Free Trade Agreements paramount to Canadian agriculture
Free Trade Agreements (FTAs) bring prosperity to the agri-food industry. This is why these agreements hit the front pages as NAFTA and CPTPP grab headlines and sometimes grip hearts.
Trade is now a global activity. Canada either goes after FTAs or eats dust; which is why Brian Innes, Vice President of Government Relations at Canola Council of Canada called Canada, “one of the most ambitious countries seeking better trade rules in the world right now.
“We are a medium size economy, but we have a large voice.” He says we get that large voice from our willingness to trade, to break down trade barriers and increase prosperity through trade. This is in contrast to several countries that have a protectionist stance right now.
Canada’s Free Trade Agreements in force
We also have Foreign Investment Promotion and Protection agreements with some countries.
Country In Force
- Chile 1997
- Colmbia 2011
- Costa Rica 2002
- European Free Trade Association 2009
- Iceland, Liechtenstein, Norway, Switzerland
- European Union 2017
Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden, United Kingdom
- Honduras 2014
- Israel 1997
- Jordan 2012
- Korea 2015
- NAFTA 1994
- Panama 2013
- Peru 2009
- Ukraine 2017
“Canada is one of the leading voices for increasing prosperity through more trade. Canada is the most aggressive country in the world seeking measures in trade agreements related to social goals that include all people in the benefits of trade,” says Innes.
We also belong to the Cairns Group that works together to make trade flow better.
The Cairns Group committed to achieving free trade in agriculture in 1986; Australia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Pakistan, Paraguay, Peru, Philippines, South Africa, Thailand, Uruguay, Vietnam cairnsgroup.org
“There is no region in the world where we would not benefit from having more free flowing trade.” Of course, there are some places that need what we produce more than others. South America for instance, produces a lot of the same products as Canada. Europe grows its own grain, but wants our livestock products.
“Whatever people choose to eat, whether it’s plant based or meat based protein, we’re very well equipped to serve them,” Innes points out.
There is one region that Innes sees as key to expand trade for Canadian agriculture – Asia.
“We’re falling behind other countries that have better access to Asian markets than we do,” Innes emphasizes. Asia has growing incomes and Canada could feed the demand for that population. Vancouver and Prince Rupert gives us quick, direct routes to major Asian markets compared to other food sources for that region such as South America or Australia.
Innes sees much work ahead for Canada to get into Asian markets. We only have one agreement signed and in effect in Asia (with Korea). This is what makes the Comprehensive & Progressive Trans Pacific Partnership (CPTPP) vital for Canadian agriculture.
“We need to have better agreements to keep up with our global competitors in Asia.” Australia, New Zealand, Peru and Chile all have agreements with China; Canada does not. This puts our products at a disadvantage in that market because we have tariffs that they don’t.
Innes says that the benefit of an agreement such as the TPP or the European Union agreement is that provisions within these agreements ensure that Canadian products need only meet one set of requirements to enter any of the countries involved rather than a separate list of requirements for each country.
“There can be many barriers related to technical issues for the regulations of plant and animal health. It’s very difficult to have commitments with a single country in these areas. It is much more beneficial and feasible to have agreements in technical areas and feed and food areas when it involves many countries,” according to Innes.
He adds that bilateral agreements are not beneficial to agriculture in the long term because trade agreements cover more than just tariffs. Otherwise, farmers might have to choose which country they intended to sell into before they planned a production method for any agriculture product.
With FTAs in place, Canadian producers can use programs such as https://keepingitclean.ca/. This program shares various crop production requirements for export to foreign countries. It helps Canadian producers grow with confidence that the end products will meet customer needs for quality.
“That includes the production practices that go into food,” stresses Innes.
In his view, the most important tasks before Canada at this time are the CPTPP, an FTA with China and resolution to NAFTA. He explains that NAFTA turns farmers from Canada, United States and Mexico into allies rather than competitors on the global market landscape. It creates an efficient food production region that excels in the world. Innes called it a key piece of our success going forward.
He said that at the NAFTA talks in January in Montreal, farmers from Canada, United States and Mexico had a common message.
“We are far better off than we were 25 years ago and we’re far better off because we are doing things that make us competitive in the world because we’re integrated.”
Canada’s top trading partners
Countries that imported the most Canadian shipments by dollar value during 2016. Also shown is each import country’s percentage of total Canadian exports.
1. United States: US$296.5 billion (76.2% of total Canadian exports)
2. China: $15.8 billion (4.1%)
3. United Kingdom: $12.9 billion (3.3%)
4. Japan: $8.1 billion (2.1%)
5. Mexico: $5.8 billion (1.5%)
6. South Korea: $3.3 billion (0.8%)
7. India: $3.0 billion (0.8%)
8. Germany: $3.0 billion (0.8%)
9. France: $2.6 billion (0.7%)
10. Belgium: $2.4 billion (0.6%)
11. Netherlands: $2.1 billion (0.55%)
12. Italy: $1.8 billion (0.45%)
13. Hong Kong: $1.8 billion (0.45%)
14. Brazil: $1.5 billion (0.4%)
15. Australia: $1.5 billion (0.38%)
Over nine-tenths (93.1%) of Canadian exports in 2016 were delivered to the above 15 trade partners. https://www.worldstopexports.com/canadas-top-import-partners/