Thank you very much, and good afternoon.
I appreciate the opportunity to speak to you today about the impact of the Canada-EU free trade agreement on Canada's agri-food sector.
CAFTA, as many of you know, is a coalition of national and regional producer groups and industry associations that support an open and transparent international trading environment for our agri-food products. Collectively, CAFTA members, which include the Canadian Meat Council and the Canadian Cattlemen's Association, export about 80% of Canada's annual agri-food exports.
On October 18 of this year Prime Minister Harper and European Commission president Barroso announced that they had reached, after five years, an agreement in principle on the CETA. This is welcome news to Canada's agri-food exporters.
The Canada-EU CETA, when implemented, will be Canada's most significant free trade initiative since the NAFTA. The CETA is the broadest trade negotiation Canada has ever undertaken. It covers a significant range of issues, including tariffs, non-tariff barriers, services and investment, financial services, government procurement, and much more. As well, for the first time in the history of Canada's trade deals, the CETA covers issues that fall within the jurisdiction of provincial governments, leading to Canada's 13 provinces and territories having played a significant and important role during the negotiation process.
The CETA offers tremendous potential for Canadian agriculture producers and food processors. Today Canada ships just $2.4 billion in agriculture and food products to the EU's 28 member states. While $2.4 billion may seem like a big number, given Canada's expertise and standing in agriculture and food production and given the EU's standing, with 500 million people, as one of the largest consumer markets in the world, Canada's exports really should be much higher.
We believe the CETA, when completely implemented, could result in $1.5 billion in new Canadian agri-food exports to the EU. This will include $600 million in new beef exports, $400 million in new pork exports, $100 million in grains and oilseeds, $100 million in sugar-containing products, and a further $300 million in processed foods, fruits and vegetables, and biofuels products.
When it is implemented the CETA will eliminate immediately tariffs on almost 94% of Canada's agri-food exports to the EU, and over time will eliminate tariffs on virtually all products except beef and pork. For some grain products where tariffs are not immediately eliminated, they will be phased out over a period of about seven years, and in the case of beef and pork, which are particularly sensitive to the EU, Canada will be granted duty-free import quotas that provide Canada with preferential access over its competitors.
Contributing to the CETA's value, the negotiations have gone beyond tariffs, taking on a wide range of non-tariff issues critical to Canada's agriculture and food exporters. The CETA has included discussion in areas such as technical barriers to trade, sanitary and phytosanitary issues, regulatory cooperation, and export subsidies. These issues can be the most significant barriers facing agriculture and food exporters today, and until now have significantly impacted exports of Canadian agri-food products into the European market.
The CETA has established mechanisms that will promote cooperation and discussion on regulatory issues and non-tariff barriers that impede trade. Through the CETA, Canada and the EU have also committed to work together to advance a number of non-tariff issues, including approval of meat processing facilities and timely approval of biotech traits. These and other issues still need to be more fully resolved before the CETA is implemented, but we are confident that the Canadian government is committed to doing that.
CAFTA and its members have worked very hard to encourage the federal and provincial governments to negotiate a trade deal that benefits Canada's agri-food sectors. We believe the CETA is that deal. The CETA secures real and substantial access to one of the world's few billion-dollar export markets, and it does so ahead of our major competitors.
Through the CETA, Canada has confirmed its support for farmers and for food processors, and Canada has let the world know that we are serious about trade.
There are many details to be sorted out before the CETA is signed, and CAFTA will continue to support the federal and provincial governments as they work on these and bring this deal to a close.
Thank you very much.