Thank you, Mr. Chair.
First of all, I would like to say that we apologize for not having our submission translated and therefore circulated. We had very short notice to appear before your committee today. We would like to apologize and just ask that the clerk please take the opportunity to translate it and ensure that it is circulated to committee members. I would like to say that at the outset.
The Canadian Agri-Food Trade Alliance is a coalition of associations, organizations, and companies representing producers, processors, marketers, and exporters of agricultural and food products as well as companies that supply inputs to producers. As such, CAFTA is the only trade advocacy organization that represents the entire agricultural value chain.
CAFTA's members together do about $50 billion worth of business annually, providing over 500,000 jobs in Canada. Our members account for over 80% of Canada's agricultural and food exports and for almost 60% of Canada's total farm cash receipts.
While CAFTA's members are highly dependent on international trade, we continue to be forced to compete in a market that is highly distorted by subsidies, prohibitive tariffs, and non-tariff barriers. If our sector is to make a growing contribution to the Canadian economy, we require an international marketplace that is free of these distortions. A more open trading system would result in increased opportunities for Canadian producers, processors, and exporters. Estimates of the benefits of more open trade for Canada and for the world are as high as U.S. $56 billion annually.
CAFTA's long-term objective is global free trade in agricultural and agrifood products. This will allow Canada's competitive quality food and agricultural producers to capture opportunities worldwide and return the benefits to Canadian producers, processors, and to the economy of Canada. It's important to point out that 91% of Canada's farmers are dependent on the international marketplace, either through prices set internationally or directly as exporters.
The primary focus of CAFTA is on global trade reform and the current round of agriculture negotiations at the World Trade Organization. While we support all efforts to achieve liberalized trade in agriculture, for many of our members, regional and bilateral deals in the absence of effective international trade rules can have limited benefits. Regional and bilateral agreements tend to exclude many sensitive agricultural and food products, with the result that the access deals are not equitable for the entire industry. Regional and bilateral agreements tend only to be market access agreements. They do not address the use of export and trade-distorting subsidies. The international market in agriculture and agrifood is the most distorted of any market. The increased access provided for some products by bilateral agreements forces domestically produced products onto the international market, which, as stated above, is still very distorted by subsidies and access barriers internationally.
Many sectors of our industry will only see real benefits when substantial disciplines and rules are imposed globally on all players in the international market. Therefore, CAFTA supports regional and bilateral market access agreements that build on global trade agreements.
When the international marketplace is more open and fair, bilateral agreements are effective complements. In 2004 Canada exported $2.25 billion worth of goods to Korea. Agricultural and food products accounted for just over 6% of total exports of goods in 2004. The largest export in 2004 was of wheat. Prior to the BSE crisis, beef was Canada's largest agricultural export to Korea.
Korea remains a very protected market when it comes to trade in agriculture and food products. CAFTA's members, all 15 of them, have a long list of the negative effects of this protected market. This ranges from restricted tariff rate quotas, prohibitive tariffs, differential tariffs, as well as sanitary and phytosanitary issues. These must all be dealt with in the course of a bilateral agreement in order for it to be effective.
The Canadian agricultural production, processing, marketing, and exporting systems are among the most efficient and effective in the world. We have developed and grown, even in an environment where production and trade are distorted by subsidies and tariff and non-tariff barriers. This history, combined with the quality of our products and the efficiency with which we produce them, puts Canada in an excellent position to compete and benefit if disciplines can be enforced on unfair trading practices.
CAFTA strongly believes that the best way to enhance trade with Korea and with the rest of the world is to ensure that international trading nations abide by clear and enforceable global rules. Our primary focus is on global trade reform and the current round of agricultural negotiations at the WTO. Many sectors of our industry will only see real benefits when substantial disciplines and rules are imposed globally on all players in the international market.
CAFTA supports efforts to expand trade with individual countries or blocks of countries through regional free trade agreements, but these efforts must not take resources and expertise away from the global negotiations and must build on and complement international trade negotiations and rules.
Thank you very much for the opportunity to be here today.