly concerned with how beef trade with the EU and U.K. has progressed” to the point where the organization has had to ask for compensation from the federal government, and it was “disappointing” that full trade reciprocity wasn’t granted in the TCA.

In future agreements, the CCA said, “we must obtain reciprocal access. Anything less is unacceptable to our producers.”

Ng, during C-18’s second reading in January in the House of Commons, said the TCA commits both countries to launch talks on a comprehensive Canada-U.K. trade pact within a year of the TCA’s entry into force, toward the goal of a new bilateral deal within three years.

During the same session in the Commons, however, B.C. MP Tracy Gray, the international trade critic for the opposition Conservatives, pointed out that while the TCA commits Canada and the U.K. to get back to the table within a year, “there are no penalties in the agreement if one side decides not to.”

The lack of such a sunset clause, she said, “makes this transitional agreement no different, really, from a comprehensive or permanent one.”

Further, Gray said, “the government’s failure to address concerns raised by stakeholder groups, especially by the agriculture and agri-food industry, such as non-tariff barriers, will unfortunately continue. Those are very concerning, and there is no clear dispute resolution process in the agreement.” — Glacier FarmMedia Network

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