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Trade deal between Canada and the EU gets positive reviews from agriculture sector

Alberta’s stake – or is it steak? – in the Canada-Europe Trade Agreement

Feb 5, 2014

soi_story
Prime Minister Stephen Harper and European Commission President Jose Manuel Barroso, October 18 in Brussels
CP Images

Last October, Canada and the European Union signed a tentative deal to drop tariffs on virtually all trade between this country and the 28 member states of the EU. The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) is yet to be finalized or ratified, but it already has positive reviews. Many come from Alberta’s agricultural producers.

“It’s an important step for getting us new and better access to a very large market of consumers,” says Rich Smith, executive director of the Alberta Beef Producers. And here’s why: The deal reserves 50,000 new tonnes of duty-free access for Canadian beef. That amount is in addition to the 14,950 tonne “Hilton quota,” split between Canada and the U.S., which has governed the relationship since 1997. While U.S. beef will still face a 20 per cent tariff, with CETA Canada’s portion will be duty-free. And that will reap bigger benefits than it may appear.

“We haven’t been using much of [the Hilton quota] due to competition with the U.S.,” Smith says, “but with a 20 per cent advantage, we should be able to use all of our quota there.”

Increased beef sales will create flow-through benefits for the agricultural sector. Eighty per cent of the barley produced in Alberta goes to feeding cattle and pigs, so the barley producers are happy. As are pretty much all grain growers. Canola oil is the preferred feedstock for the EU’s biodiesel industry, and the Grain Growers of Canada expects canola oil exports to Europe to increase by $90 million per year.

But CETA is not good news for all of Alberta’s economic sectors. Cheese and pharmaceuticals could suffer (see below for why). Prime Minister Stephen Harper has said the government will consider compensation for the cheesemakers and the provinces, which would
bear the brunt of higher drug costs.

Cursed are the Cheesemakers

Under CETA, Canada will now allow up to 29,000 tonnes of tariff-free cheese imports from the EU, up from 10,000. And Canada conceded to the EU on the issue of “geographic indicators” – products named for their place of origin, like Gorgonzola cheese, for example, or Feta. Those will now get protection from similar products not made in that region. Canada has not traditionally been friendly to these indicators, but 125 of Europe’s 145 “priority GIs” will now enjoy full protection. Current Canadian products are grandfathered, but new entrants will need to be identified by such modifiers as “style,” “type” or “imitation.” It is expected that winning the GI battle will give European manufacturers a significant leg up when competing with similar Canadian products.

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Biotech

Canada agreed to extend patent protection, to 22 years, on brand-name drugs, up from the current 20. The EU was asking for 25 years, but still considered the compromise a victory. “This is an important and unprecedented concession from Canada in the area of intellectual property rights,” wrote EU negotiators, in an internal document obtained by the Canadian Press. Two researchers at York University estimated the cost to Canadians from delaying introduction of cheaper generic medicines will range between $800 million and $1.65 billion each year, until the patents on new drugs expire starting in 2023.

The Top 5

Canada’s top five agri-food exports to Europe (2011)

Soybeans
Canola oil
Canola
Durum wheat
Non-durum wheat

Current tariffs

Durum wheat: $190/tonne
Common wheat: $122/tonne
Barley and rye: $120/tonne
Oats: $114/tonne

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