As concerns frozen potatoes, I don't need to name the large Canadian companies in this sector, because you already know them. Canada is very active on this market as well, and Canadian potato farmers count on this market, especially the frozen french fry market. If the agreement is signed, tariffs on frozen potatoes from the United States will be eliminated immediately, whereas the tariffs on Canadian potatoes will be eliminated gradually, reaching zero in year 10 of the agreement. This market could potentially be attractive for Canada, but you will understand that over the next 10 years, the United States will have a major competitive advantage in the potato sector, and so this is not a major gain for Canada.
As concerns products in the bean category, whether dry or canned beans, the tariffs on U.S. products will be eliminated immediately. Similarly to the two sectors I have just mentioned, the tariffs on Canadian products will be eliminated at the end of the 10th year of the agreement.
So if we do business with Peru, there is a risk that Canadian products will be replaced by American products for the next 10 years because of the competitive advantage. American producers will not have to pay this tariff from the outset. We thus risk losing our market in the three sectors I have just discussed.
In general, the reduction of Canadian tariffs will take four years longer than U.S. tariffs. Therefore, there is a risk that American products will replace Canadian products on the Peruvian market.
Aside from the tariff reduction issues, there are two other important conditions that must also be monitored. As concerns the preference matching provisions for the U.S.-Peru Free Trade Agreement, Canada did not receive the same commitment as the United States. So Peru could give priority to U.S. products with no possibility of recourse for us, but Canada was not given the same commitment concerning our products. So there again, you can see that the tariff treatment is different.
There is a Peruvian agricultural price support system to protect Peruvian markets from imports. In the case of U.S. products, this Peruvian legislation does not apply at all, whereas Peru could implement a price ban system on Canadian products for the duration of the agreement.
Here again, we did not receive a similar commitment to that given to the Americans. I could come back to the example of potatoes. If their imports affect the local Peruvian potato market, Peru does not have the right to implement its price ban system to prevent the entry of American potatoes. But if the same potatoes came from Canada, Peru could apply its price ban system to prevent them from entering. So this provision could be detrimental to some of our exports.
In general, the agreement does provide certain access guarantees to Canada for wheat, barley and pulses. The Canadian Federation of Agriculture recognizes that the export volume to Peru is not very high, but for the products concerned, it is nonetheless significant.
In closing, I will repeat what I said in my introduction. Should Canada sign this agreement with Peru, it must be ensured that in future bilateral negotiations with other countries, Canada achieves parity with other trading partners who are important for us, like the United States. Otherwise, our products and our producers are at risk on these markets.
This will be my last comment concerning the draft agreement with Peru.