Evidence of meeting #34 for International Trade in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was beef.
A recording is available from Parliament.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
You talked about having discussions. Is that one of those non-trade barriers?
Director, Government and International Relations, Canadian Cattlemen's Association
It's probably more on pork.
President, Canada Pork International
We have to be very careful here, because the primary buyers of frozen Canadian pork are the Japanese ham and sausage manufacturers. We have to strike a delicate balance, because if the ham and sausage manufacturers of Japan cannot get enough supply at the right price, they will de-localize and move their operations to China. We will lose big-time. So we will have to maintain a vibrant processing industry in Japan. It's a very delicate balance here.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
You've had your discussions. You can't disclose them, but is there some sense that they knew that particular hurdle might get crossed over?
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
I mean being able to get access to further value-added.
President, Canada Pork International
That's why I said it's a very delicate.... We are not there yet in our consultations.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
On the negative impact of that to both of your industries, do you have any idea what it would mean if you had access to the further added, rather than...? I don't want to diminish what you've said about their requirements or needs being for high-value-added products.
Mr. Masswohl and Mr. Pomerleau.
Director, Government and International Relations, Canadian Cattlemen's Association
I don't know if we've broken it down by each barrier what they would add, but if we eliminated all of the barriers and the tariff.... We did $66 million this past year, which was down a bit from $86 million in 2010. We think the potential for beef is in the range of $250 million to $275 million. That's what we could be doing. So we're talking about quadrupling what we could do.
President, Canada Pork International
In our case, even a small change in the current duty could land us with an extra $100 million pretty quickly, but we are targeting much more than that. We could double in value our exports to Japan if we were to have a very comprehensive agreement.
NDP
Don Davies NDP Vancouver Kingsway, BC
Thank you, Mr. Chairman.
I want to explore the non-tariff barriers, because those are at least as big a problem as the tariffs, I am led to believe. I wonder if each of you, from your perspective, can explain to us what the major non-tariff barriers are. Then I'm going to follow up with a question on food safety.
So what are the non-tariff barriers that you face with Japan?
Director, Government and International Relations, Canadian Cattlemen's Association
The non-tariff barriers would include the age restriction with the SRMs, and it's basically that they're not fully in compliance with the international standard of how you treat countries that are a controlled risk for BSE. That's the primary one. The other one would be the approval of the further processing facilities. Also, of course, there's the safeguard, which is a kind of tariff, but it's like a non-tariff, as opposed to what tariff you get. It's the unpredictability of knowing what your tariff will be if you reach a certain trigger point.
President, Canada Pork International
In our case, we're doing very well in Japan already. We can say that we don't really have technical barriers, except maybe in the processing, but even in the processing we'll have to be careful to strike a balance. But basically no, it's really the gate price and the pork import regime structure by itself.
NDP
Don Davies NDP Vancouver Kingsway, BC
I understand—we keep hearing it over and over again—that Japan has very high safety standards, particularly around food.
I know, John, that when we met the other day we talked about how if they find even a sliver of bone in a box of boneless beef, they can and do reject it. That's a problem for our producers, because I'm led to believe that just about every box we send them has some sliver in there. I take it that this is related to the BSE, to their safety standards.
Can you describe the health and safety standards in Japan? Are they higher than they are in Canada? What do you see being required to be done in that area if we're to arrive at a deal that sees more of our products getting into Japan?
Director, Government and International Relations, Canadian Cattlemen's Association
I think the 21-month rule is a perfect example of that. Japan is the only country that has set a 21-month age limit. The reason they did that is that they believed they had two cases of BSE from cattle that were 21 months old. It was difficult, in that those cases were not confirmed by the World Reference Laboratory for Foot-and-Mouth Disease. It would be very unusual that an animal that young was confirmed with a case of BSE, but there was no physical way to confirm it.
I would say it's that over-sense of caution they have. And why do they do that? Is it for caution? Is it for trade-restrictive reasons? I guess people can make their own judgment call on that. But it does take time. Over time, we're hopeful that we're going to get beyond that particular restriction.
NDP
Don Davies NDP Vancouver Kingsway, BC
Prior to that, John—before Jacques answers—before the BSE issue happened, did they have any age restrictions?
Director, Government and International Relations, Canadian Cattlemen's Association
No.
President, Canada Pork International
Their standards per se are not that much different from ours. As a matter of fact, they're very much the same, but the expectations of the consumer in Japan are much higher, because in the past they've had incidents related to food safety. The public there, let me tell you, is much more concerned about food safety issues than anywhere else we know of. That's why we have our importers always asking for extra treatment. It's just to reassure their buyers and distributors.
Keep in mind that in Japan you have something like 1,200 retail chains of supermarkets. In Canada we have five or six, not 1,200. You also have five different levels of distribution. Everybody wants to be reassured at every level, so they go the extra step, and that's why it's more demanding. But at the same time, you learn a lot, let me tell you. It's a good training ground.
