Thank you, Mr. Chairman, and thank you very much to the committee for the opportunity to present here in front of you today on an issue that's of great importance to our industry: bilateral free trade agreements generally, and the one that Canada is negotiating with Colombia specifically.
I'm very pleased today to have with me Mr. Greg Simpson from Simpson Seeds in Moose Jaw, Saskatchewan. He's a seasoned veteran of this industry, and I'm going to ask him to make a few comments more specifically related to Colombia just a little bit later.
Pulse Canada is the national industry association for the pulse crop industry in Canada. We represent growers, processors, and exporters of pulses and special crops here in Canada. We work generally on market development, but we also deal with market access-related issues for our industry here in Canada.
The pulse and special crops industry here in Canada exports about 70% to 75% of our products to about 150 countries around the world. Those exports average about $800 million per year. Last year, in 2007, they exceeded $1.25 billion, so given the importance of exports to our sector, maintaining competitive access to international markets is extremely important for us.
The pulse industry has had a keen interest in bilateral free trade agreements since about 2004. That was the time when some of our competitors, in particular the U.S., embarked on a very aggressive campaign to pursue bilateral free trade agreements with key countries that were key markets for Canadian pulses.
We've been supportive of pursuing strategic bilateral agreements for quite a while now. For us Peru, Colombia, Dominican Republic, and Morocco rise to the top of that list. We were very pleased to see Canada launch negotiations in 2007 with Colombia, Peru, and Dominican Republic.
In FTA negotiations, we seek tariff elimination under the fastest possible timeframe. That's really what our goals are for pulses and special crops, but at a very minimum it's very important that we at least have access parity--that we negotiate an access that's at least as good as what our competitors negotiate--to ensure that we don't become uncompetitive because of preferential tariffs.
Overall, Colombia is Canada's seventh-largest market for pulses and special crops, averaging about $42 million per year in exports. In 2007, export value was about $57 million; overall, in agriculture and agri-food exports to Colombia, pulses ranked second behind cereals, so it's a very important market for us. But if we look more specifically at individual products within the pulse and special crop category, the importance of Colombia becomes even more apparent: Colombia is either Canada's first- or second-largest market for green lentils, with about $37 million worth of exports in 2007; we export about $15 million worth of dry peas to Colombia; Colombia is Canada's sixth-largest market for canary seed; and Colombia is a top-five market for Canadian chick peas.
In terms of the impact of competitors' agreements on our industry, the U.S. agreement negotiated with Colombia gives U.S. pulses preferential access. It gives them tariff-free access for an unrestricted quantity of peas, lentils, and chick peas, and for some special crops as well. For beans it provides for a tariff rate quota system that will progressively increase U.S. access to Colombia over about 10 years.
What does that mean for the competitiveness of Canadian products? Well, it means that Canadian products will face about a 15% tariff disadvantage for peas, lentils, chick peas, and canary seed. As an example, for lentils that are worth around $1,000 per tonne or more, a 15% tariff disadvantage works out to about $150 a tonne. In a business in which a few dollars a tonne really matters and sometimes determines who does the business, obviously a 15% tariff disadvantage will shut Canadian products out of those markets.
While committee members, I understand, have travelled to Colombia and heard comments from Colombia's perspective, I want to share just a few comments that we've received back from Colombia.
We had a seminar and some meetings in Colombia in 2006 with importers. We found that the Canadian delegation was confronted by quite angry Colombian pulse importers. Their anger was directed at us and at the Canadian government because of, at that time, a lack of movement on a negotiation with Colombia; as importers, Colombians benefit from having equal access for pulses relative to other pulse-producing countries, and they're desperately interested in continuing to have access to Canadian product. This ensures that there's market competition within Colombia and ensures that they have competitive access to the products they need.
Will Colombian citizens benefit? Yes, absolutely: with pulses being an important protein source for people throughout the world, lower tariffs have the potential to provide food at lower costs.
In summary, I would say we're looking for three main objectives out of a Canada-Colombia free trade agreement. First off, we can maintain tariff parity access with the U.S. and other competitors to ensure that the Canadian industry is not placed at a disadvantage relative to our competitors. This is an absolute must for this agreement with Colombia and for any other FTA that we negotiate, and I understand that other agriculture sectors have provided similar comments and have a similar position on that.
Second, we can also regain parity with other countries for beans, rather than face a 60% tariff disadvantage relative to Andean countries. A Canadian agreement can help to secure and regain tariff parity for a market for small red beans in Colombia.
Third, lower tariffs reduce the cost of food and of products for importers and consumers; when we are talking about certain price-sensitive commodities such as canary seed, for example, that's particularly important in helping to encourage additional demand.
I'll ask Mr. Simpson to make some comments specifically about the Colombian market. He's been involved there for nearly 25 years and has specific expertise there.