I'll begin, and then Mike Walton of Lantic will follow.
Thank you very much, Mr. Chairman and members of the committee.
The Canadian Sugar Institute represents all manufacturers of refined sugar in Canada, and that includes sugar from imported raw cane sugar and sugar beets grown in Alberta. We have three cane refineries in Canada, in Vancouver, Montreal, and Toronto, and a sugar beet processing plant in Taber, Alberta. About 90% of the sugar in Canada is refined from raw cane sugar, and 10% from sugar beets.
The industry also has two further processing facilities that add value to sugar in Canada, and those are in Ontario, producing products like iced tea, hot chocolate mixes, gelatin, desserts, and so on. Most of those products are exported to the United States under quotas that are fixed under NAFTA.
The Canadian sugar market is an open market, so we have to compete with all the other sugar suppliers around the world. Certainly, the United States and Europe would be our two main competitors. The only protection we have from world market distortions is a $31 per tonne tariff, and depending on world prices, that's about a 5% to 8% import tariff. That's in sharp contrast to the U.S. and European Union, which have tariffs in the order of 100% or more. So we haven't got much to give up in these trade negotiations. We have more to gain in export access.
It's not surprising that given these trade inequities we strongly support trade-liberalizing negotiations for the potential they can bring to improving our export access. CETA is the first meaningful trade agreement for Canada overall to be negotiated since NAFTA. It's particularly valuable to our industry because it is a high-value market. In Europe, there's demand for the high-value sugar and sugar-containing products that our industry produces. It's also meaningful because today we have zero access to the European market for our products.
When fully implemented, a key benefit of this agreement will be to remove tariffs on Canadian exports of beet sugar. That will be gradually phased out over a seven-year timeframe, so that will certainly be of value to the sugar beet processing and sugar beet producing sector of our industry in Alberta.
Refined cane sugar, which I mentioned represents 90% of our production, cannot benefit from that tariff phase-out because it does not meet the European rules of origin. You probably heard from others attending this committee that the rules of origin have been a problem for Canada in many different sectors. For this reason we look to encourage our negotiators to obtain some specific volume access because cane sugar in Canada cannot benefit from any general tariff elimination, like many sugar-containing products, because of the sugar content of those products.
There is new access: 30,000 tonnes initial quota, growing to about 52,000 tonnes over a 15-year period, and that's important because it will build on existing investment that's already in Canada. So those value-added processing facilities I mentioned in Ontario that produce products for the United States will be able to produce more of those same products for the European market. In turn, that will benefit Canadian refineries in Ontario and Quebec because they will be supplying those further processing facilities with sugar.
Also, for many other food products, tariffs will be eliminated, but there will also be difficulty exporting because of those strict rules of origin. For those products, the government also negotiated some quotas for things like sugar, confectionery: 10,000 tonnes for chocolate and sugar confectionery, and 35,000 tonnes for other processed products such as baked goods, breakfast cereals, mixes and doughs, and so on. Sugar isn't the only input to those quotas, but certainly with more exports of further-processed products, there will be more sugar to supply. The Canadian industry is well positioned in Canada to supply food processing, so there's a mutual benefit from that.
Ultimately, we believe this will enhance the competitiveness of our food industry, which today has really plateaued in terms of exports. It's a big industry in Canada. Looking at just major sugar users in the food industry, that represents about $18 billion of sales in Canada, and $5 billion in exports—that's confectionery products, baked products, cookies, mixes and doughs, sweetened dairy products, sweetened fruit products. So it's about a quarter of Canadian exports of processed foods.
That sugar input, which is at world prices, enables those products to be very competitive in export markets, so we can't really overstate the value of this agreement in terms of facilitating that trade.
Overall, the Canadian refined sugar industry needs access to export markets, as do our customers. CETA is a critical new opportunity to diversify those markets. Today about 90% of processed foods are exported to the United States, and that trade has plateaued.
We now encourage both the Canadian and the European governments to quickly ratify the agreement—we know it will take some time—and to implement the necessary administrative mechanisms to make sure that we actually benefit from those tariff reductions.
Finally, looking ahead, CETA is also extremely important for the precedent it sets. It's not the last agreement that will be negotiated, and our industry in particular is very much focused on the Trans-Pacific Partnership negotiations. We see this agreement as sending a very important signal to those negotiations to work towards comprehensive trade deals.
Thank you.