Good afternoon, everyone.
I'm the executive director of the Canadian Meat Council, based here in Ottawa. Thank you for inviting me here to speak about your study on the Canada-EU Comprehensive Economic and Trade Agreement and the effects it will have on Canadian agriculture.
Canada's meat processing industry adds value to the live animals born and raised on Canadian farms, providing a critical market outlet and supporting the viability of thousands of livestock farmers. With annual sales of $24 billion, beef exports of $1.2 billion, pork exports of $3.2 billion, horsemeat exports of $90 million, bison exports of $5.7 million and 68,500 jobs, the Canadian meat industry is the largest component of this country's food processing sector. We believe that when implemented the CETA will permit a major increase in Canadian meat exports to the European Union.
The 28-country European Union, with a population of 500 million people, is the world's largest import market for agricultural commodities and food. However, a number of consumer-oriented products, including meat, face significant tariff and non-tariff barriers into the EU. We do recognize and greatly appreciate the steadfast and unwavering effort that was invested by Canada's negotiators in their endeavour to ensure a commercially viable outcome for Canada's meat industry. We would ask that the Canadian and European governments move forward quickly and simultaneously on both the ratification of the agreement and the prerequisite resolution of the outstanding technical barriers to trade.
When fully implemented, the agreement provides for duty-free access of 81,000 tonnes of Canadian pork, 65,000 tonnes of Canadian beef and veal, 3,000 tonnes of Canadian bison, and unlimited duty-free access of Canadian horsemeat and Canadian prepared meats into the European Union. In return, the European Union will retain duty-free unlimited access to the Canadian market for pork, they will obtain duty-free unlimited access for beef into Canada, and receive reciprocal unlimited duty-free access for prepared red meat products covered under chapters 16 and 19 of the Customs Tariff — Schedule. In addition to the agreement on import quotas and tariffs, the CETA outcomes include a critically vital commitment to resolve technical barriers.
While our initial hope for completely open, duty-free, and unlimited trade in meat products between Canada and the EU was not achieved, the CETA does represent a very substantive, valuable, and most welcome movement in that direction. Compared to an average value of only $54 million of meat exports to the EU during the past three years, the results of the CETA negotiations will offer export opportunities, with a potential annual sales value of up to $1 billion for Canadian processors of meat.
Although we have not yet seen the text of the agreement, we understand that it changes the nature of the currently protected trademarked names. Three companies currently own trademarks for meats in Canada: Parma design with the crown, San Daniele, and Szegedi Salami. These companies may lose the exclusive right to use their trademarks and would have to coexist with European meat. We strongly urge the government to address this issue in the context of the final technical discussions of the agreement.
Canadian manufacturers of prepared meats are concerned with the concessions on geographical indications given to the EU and they’re concerned that there may have been no reciprocity in the generic and trademarked geographical indications. We understand, for instance, that Canadian negotiators rejected protection of the Czech term for Budweiser beer because of the conflict with the existing trademark.
It is important for the Canadian meat industry to be informed of the specific wording related to geographical indications before the agreement is finalized. We particularly want to ensure that European-origin products cannot be marketed as superior to existing Canadian products solely by virtue of their European origin. EU exporters should be restricted from predatory marketing that would undermine consumer confidence in Canadian products that for generations have used common descriptors, whether generic or trademarked.
The federal government has committed to monitor impacts of the CETA on Canada's dairy industry and, if needed, provide compensation should a negative impact be observed.
These meat companies may lose their trademarks for products estimated to have an annual retail sales value of over $25 million. However, of greatest importance to us as meat processors is the so-called Exchange of Letters between Canada and the European Union concerning meat issues. In that document, Canada and the European Union share a commitment to the determination of equivalence of their respective sanitary measures and stress the importance of finalizing negotiations to facilitate trade in meat and meat products. Both sides agree to review progress made after one year. For example, the European Food Safety Authority published its opinion in July 2011 that it was safe to use 2% to 5% lactic acid as a beef carcass rinse at temperatures of up to 55 degrees Celsius. It took the European Commission until February 2013 to approve its use. We in North America have been using these lactic acid rinses on beef carcasses, now to control E. coli O157:H7, for many years. Beef processing facilities can't risk turning off their food safety interventions.
Another issue, yet unresolved, is the use of recycled hot water. As an example, the European Food Safety Authority published its opinion three years ago that recycled hot water is, indeed, a suitable decontamination technique under certain conditions. Many meat processing facilities in Canada do recycle and filter their water for reuse for good environmental and energy conserving reasons. We hope that issue will soon be also resolved and approved in Europe.
Finally, only establishments listed by the EU may export edible meat and meat products to the European Union. The product must be kept at all times in an EU-approved establishment in order to maintain its eligibility to be exported to the European Union. And there are several conditions that the EU places on meat establishments that are different from Canada. For instance, wooden pallets may only be used in areas of the establishment where products are fully packaged. The use of wooden pallets in rooms where exposed meat is present must be phased out. Exposed meat must be stored in a separate room from packaged meat, unless stored at different times. And for pork, for instance, skeletal meat must be tested for Trichinella in a certified laboratory, adding great expense to a virtually non-existent problem here in Canada.
That's why we recommended to the House of Commons Standing Committee on Finance, in their pre-budget consultations for 2013, that Canada should create a new five-year, $10-million CETA meat program to help Canada's meat-processing industry comply with the European Union's meat import requirements, which are onerous and prescriptive. A CETA meat program to help Canada's meat-processing industry comply with the European Union's third-country meat directives could be funded through Agriculture Canada's Growing Forward 2 program.
That, indeed, would really help us to be ready to grasp this incredible opportunity that certainly has been described as a once-in-a-lifetime opportunity.
Thank you very much.