Meat and grain representatives welcome trade deal, but…

The deal could hurt Canadian dairy and cheese industry

European cheese and wine producers are happy about a free trade deal with Canada. photo:

While a flock of export-oriented farm commodity groups quickly issued statements endorsing the proposed Canada-Europe free trade deal, other organizations and opposition politicians tempered their support with a caution to wait until all the details are known.

The Canadian Cattlemen’s Association, Canadian Pork Council, Grain Growers of Canada and the Canola Council of Canada led the way in noting the deal could eventually lead to a $1.3-billion increase in livestock, meat and crop exports to Europe. Meanwhile dairy farmers and the National Farmers Union saw negatives in the deal from an increase in subsidized European competition.

“The CETA offers tremendous potential for Canadian producers and food processors to grow exports to the EU,” said Lisa Skierka, chair of the Canadian Agri-Food Trade Alliance.

“We believe the CETA could increase total agri-food exports to the EU by $1.3 billion a year,” added CAFTA executive director Kathleen Sullivan. “Even in the case of beef and pork, where the EU is particularly sensitive, the CETA could be worth $1 billion a year.”

Text not available yet

It may be months before the final text is available and Canadians finally find out what the government has committed to. The government provided little additional information other than saying compensation would be available for any sectors hurt by the deal.

However, the EU went further, releasing a limited analysis of the impact of tariff cuts on shipments to Canada. “The agreement will rapidly — largely at entry into force — eliminate duties on agriculture. By the end of the transitional periods, Canada and the EU will liberalize, respectively, 92.8 and 93.5 per cent of trade lines in agriculture,” the analysis said.

“On prepared agricultural products (PAPs) more specifically, which are a major EU export interest and where the EU has a major export surplus with Canada, the outcome is particularly ambitious,” it said.

It particularly noted the benefit for wines and spirits. The EU already supplies about half of Canadian wine imports and as the EU is Canada’s major import source of wine — about half of its imports — the agreement would “significantly improve access.”

NDP Trade Critic Don Davis said New Democrats welcomed progress towards a comprehensive deal with Europe, but noted the text had not been released.

“The NDP will wait until the final deal is released, analyze its contents and engage in wide consultations with a diverse range of stakeholders — including business, labour, local and provincial governments, Aboriginal peoples, and others — to determine if the deal is, on balance, a good deal for Canada,” Davis said.

Liberal Leader Justin Trudeau said his party is “broadly supportive of CETA, though we have yet to see its details, as this is only an agreement in principle.”

John Manley, head of the Canadian Council of Chief Executives, welcomed the deal but noted that it will take time to fully analyze it.

Richard Dearden and Wendy Wagner of the Ottawa law firm Gowlings cautioned that once a final text has been agreed to it will go through a “legal scrub,” be translated into 28 languages and then ratified by Canada and the EU. The ratification process could take 18-24 months.

Meat versus dairy

Spokesmen for the meat industry also noted a lack of details, but welcomed the deal. Canada wins duty-free access for up to 80,000 tonnes of pork a year, up from an existing quota for 6,000 tonnes, and 65,000 tonnes of beef.

“We don’t have the details but we believe the relationship holds great potential to enhance our sector’s export opportunities through meaningful access to the EU market,” said Gary Stordy, spokesman for the Canadian Pork Council.

John Masswohl, vice-president of the Canadian Cattlemen’s Association said, “Those of us who have been close to the negotiations think that there is outstanding access to be had for the Canadian beef sector. We calculate that potential exports of beef to the EU could exceed $600 million under the CETA.”

However, the dairy industry expressed concern over the increase in quotas for European cheese.

European dairies will be able to ship an additional 16,000 tonnes of cheese and 1,700 tonnes of industrial cheese tariff free annually, giving European producers some eight per cent of Canada’s cheese market.

“If this deal proceeds, the Canadian government will have given the EU an additional exclusive access of 32 per cent of the current fine cheese market in Canada, over and above the existing generous access,” said Dairy Farmers of Canada president Wally Smith.

“This deal would displace our local products with subsidized cheeses from EU and risk our small businesses being shut down or put out of business,” he said. “This is unacceptable.”

The new cheese quotas are on top of Europe’s existing quota of 13,500 tonnes, which already accounts for two-thirds of Canada’s cheese imports, said Therese Beaulieu, spokeswoman for Dairy Farmers of Canada.

Prime Minister Stephen Harper said Ottawa would still compensate dairy farmers who may be hurt by the deal.

The NFU said the deal amounts to a sellout of Canada to foreign corporations. “Canadians are losing the fundamental tools of economic policy. We cannot restrict the movement of capital, which makes us vulnerable to wild currency fluctuations. Except for six-month terms during emergencies, we cannot take measures to influence our balance of payments. This is disastrous for our economic sovereignty,” said president Terry Boehm.

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