Thank you, Mr. Chair and committee members.
Thank you for the opportunity to present to you today. My name is Claire Citeau and I am the executive director of CAFTA, the Canadian Agri-Food Trade Alliance.
As you know, CAFTA is the voice of Canadian agriculture and agri-food exporters, representing the 90% of farmers who depend on trade, as well as the ranchers, producers, processors and agri-food exporters who want to grow the economy through better access to international markets. This includes the beef, pork, meat, grains, cereals, pulses, soybean, canola, sugar, malt, and processed food industries. These sectors represent 90% of Canada’s agri-food exports and support about a million jobs in urban and rural communities across Canada.
A few short months ago, just as the pandemic shutdown was beginning, I spoke at an event where I said we were worried that Canadians took free trade for granted. Today, I am here to say it’s more important than ever that we not take trade for granted.
First, on Canadian agri-food exporters feeding Canada and the world, I will give you a brief overview of where CAFTA and our membership stand.
With most of the world on lockdown, it has become crystal clear just how foundational agri-food trade is for our economy and way of life. From feeding people here and abroad to the critical role global agri-food supply chains play in supporting jobs, the term “essential service” doesn’t even begin to describe how vital farmers, food manufacturers and others are to a world in crisis.
Canada’s export-oriented agri-food sector feeds our families and families around the world. Canada has become an agri-food powerhouse precisely because we have specialized in making products that the world wants and needs.
In all this, CAFTA remains focused on advancing trade liberalization and ensuring that the voice of our exporters is heard. That’s why we’re pleased to be speaking with committee members today.
For our members, it is a mixed bag. Grain farmers continue to operate more or less as normal and face headwinds of rising non-tariff barriers with market access issues in various markets. Demand is strong for some grains, although the impact of massive U.S. subsidies for corn and soybeans adds to the anguish over a long list of issues. Pulse demand is high and prices are up. “Normal” also means that our canola exports are still blocked by China, and pulses and durum wheat continue to face trade barriers in key markets such as Italy, Peru and Vietnam.
There are increased costs and absenteeism in food manufacturing and questions about the future of the restaurant industry. It’s a very hard time for hog farmers and cattle producers with backlogs of livestock growing.
For all, there is anxiety, uncertainty and challenges in unprecedented ways, whether it is canola, malt, soybeans, feed or even sugar, which food processors rely on.
Despite the crisis, those in the agri-food supply chain are a resilient bunch. However, we are concerned about one thing above all: the fear that this crisis will bring about new trade barriers and other forms of protectionism, and that rules and trade commitments that have been made will be undermined and not followed. I worry about the talk of self-sufficiency in food and nationalism, and I fear it will lead to a new form of protectionism in the name of “precaution”.
I want to acknowledge the leadership role Canada is playing to keep agri-food trade open. First, we’re very grateful that the Canada-U.S. border has remained open for trade. We have no more important partner than the U.S. Agri-food is especially reliant on inputs, ingredients and labour from the U.S. Our integrated supply chains remaining functional is one of the reasons grocery stores stay full today. The implementation of CUSMA will help ensure a continued strong foundation for trade with the U.S., and we are eager to see this agreement enter into force as quickly as possible.
On the issue of safeguarding rules-based trade, in recent weeks we’ve also been grateful for the leadership role the federal government has played in keeping global agri-food supply chains open. We have welcomed commitments to keep trade lines open and oppose export restrictions to help maintain resilience and avoid disruptions in the production and distribution of food. We know that supply shortfalls are best addressed through the unfettered flow of products and increased production. Essentially, in these dire times, more trade is needed, not less.
CAFTA is pleased that the federal government has been at the forefront of efforts to safeguard the WTO and the rules-based trading system. There is a new interim appeal mechanism, which is also very positive and which returns some certainty to the global trading system. We are hopeful that the appellate body will soon be restored.
When the threat of the pandemic subsides, our entire industry stands ready to work with the Canadian government to demonstrate that free trade needs to play a central role in helping economies return to full speed.
In fact, embracing unfettered trade in agri-food should be central in the plan to reboot Canada's economy. People around the world will continue to need to eat, and agri-food trade gives us one of the best engines for growth. Trade will be vital, but only if we limit protectionism and bolster international co-operation.
In all this chaos, Canada has a unique opportunity to find bold new ways for international trade and agri-food trade. The federal government is well positioned to take us there and help reach the goal of $75 billion in agri-food exports by 2025, as identified in the Barton report.
Canada's government should also champion regulatory modernization. The economic round tables singled out the need to update domestic regulations and bring them in line with other jurisdictions.
Recommendations now need to be enacted. Much of what is needed is contingent upon other nations doing things to assist our export trade.
Trade in finished goods and cost-efficient regulatory processes in Canada help all links of our value chain be competitive. At a minimum, Canadian rules should evolve rapidly to support our competitiveness.
As recovery plans get developed, we want to share our ideas and work with you on actions that will give exporters confidence on a path forward.
On maximizing and enforcing rules-based trade, for us to take flight we need our existing free trade agreements to work. For example, CETA holds so much promise for agri-food exporters, yet it continues to fall short. The EU is not abiding by commitments to remove technical barriers shutting out our exports. At the end of this summer, it will be three years since the deal came into force. Our exports are flat, when they should be much higher. On the other hand, EU agri-food exports to Canada continue their double-digit increase. It's time to find solutions.
Such work includes achieving mutual recognition of meat-processing systems, developing protocols to verify livestock production practices, addressing misaligned regulation of crop protection products, more predictable and timely review of seed technologies, ensuring that country-of-origin labelling requirements are not applied in a trade-restrictive manner, and addressing illegal EU sugar subsidies that make our exports uneconomic.
Italy provides an example of where Canada needs to be more assertive in defending our trade interests. Quiet conversations have not resolved the issue to date. It's important that Canada challenge these measures, so that Italy's protectionist measures do not spill over into other countries and products.
Adding insult to injury, EU officials stress that Canadian exporters need to meet the high standards of the EU, when we're the fifth-largest agri-food exporter in the world for a good reason. We've asked the Canadian government to take up these issues with EU political leaders in order to secure commitments and timelines to remove and address the barriers that persist.
The world is moving towards the enforcement of rules. Canada should step up its response, too, and push for enforcement. India, a major market for pulses, has not followed internationally agreed-upon protocols and is not living up to its WTO commitments. Peru and Vietnam are major markets with unwarranted SPS measures that are creating significant risks and uncertainty for wheat exports. Canada needs to be proactive and nimble in its response to the growing use of non-tariff barriers to block agriculture exports.
I'll conclude by saying that the best way to support free trade is to continue to pursue new and deeper trading relationships around the world. If we do that, our export-oriented agri-food sector can help anchor Canada's economic recovery by powering ahead in global markets.
Before the crisis, our sector was growing faster than all other sectors of the economy. We believe that a strong agri-food trade sector means a strong economy and a strong Canada. Free trade has always been a key part of Canada's growth, and that will remain the case as we move ahead.
We look forward to working with all parliamentarians to advance our shared goals, which are rooted in free trade, support for the rules-based global trading system, and the belief that Canada can compete and win in the world.
Just as keeping trade open is feeding people today, embracing it tomorrow will be essential for economic recovery when life returns to normal.
Thank you. I look forward to your questions.