Okay. That should do it.
Mr. Chairman and honourable members of Parliament, thank you very much for giving us the opportunity to be here today.
First, I would like to introduce our organization, Canada Pork International, the export market development agency of the Canadian pork industry. It is a joint initiative of the Canadian Pork Council and the Canadian Meat Council. Our membership includes the national and provincial associations of hog producers, as well as federally registered pork packing establishments and trading companies.
It should be noted that more than 50% of the pork produced in Canada is exported. Canada is the world's third largest pork exporter, accounting for 20% of world pork trade. In 2009, Canadian pork exports to over 100 countries amounted to more than one million tonnes, worth $2.6 billion. Our industry is quite proud of the fact that it has been able to achieve effective market diversification. While more than a decade ago the U.S. market accounted for more than 75% of our total exports, it is now just 32% and ranks second in value behind Japan.
An essential factor for our success has been the opening of new market opportunities, whether through the Uruguay Round, which introduced us to new markets such as South Korea and the Philippines, or regional trade agreements, including the one with Mexico.
We are thankful for being given the opportunity today to express our views on a proposed agreement between Canada and the European Union. As I mentioned earlier, Canada holds around 20% of the total world's pork trade, in spite of the fact that in practice our products have yet to gain meaningful access in the European Union, the world's second largest pork market. For that reason, Canada Pork International and its members strongly support the Government of Canada concluding a free trade agreement with the European Union.
Our organization has identified the European Union as one of its highest priorities in its recently completed strategic plan. Our interest in penetrating the European Union market has greatly increased in recent years. This is due as much to interest in Canadian pork being expressed by meat importers in Italy, the United Kingdom, and several other EU member countries.
Although it is difficult to quantify the exact potential of that market at this time, we estimate that if the conditions are right, the EU could easily become one of our top ten markets, if not one of the top five.
There are three areas of specific interest to our industry that need to be included in the negotiations: first, the EU pork import regime; second, the EU pork import requirements; and finally, the EU pork export subsidies. I will just detail them here.
Of primary concern is the EU pork import regime. Following the conclusion of the Uruguay Round, the EU was very creative in its efforts to minimize foreign pork access by amalgamating all meats instead of providing minimum access for each. As a result, pork imports under EU pork tariff rate quotas represent roughly one third of 1% of total EU pork consumption. In comparison, pork imports represent more than 20% of total Canadian pork consumption and are three times larger than total EU pork imports, and that for a population of 500 million people. Still, the current EU tariff rate quotas and their administration are very complex and not conducive to sustained trade. In-quota tariffs are also very high. So Canada should be in a good position to negotiate a significant Canada-only tariff-free pork TRQ, with simplified administrative procedures in its allocation.
Several western European countries were significant markets for Canadian pork at one time or another over the years, until the EEC adopted a series of technical measures, particularly the third country meat directive, which eventually excluded Canadian pork from the EEC, later the EU. We have to remember that Canadian pork exports started with the U.K. over 100 years ago. It was our very first export market, and that's why we would like to be back there. Our major markets at the time were the U.K., France, and the Netherlands. The same measures were applied against our products when significant markets in central Europe, such as Poland, Hungary, and Romania, joined the European Union. As a result, we lost those markets in 2004.
Although the Canada-EU veterinary equivalency agreement has substantially made it easier for some Canadian pork plants to become EU approved, there are still more negotiations required to make it a true equivalency agreement. Plants that wish to meet the EU standards under that agreement still have to incur, in order to comply, significant expenses and to implement strict protocols. At this time, only two Canadian pork plants are EU approved. In fact, I could name them here: Viandes duBreton and also Aliments Lucyporc, both in Quebec, with more in other provinces considering it. But better access and fewer constraining plant registration requirements would definitely convince most Canadian plants to seek an EU registration, as it could also have an impact on other neighbouring markets.
EU pork subsidies have been restored and can apply to all markets. Canada should insist that it should at least not be used for shipments to Canada, although it's not currently used by the Europeans for shipments to Canada, but just to be sure that it isn't in the future.
It is worth noting that all the issues we have with the European Union have been well documented over the years by the Government of Canada. We wish to be closely involved in the negotiations, like we have been in the latest FTA negotiations with other countries of interest to us.
Do I have still have one more minute to cover another topic? Thank you.
Just to take one more minute of the committee's time, we wish to bring to your attention that the European Union and the Republic of South Korea have signed a free trade agreement. We expect this development will revive interest in the United States to implement the deal they completed with South Korea two years ago. Still we cannot take any chance that they will.
South Korea is Canada's fourth-largest market for pork exports, and our sales are on track to exceed $125 million per year this year. All the Korean agents of the Canadian exporters are unanimous in saying that there are very good opportunities developing for a wide range of products, but mostly for value-added products such as chilled pork.
It happens that Canada's two principal competitors on the South Korean pork market are the EU and the United States, and Canada has a very significant interest in not being left behind. Our third competitor on the South Korean pork market is Chile, and they also have an agreement with South Korea.
Our South Korean contacts made it very clear that without an agreement with South Korea, the Canadian pork industry will be almost out of that market within two years. Therefore, we urge the committee to support efforts to resume the negotiations shortly and to finalize a Canada-South Korea free trade agreement as early as possible. There is no doubt in our mind that not concluding an FTA with South Korea would more than negate any gain we could make in successfully concluding one with the EU. Both agreements are important for our industry.
Thank you very much for your time today. I look forward to answering any questions you may have.