By Dow Jones Business News, October 18, 2013, 05:36:00 PM EDT
By Phil Franz-Warkentin
WINNIPEG--A free-trade deal reached in principle between Canada and the European Union, announced October 18, will
open the door for increased exports of Canadian agricultural products to the EU, which was seen as good news by many
Canadian trade groups. However, the door swings both ways, and the likely increase of European imports could hurt some
domestic agricultural sectors.
Full details of the deal are still forthcoming and the actual agreement will take another two years before
ratification. Canadian provinces and individual European governments also need to sign off on the Comprehensive Economic
"The European Union is one of the world's most important markets, and continues to be a key market for western
Canadian grains and oilseeds," said Wade Sobkowich, Executive Director of the Western Grain Elevator Association in a
release. "While the EU is already a major destination for agricultural products, strengthening our economic ties with
the Europeans will further increase market access, clearly benefiting farmers, the grain sector, and the broader economy
in western Canada," he added.
"This deal is hugely important for western Canadian grain farmers," says Levi Wood, President of the Western Canadian
Wheat Growers Association in a release. "Not only will we see improved market access for grains, but it will also be of
substantial benefit to the beef and pork sector. Canadian cattle and hog farmers are major customers of our grain."
The agreement will significantly reduce and eventually eliminate tariffs on a wide range of grain exports, including
wheat, said the Wheat Growers. In recent years, Canadian exports of durum and high-protein wheat have entered Europe
duty-free, but the EU maintains the right to impose tariffs (as much as 90 euros a tonne on wheat, or about $120) under
existing trade rules. The CETA would see these tariffs reduced to zero over a seven-year period. The tariff that now
applies on Canadian exports of low-protein wheat to Europe would also be eliminated over a seven-year period.
Ending these tariffs creates trade certainty and greatly lessens the risk of future protectionist trade action.
Canadian canola farmers were also supportive of the trade deal. "By lowering oil tariffs, the exports of Canadian
canola oil to Europe will increase in value by approximately $90 million, creating new demand for canola seed to feed
our expanding oilseed crushing capacity," said Rick White, General Manager of the Canadian Canola Growers Association in
Beef and pork exporters will also benefit from increased access to Europe, according to their industry associations. "
The removal of longstanding barriers in this agreement, such as high tariffs, finally enables Canadian beef producers to
benefit from the high value that the European beef market represents," Canadian Cattlemen's Association president Martin
Unrau said in a release. "We are confident that the remaining technical barriers with the EU will be resolved, and we
look forward to continuing to work with the Government of Canada in this regard."
While those exporting to Europe will likely benefit, the Canadian dairy sector has expressed concern over news that
the agreement will raise the quota on how much European cheese can be imported to Canada. "Dairy Farmers of Canada is
angered and disappointed with this news as the reality is that Canada would lose its small, artisan and local cheese
makers and a world-leading industry with top quality products--within a short time frame," said the group in a news
The National Farmers Union also expressed concern over the perceived sell-out of the agreement. "The devil is always
in the detail, which this government has never disclosed," said Terry Boehm, President of the National Farmers Union in
a release. "We do know from leaked draft texts and from the EU's similar agreement with South Korea that CETA is
essentially a 'Corporate Bill of Rights.'"
"We are witnessing the destruction of our autonomy as farmers, governments and citizens. Local food systems will be
severely restricted. [Prime Minister Stephen] Harper's negotiating tactic allowing increased importation of European
cheeses will have negative effects on dairy farmers. As well, the increase in beef exports to the EU is a red herring--
we have not filled existing export quotas for hormone-free beef to this point," Boehm added.
Source: Commodity News Service Canada
Write to Phil Franz-Warkentin at firstname.lastname@example.org
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