Thank you very much, members of the committee. I'll speak for a few moments and then ask my colleague, Dan Lafrance, to say a few words about the perspective of Lantic and Rogers Sugar.
I'm president of the Canadian Sugar Institute, which is the national trade association for the refined sugar industry in Canada—that is, sugar produced from sugar beets in Alberta and from imports of raw cane sugar from developing countries, including Colombia.
We've appeared before the international trade committee a number of times on similar issues, such as with the Costa Rica FTA and the Central American four free trade negotiations. Unfortunately, our message today is the same. These agreements pose substantially more of a threat than an opportunity to our industry. We're an industry that really has embraced open trade, because we operate in an open sugar market, so I'd like to explain the difficulties we face with these negotiations.
The sugar sector is one of the most politicized and subsidized worldwide. With few exceptions, almost all governments intervene in their sugar sectors to support prices above international levels, to protect producers from import competition, and to subsidize or otherwise facilitate exports. In contrast, in Canada, sugar beet producers and cane refiners operate on the world market without subsidies, without prohibitive tariff walls, and we've been forced to adjust to the distortions on that world market. We've been reduced to just three cane refining operations in three provinces and one sugar beet producing plant in Alberta. So we're highly efficient and competitive. That forced rationalization has made us competitive in North America and globally.
The only request we have in advance of global WTO trade negotiations, the liberalization of sugar, I should say, is that the Canadian government protect the very small tariff that helps insulate our industry from world market distortions. The tariff on raw sugar is zero; the tariff on refined sugar is $30 per tonne--that's about 8%. So we're not talking about protecting a very high tariff wall, and it's certainly not a tariff that is prohibitive to importers. That tariff is very small in relation to those markets that we would like to access but cannot. The U.S. tariff, for example, is about 150%; the Colombia tariff, for example, in this context is about 20%.
We have been strong advocates of WTO trade liberalization in cooperation with a number of global developing countries, recognizing that this represents the only real opportunity for sugar reform and the only real potential for us to export, at least to get us on equal footing to those who import into our country.
Unfortunately, bilateral trade agreements are much more limited in their scope. They strive for reciprocal gains in market access but don't address the underlying market distortions in terms of domestic subsidies and export supports. For us, that paves the way for further inequity in our market.
Our logical export market is the United States, but we're confined to a minimal quota of about 10,000 tonnes. That's just 0.1% of the U.S. 10-million-tonne market. There is no opportunity to increase that quota outside a trade liberalizing agreement at the WTO. Even then, the current Doha Round is looking at protecting sensitive products, with the outcome that it's very unlikely we'll have any opportunity to increase even under an agreement that may be negotiated. So we're confined to our market. That's why any additional pressures on our market make us very sensitive.
Unfortunately, Colombia is not a logical export market for us. Certainly from a negotiating perspective it is logical that negotiators would love to seek reciprocal gains in market access, tonne for tonne. The problem is that we're not operating on a level playing field. Colombia's access to Canada is supported by subsidized credit for production, government programs that support exports. They can tap into a price stabilization fund.
Colombia is already actively competing in Canada. We're not asking to put up new tariff walls or additional barriers. They don't need the additional $30-per-tonne incentive to be competitive in Canada. They are one of our largest suppliers of raw sugar for refining, and they are one of the main refined sugar competitors in Canada, second to the United States. Colombia is one of the four most efficient sugar producers in the world and one of the largest refined sugar producers in the region.
The combination of the high efficiencies, consolidated marketing and exports, and government financial supports provides the competitive advantage for Colombia in Canada. It's also because the U.S. market is not open. Even the proposed FTA with the United States will not increase Colombia's access to the U.S. in a sufficient way. Canada becomes a market because other markets are closed.
Imports from Colombia and other more distant suppliers tend to target the more profitable retail market in Canada. Our sugar market is about 1.2 million tonnes, and about 150,000 tonnes of that is on the retail side--packaged sugar and the food service markets. Imports tend to come into that market because it's accessible and they don't have to supply industrial customers on a just-in-time daily basis.
The Costa Rica free trade agreement demonstrated the impact, and I'll let Mr. Lafrance talk to that issue. We've had no success in accessing the Costa Rica market under that agreement.
The government's own studies have shown the economic impact these FTAs will have--for example, the Central American four. Detailed studies were undertaken that predicted the closure of at least one refining operation in Canada. Exports of refined sugar from the CA-4 are about 300,000 tonnes, compared to Colombia's exports of about 700,000 tonnes.
As I've stated, Colombia is already an active competitor in Canada. The $30-per-tonne tariff is not a barrier. Since 2003, Colombian exports to Canada have ranged from $2 million to $8 million, representing about 10% of our retail sugar market. They're the second most active competitor in Canada after the United States. Colombia is more competitive than Costa Rica, which has a 6,000-tonne duty-free quota.
So we are efficient and cost-effective in the North American context, actively competing with imports, and we have nowhere else to go. In advance of a more liberalized sugar world in the North American world, and particularly the United States, we're vulnerable in these negotiations. We are urging the Canadian government to recognize this in a negotiating context with Colombia, and to ensure that this agreement protects that small tariff to continue to enable our industry to supply Canadian consumers and food processors.
Thank you.