Good morning.
Thank you for the invitation to appear before the committee and for your continued attention to the international market access for Canadian pork.
My name is Hans Kristensen. I am a producer from New Brunswick and the Maritimes' representative on the Canadian Pork Council's board of directors. As part of my responsibilities as a CPC director, I also sit as a director on Canada Pork International.
The roles and responsibilities between the CPC and Canada Pork International complement each other. Through public policy outreach, the CPC advocates for reasonable legislation and regulations both domestically and internationally to develop market opportunities for Canadian producers. Canada Pork International steps in once market access becomes feasible and promotes Canadian pork in foreign markets.
The last time we were here to discuss debt in the agriculture sector and its effects, we outlined how the pork sector relies on exports and how the relationship between market access and the economic stability of our industry are so closely connected. I'm certain by now you are familiar with the impact the Canadian pork industry has on the Canadian economy. It's a good story that needs to be told. In 2016, we exported over one million tonnes of pork and pork products valued at over $3.2 billion to 90 different countries. The pork sector relies on exports. In fact, more than two-thirds of the hogs produced in Canada are exported. Over the past decade, due to the hard work of the entire industry and this government, we have expanded to become the third largest exporter of pork in the world. This expansion supports not only hog farmers, but also provides thousands of jobs in rural and urban communities alike.
The pork industry has always been interested in eliminating trade barriers to our exports and improving access, whether import barriers, or unfair sanitary or regulatory measures, or legitimate tariffs. We work hard to remove measures that hamper our exports. It should not be surprising, therefore, that the meat sector is an ardent and steadfast supporter of all initiatives that contribute to not only the opening, but equally vital, the maintenance of existing export markets.
The Canadian Pork Council is pleased federal legislation to implement Canada's rights and commitments under the Canada-EU comprehensive economic and trade agreement, Bill C-30, was granted royal assent on May 16. The CPC has followed developments with great interest since the October 2008 Canada-European Union summit to explore an economic partnership. Europe is the last important pork-consuming region in the world to which Canada currently has little effective market access. It is limited by very high tariffs and onerous import administration rules. The EU is one of the world's most protected import markets for meat. The new zero-tariff access for pork granted under CETA and much improved quota administration rules provide unique access for Canada and an advantage in the future over U.S. exports should a deal be worked out between the U.S. and the EU.
One of the non-tariff barriers hampering access for Canadian pork exports to the EU is the requirement that imports of fresh, chilled pork undergo costly and burdensome testing requirements for trichinae. The EU testing requirements are costly and severely limit sales of chilled pork to Europe. The EU also requires that a health mark label be applied to all boxes of meat exported to the EU. The label is intended to ensure traceability of the product to the producing establishment and to provide a visual means of determining if a package has been opened. The Canadian Food Inspection Agency's current interpretation of the EU requirement makes it extraordinarily difficult, if not impossible, for Canadian pork processors to meet this requirement. Over the past two years the industry has raised its ongoing concern about the health mark label with both Canadian and EU officials. Notwithstanding constant assurances that the issue is being worked on by officials in Canada and the EU, it would appear that little if any progress has been made to resolve the issue.
As important as trade agreements are, they constitute only one component of trade in pork products. The removal of import quotas and tariffs is only of value if it is possible to overcome also the myriad of associated technical regulations and requirements. The meat industry works very closely with the market access secretariat of Agriculture and Agri-Food Canada, the CFIA, Health Canada, and Global Affairs Canada on the endless task of addressing these impediments. These departments need the flexibility and a full team with the financial backing to efficiently address market access issues. There is work to be done to better capitalize on existing access.
When a country places a barrier to trade, our industry has to ask if we can overcome that barrier, and at what cost to our industry. The cost of compliance can sometimes deter operations from implementing the process or technology that allows CFIA to certify that the product or establishment comply for all products destined for the desired market...are erroneously expensive.
However, in some cases, a country's expectation or high barrier for import has benefited our industry, such as with Japan. Pork exports from Canada to Japan have been a major success story, and this has led to a strong trade relationship that has benefited both countries. The Canadian pork sector has a long history of trade with Japan that goes back more than 40 years since the first shipment of pork left Canada destined for Japan.
The Japanese market is very demanding on the safety of products and requires a high level of food safety and certification from its importers. These requirements have enabled the Canadian pork industry to develop some of the highest quality food programs and food safety programs in the world, such as the Canadian quality assurance program. These programs assist the industry in accessing Japan and other international pork markets. It can be said that the Japanese influence on the Canadian industry has also led us to be better producers and better exporters.
I must take a moment to point out that Canada is currently Japan's second largest country supplier of pork after the United States, and we believe there is still room to grow our sales. A trade liberalization agreement between our two nations will provide a big boost for our industry.
Another example where a non-tariff barrier is restrictive and the industry has decided to meet the country's requirement is the use of ractopamine. Ractopamine is a product approved for use in animal feed in over 25 countries, with an additional 75 countries allowing for the importation of pork that has been fed ractopamine, even though it is not allowed to be fed in their domestic herds.
In July 2012, the Codex Alimentarius Commission voted to approve an international standard that set the maximum residue levels of ractopamine as a feed additive, thus recognizing the product as safe for use in pork and beef production, yet markets such as the EU, Russia, China, Taiwan, and Thailand refuse the importation of meat where the product has been in contact with ractopamine.
As a result of this, the Canadian ractopamine-free pork certification program was launched in April 2013. This was in response to Russia's requirements banning the importation of meat from hogs that have been fed or even exposed to ractopamine. The Canadian Pork Council worked closely with the Canadian Meat Council, the Animal Nutrition Association of Canada, Canada Pork International, Elanco, and the CFIA to develop the program. The certification program was implemented throughout the pork value chain, including feed mills, producers, and live animal transporters, as well as slaughter, processing, and storage establishments.
Our industry is forgoing the benefit of using this product and has voluntarily implemented a national program to ensure that pork products meet import requirements of our clients for the ractopamine program. Our industry decided to stop using the product so we can increase the flexibility of accessing markets. That flexibility and that market access comes at a cost, but it also places our industry at risk.
For example, recently, Chinese testing of a shipment of pork from a specific establishment in Canada detected ractopamine residues. Canada's pork industry takes this detection very seriously, and we want to assure our Chinese customers that our country and our industry is dedicated to providing their consumers a ractopamine-free product. The CFIA has suspended exports of pork to China from the establishment. Product en route to the Chinese market from this specific establishment is also being recalled, and the plant involved will not ship until further notice. Our industry partners are working with the establishment involved, as well as with Canadian government officials, to clarify this incident and take the proper corrective actions.
The industry is confident in the integrity of the Canadian ractopamine-free pork certification program. The Canadian pork industry values its relationship with China and looks forward to continuing a strong trading relationship.
I thank you again for the opportunity to speak this morning on behalf of the industry.