Post on 16-Dec-2015
Prosperity Through Trade
Sharing Canola With the WorldTackling Trade Barriers
Presentation to the Canola Council of Canada Convention
March 23, 2004
Liam McCreery, PresidentCanadian Agri-Food Trade Alliance
Prosperity Through Trade
Presentation to Canola Council of Canada Convention
1. Introduce CAFTA
2. The Importance of Trade to the Canadian Canola Industry
4. Goals for this Round
3. Why Liberalize Trade?
5. Update on Negotiations
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1. Introducing CAFTA
• Officially Formed in Spring, 2001
• Roots in dissatisfaction with the results of the Uruguay Round
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The Uruguay Round:
Took the first steps to agricultural trade reform, but:
• Allowed Japan to bind tariff on wheat at $US 440 per tonne and $US 310 per tonne on barley
• Allowed for tariff escalation eg. Japan, canola seed enters free of tariff, oil hits tariffs of $130 to $150 per tonne
• Allowed Norway to bind a 318% tariff on canary seed
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• OECD Countries still provide $US 318 B in trade distorting subsidies
• Export subsidies are still used – e.g. EU can use export subsidies on 11 million tonnes of grain
• Grain and oilseed industry in Canada loses $1.3 billion annually
Took the first steps to agricultural trade reform, but:
• Tariff discrimination between competing products e.g. canola and soybeans
The Uruguay Round:
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Introduction to CAFTA- Roots in the Uruguay Round
• Minimal results was partly the fault of our sectors
• A lack of direction from the international market reliant sectors
• Isolation of Canada in negotiations
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• Canadian Alliance of Agri-Food Exporters formed in 1998
• Founding members included Prairie Pools, Cattlemen, Pork Council and Sugar Institute
• Merger with AITG resulted in formal organization CAFTA in 2001
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Agricore United
Canada Beef Export Federation
Canadian Cattlemen’s Association
Canadian Meat Council
Canadian Oilseed Processors Association
Canadian Sugar Institute
Canola Council of Canada
Cargill
Food and Consumer Products Manufacturers
Grain Growers of Canada
Malting Industry Association of Canada
Membership:
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2. The Importance of Trade
• Exports account for 40% of Canada’s GDP (4X US)
• 1 in 3 jobs depends on exports
• 7% of total exports are of agriculture and food = over 80% of farm cash receipts• 75% of wheat and durum
• 98% of canary seed
• 70% of cattle and beef
• 68% of dry peas
• 60% of canola
• 50% of hogs and pork
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2. The Importance of Trade
Canada is the world’s third largest exporter and 5th largest importer of agriculture and food
Exports are important to Provincial economies
• B.C. - $2.1 billion
• Alberta - $5.2 billion
• Saskatchewan - $4 billion
• Manitoba - $2.5 billion
• Ontario – $8.4 billion
• Quebec – 3.3 billion
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2. The Importance of Trade
If Canada Didn’t Trade – The domestic market would only require:
• 6.5 million tonnes wheat - 6.7 million acres
• 842 thousand tonnes of durum - 1.2 million acres
• 2.1 million tonnes of canola - 3.6 million acres
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2. The Importance of Trade
If Canada Didn’t Trade (wheat,durum and canola)
Trade is important, even in a distorted market
• 25.9 million acres currently in grain and oilseed production wouldn’t be required
• 20,000 farmers wouldn’t produce grains and oilseeds
• Revenue to the agriculture and Canadian economies would drop by about $5.6 billion
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3. Why Liberalize Trade?
1/3 cut in global agricultural tariffs means $100 million for Canada
Elimination of ALL tariffs globally means $60 billion for Canada
From DFAIT, Stats Canada and AAFC
• $7 million for B.C.• $21 million for Alberta• $15 million for Saskatchewan
• $11 million for Manitoba• $25 million for Ontario• $16 million for Quebec
• $5.0 billion for B.C.• $7.2 billion for Alberta• $1.8 billion for Saskatchewan
• $1.4 billion for Manitoba• $29.7 billion for Ontario• $11.6 billion for Quebec
Sector Gains from Tariff Elimination
British Columbia
Cattle & Beef $77 million
Hogs & Pork $11 million
Grains& Oilseeds $6.5 million
Alberta
Cattle & Beef $660 million
Barley $123 million
Hogs & Pork $117 million
Wheat $ 97 million
Saskatchewan
Canola $202 million
Wheat $139 million
Cattle & Beef $ 90 million
Barley $ 75 million
Manitoba
Hogs & Pork $212 million
Canola $189 million
Cattle and Beef $132 million
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3. Why Liberalize Trade?
George Morris Centre, 1999
Sector Gains from Tariff Elimination
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3. Why Liberalize Trade?
George Morris Centre, 1999
Ontario
Cattle & Beef $192 million
Soybeans $ 63 million
Corn $ 52 million
Wheat $ 4 million
Quebec
Cattle & Beef $67 million
Corn $31 million
Soybeans $11 million
Wheat $ 2 million
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3. Why Liberalize Trade?
• Tariff elimination over 10 years could return $485.6 million to the Canadian canola industry annually
• $81 per tonne
• $45 per acre
• Elimination of export and trade distorting domestic subsidies could return $234 million to the Canadian canola industry annually
• $39 per tonne
• $22 per acre
George Morris Centre, 1999 and AAFC
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3. Why Liberalize Trade?
• End of Subsidies and Tariff Barriers could return $719.6 million annually
• $120 per tonne
• $67 per acre
George Morris Centre, 1999
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3. Why Liberalize Trade?
India Tariffs - Canola oil 85%, Soybean oil 45%
Tariff Equity = increased exports for Canada of 200,000 tonnes of oil requiring 500,0000 tonnes of seed = about $200 million
Korea Tariffs – Canola 20% Soybeans 5%
Tariff Equity = increased exports for Canada of 200,000 tonnes = about $70 million
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4. Goals
CAFTA’s long term goal is the establishment of global tariff and subsidy-free trade in agriculture and food products
For this round:
1. Elimination of export subsidies
2. Elimination or at least substantial reduction in trade distorting support
3. Substantial and meaningful increases in market access
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4. Goals
Cancun Framework provides the opportunity for substantial reform
Export Subsidies – provides for the negotiation of a date for elimination
Domestic Support – provides for substantial disciplines on trade distorting support and disciplines non-trade distorting support
Market Access – formula for tariff reduction is complemented by an overall cap on tariffs, and requirements for expansion of minimum access
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5. Negotiations Update
• New chair – Tim Groser of New Zealand
• No more negotiating with the Chair
• Establish work plan
• Framework in May to July period – Ministers and General Council end of July
WTO Agriculture Committee meets this week in Geneva
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5. Negotiations Update• Renewed commitment to the round
• US and EU determined to get a framework this year
• G-20 holding firm on subsidies
• Cairns Group trying to be the bridge – focus on market access
• Can We meet the Dec 31, 2005 Deadline?
• Elections in U.S. and India – US grows more protectionist
• EU Expansion and Change in Commission
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Canada Needs To Be a Leader
• A highly trade dependent sector in a highly trade dependent country
• Seek opportunities for the future – build on Canada’s competitiveness and innovation – look out, not in
• CAFTA and its members have an important role to play
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Canadian Agri-Food Trade AllianceSuite 1403 150 Metcalfe Street
Ottawa, Ontario K2P 1P1
Tel: (613) 560-0500 Fax: (613) 233-2860
www.cafta.org Email: office@cafta.org
Liam McCreery, President
Patty Townsend, Executive Director