Canadian government ready to talk about ratifying a trade deal with Europe

Thursday, April 28, 2016

by SUSAN MANN

UPDATE: Tuesday, May 3, 2016 - The federal government announced Monday it plans to hold discussions with the dairy industry on compensation due to the increased cheese access Canada granted to the European Union under the Comprehensive Economic and Trade Agreement (CETA).

In anticipation of the government ratifying the trade deal with Europe “and as part of the government’s strong commitment to the Canadian dairy industry, we will move forward with a plan to help the industry adjust to market access concessions,” said a joint written statement by Agriculture and Agri-Food Minister Lawrence MacAulay and International Trade Minister Chrystia Freeland.

The two ministers said they are committed to meeting with industry leaders within the next 30 days “to obtain their views on the mitigation package.”

Items to be discussed include transition support for farmers and processors and proposed program and investment options.

“The government remains committed to the supply management sector,” the ministers said in the statement. END OF UPDATE

As the Canadian government prepares to begin debating the merits of the Canada-European Union Comprehensive Economic and Trade Agreement, farm groups are at odds on how to handle the deal.

On the one hand, the National Farmers Union is telling federal Agriculture and Agri-Food Minister Lawrence MacAulay and other federal officials to scrap the deal.

Another group, the Canadian Cattlemen’s Association, says there’s tremendous value in the deal for Canadian beef producers if certain technical details can be worked out. The most significant unresolved matter is the European Union hasn’t yet approved all of the procedures Canadian beef production uses to ensure “maximum food safety for consumers,” the cattlemen’s association says in an April 21 news release.

Once the deal is implemented it will remove a prohibitively high tariff for nearly 65,000 tonnes of Canadian beef annually, the release says.

During the past few years, Canadian beef producers have been shipping just 600 tonnes to about 1,000 tonnes of beef annually to Europe.

The tariffs are different depending on the cut of meat, says John Masswohl, cattlemen’s association director of government and international relations. The highest tariff, which is applied to fresh beef, is about 3,000 euros per tonne (equivalent to three euros a kilogram or C $4.50 per kg) plus 12.5 per cent of the value of the shipment.

Removing the tariff would mean Canadian beef exports could grow to $600 million a year from the current level of $6 million to $10 million a year.

Masswohl says Canadian beef access to the European market will be phased in over five years, once the deal is implemented. Growing the beef exports to a $600 million a year level will take some time.

“We have to raise the cattle according to European standards,” he explains.

For beef exports to Europe, Canadian production facilities must be certified by the Canadian Food Inspection Agency as not using growth-enhancing hormones.

Global Affairs Canada spokesperson Diana Khaddaj says by email the translation and review of the agreement’s text into French and the 21 other European languages will be done in the “coming weeks.” Once that’s done, the domestic ratification process can begin.

Canada and the European Union are committed to having the deal signed this year and implemented next year, she says.

International Trade Minister Chrystia Freeland visited Berlin (Germany) and Brussels (Belgium) in April to promote the trade agreement’s benefits. In Brussels, she issued a joint statement with her European counterpart, European Commissioner for Trade Cecilia Malmström, reaffirming that implementing the agreement is a top priority for both Canada and Europe.

With Canadian government officials travelling to various international agricultural ministers’ meetings and talking to European agricultural ministers at those gatherings, Masswohl says, “we see this as a whole coordinated strategy now. CETA (Comprehensive Economic and Trade Agreement) is definitely moving” and could be signed in the fall.

“Signing it triggers the ratification process by the parliaments on both sides,” he explains.

Once the Canadian parliament has a bill to implement CETA, “they will hold hearings,” Masswohl says.

The National Farmers Union says one of the big losers from the deal’s implementation will be young dairy farmers.

 In an April 13 letter to MacAulay, the farmers union says the 17,700 tonnes of high value cheese, the previous Conservative government agreed to allow into Canada as part of the deal, would mean a loss of 177,000 tonnes, or 177 million litres of Canadian milk production annually.

That quantity would be enough to support about 400 young farmers, each with a 50-cow dairy herd.

European farmers in several countries, such as England, France, Belgium, Hungary and Germany, held rallies this spring protesting against the European agricultural policy that removed their quotas, union president Jan Slomp says in the letter. Farmers in Europe want a return to mandatory quotas, which ended about a year ago.
 
Without the quotas, milk production in Europe rapidly increased, resulting in a market glut and price crash, Slomp says.

“Ratifying CETA would mean Canadian consumers would be implicated in the unfair treatment of European farmers, and deny young Canadian future farmers their chance to enter Canada’s dairy sector,” Slomp says.

In a telephone interview, Slomp says they sent the letter to MacAulay now because “it feels like” the Canadian government is preparing to start talking about ratifying the trade deal.

For its part, Dairy Farmers of Canada is optimistic there will be compensation for Canadian farmers.

“We haven’t been contacted to have specific discussions on the compensation package for CETA,” says Isabelle Bouchard, Dairy Farmers communications and government relations director.

However, a news report in April, quoted Freeland as saying there will be compensation if the deal is signed, she says. “We’re optimistic that we are going to have a conversation soon with the government on the compensation package.”

Dairy Farmers isn’t calling on the government to reject the deal. “What we’re saying is if any trade deal is to be signed and dairy is part of the deal, there needs to be compensation,” Bouchard says.

About the National Farmers Union numbers, Bouchard says they are accurate as they apply to a 50-cow herd, however the average herd size in Canada is slightly less than 80 cows.

Slomp says the 50-cow herd number was used as that’s the average herd size in Quebec. BF