Thank you very much.
Good morning. My name is Jim Laws and I’m the executive director of the Canadian Meat Council, which is based here in Ottawa.
Thank you for inviting me here today as part of your review of your first report, from March 2014, on the Canada-European Union comprehensive economic and trade agreement.
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 $1.3 billion, pork exports of $3.2 billion, horsemeat exports of $80 million, bison exports of $5.7 million, and 65,000 jobs, the Canadian meat industry is the largest component of this country's food processing sector.
We believe that the CETA, when implemented, will permit a major increase in Canadian meat exports to the European Union. With a population of 500 million, the European Union is by far the largest importer of agricultural products in the world. In 2013, the 28 countries of the European Union imported agricultural products valued at $139 billion; however, many agricultural goods, including meat products, continue to confront significant tariff and non-tariff barriers.
When implemented, the Canada-European Union comprehensive economic and trade agreement will provide for duty-free exports to Europe of 81,000 tonnes of Canadian pork, 65,000 tonnes of Canadian beef and veal, 3,000 tonnes of Canadian bison meat, an unlimited quantity of Canadian horsemeat, and an unlimited volume of Canadian prepared meats. In turn, the European Union will retain unlimited duty-free access to the Canadian market for pork, obtain unlimited duty-free access to Canada for beef, and receive reciprocal unlimited duty-free access for prepared meats.
While our initial hope for completely open, duty-free, and unlimited trade in meat products between Canada and the European Union was not achieved, we welcome the movement in that direction. Compared to an average value of only $52.6 million in meat exports from Canada to the European Union during the past three years, the results of the CETA negotiations will offer export opportunities with potential annual sales of up to $1 billion for beef, pork, horsemeat, bison, and prepared meats.
In addition to the agreement on import quotas and tariffs, Canada and Europe exchanged very important side letters, which were signed in March 2014. The letters state:
Canada and the European Union share a commitment to the determination of equivalence of their respective sanitary measures, including controls on microbiological criteria, and stress the importance of finalizing negotiations on meat inspection systems, in order to facilitate trade in meat and meat products.
The letters go on to state that “our services are fully committed to giving high priority to this work in order to finalize the equivalence determination on meat products within one year”.
So that livestock farmers and meat processors may undertake investments in their businesses with confidence while preparing to take advantage of the trade benefits promised by the agreement, it is critical that the technical barriers be resolved well in advance of the CETA implementation date. Accordingly, the meat industry looks forward to a successful and early fulfillment of the commitments contained in the side letters.
With regard to the administration of the European quotas for Canadian beef and pork, our original hope was for a completely open first-come, first-served option. Although this was not the end result, we are grateful that Canada's negotiators did consult with us, and they did listen to our concern.
The consolidated CETA text in article 37, “Declarations on TRQ Administration”, includes the European tariff rate quota administration for imported beef, veal, and pork from Canada. It outlines the structure of the import licensing system, the eligibility criteria, and the securities.
It should provide the framework for the EU tariff administration that is conducive to trade. I quote:
More specifically, it must not impair or nullify the market access commitments negotiated by Parties, it must be transparent, predictable, minimize transactional costs for traders, maximize fill rates and aim to avoid potential speculation.
Another concern we had is addressed in article 7 of section 22 of the agreement, where it outlines the rules for geographic indications, defined as:
an agricultural product or foodstuff as originating in the territory of a Party, or a region or locality in that territory, where a given quality, reputation or other characteristic of the product is essentially attributable to its geographical origin;
Annex I, part A, lists the geographic indications identifying a product originating from the European Union. I count 172 names, 33 of which are classified as fresh, frozen, and processed meats and dry-cured meats.
Annex I, part B, lists the geographic indications from Canada. There are none: zero.
Article 7.6 of the agreement provides for exceptions. With regard to meat, for the term Nürnberger Bratwürste, a processed meat geographic indication from Germany, those who have been commercially using it here in Canada for at least five years prior to the October 18, 2013, can continue to use the term. Those producing it for less than five years since then have a transitional period of five years from the entry into force of the article to comply.
For another product, Jambon de Bayonne, a dry-cured meat geographic indication from France, those who have been commercially using it here in Canada for at least 10 years prior to October 18, 2013, can continue to use the term. Those producing it for less than 10 years have a transitional period of five years from the entry into force of the article to comply.
In addition, there are exceptions under article 7.6 that do not protect the translation of a specific term. For instance, the German geographic indication Schwarzwälder Schinken is protected, but the English translation, Black Forest ham, is not. So that's good.
Three companies, though, currently own the trademarks for meat in Canada—the Parma design with the crown, San Daniele, and Szegedi salami from Hungary.
Paragraph 5 of article 7.6 provides an exception for trademarks:
Where a trademark has been applied for or registered in good faith, or where rights to a trademark have been acquired through use in good faith, in a Party before the applicable date set out in paragraph 6, measures adopted to implement this Article 7
—which provides geographic indications—
in that Party shall not prejudice eligibility for or the validity of the registration of the trademark, or the right to use the trademark, on the basis that the trademark is identical with, or similar to, a geographical indication.
This effectively means that these Canadian trademark holders will have to coexist in the Canadian market with European meat products using those named geographic indications. We are concerned that this may effectively expropriate their intellectual property rights with measurable commercial harm but without any compensation.
In conclusion, we believe that, when implemented, the Canada-European CETA will permit a major increase in Canadian meat exports to the European Union, create jobs, provide higher incomes for Canadian farmers, and grow the Canadian economy.
Thanks very much. I would be happy to answer your questions.