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Poultry boards not letting their guard down as NAFTA preparations begin

The U.S. has a healthy trade surplus with Canada for eggs and poultry

Dairy may be getting all the attention in the upcoming NAFTA negotiations, but the chicken, egg and turkey boards aren’t letting their guard down as talks begin in mid-August.

“The government has been clear in its support for supply management and we are confident it will continue to support and protect supply management during the negotiations while finding a way to work with the United States,” said Yves Ruel, manager of trade and policy for Chicken Farmers of Canada. “It has been done before successfully and we believe it will be done again.”

The Canadian chicken sector believes the reason it’s not in the spotlight is that the existing NAFTA arrangement has provided stability and predictability to chicken producers on both sides of the border.

“In terms of the U.S.’s No. 1 renegotiation priority — improving the U.S. trade balance and reducing the trade deficit — it is important to note that the U.S. has consistently enjoyed a positive balance in its chicken trade with Canada,” he said. “Between 2012 and 2016, the American chicken trade surplus with Canada averaged around $200 million per year.”

Rowan Weerdenburg, communications officer for Egg Farmers of Canada, said his organization is following the negotiations closely but doesn’t anticipate being on the agenda.

“The current access provided to the U.S. for eggs through NAFTA is not a fixed amount; it’s based on a percentage of the previous year’s domestic production,” he said. “In fact, access provided to the U.S. for eggs under NAFTA has grown year over year alongside domestic demand. This has delivered both a growing and predictable market for U.S. egg exports.”

He noted that the U.S. has consistently enjoyed a positive balance in the trade of eggs with Canada. In just 2016, the U.S. maintained a net trade surplus of close to $40 million.

Phil Boyd, executive director of Turkey Farmers of Canada, said, his group is also closely involved with the Canadian trade negotiators. “We want to make sure no harm is done.”

In addition to NAFTA, the poultry groups have been closely tracking the TPP and Europe free trade talks. U.S. poultry groups have made calls for increased access to Canada and echoed complaints made by the Trump administration about the restrictions created by the Canadian supply management system.

Ruel noted that since 2012, Canada has been the second-largest destination for U.S. broiler meat after Mexico in terms of both volume and value. When considered on a per capita basis, the value of Canadian imports of U.S. chicken are three times greater than the value of Mexico’s imports of U.S. chicken, he said.

Our tariff-rate quota provides real market access to our American counterparts, and removes the risk of the erection of non-tariff barriers, as is a current practice in many other countries,” he said. “For instance, unlike many other U.S. trade partners, Canada did not take advantage of the extensive 2015 avian influenza outbreak there to block exports. Such certainty has enabled the U.S. chicken sector to invest in significantly increasing its exports.”

The import predictability provided by the NAFTA regime has allowed Canada’s unique supply management system to thrive next door to the largest chicken producer in the world, he said.

“By matching production levels to domestic requirements, we do not generate surpluses that would then in turn be exported, potentially displacing U.S. production and creating disruption on the U.S. market. Instead, Canadian chicken farmers can remain focused on satisfying our domestic market, most notably through the implementation of the rigorous production and animal care practices that Canadian consumers want.”

The position taken by the Canadian chicken sector is that the renegotiation of NAFTA must do no harm to the existing balanced and mutually beneficial trade relationship with the United States, he said.

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