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.
Director, Government and International Relations, Canadian Cattlemen's Association
With regard to beef for Japan, it's Australia and the United States. They have about 90% to 95% of the import market. If you put Canada and New Zealand together, you get up to about 99%. So it's really Australia and the United States.
President, Canada Pork International
In our case, it's the United States and the European Union—mostly Denmark.
Director, Government and International Relations, Canadian Cattlemen's Association
In fact we're both competitors and partners with the United States. A lot of the beef that the United States ships to Japan is from Canadian cattle that are exported live into the United States.
If we can have a free trade agreement and get in first with Japan, that gives our processing side a competitive advantage over the processors in the United States. We could actually keep some of those cattle in Canada, process more of them here, have more jobs in Canada to do the processing, and sell that beef into Japan and other markets.
Conservative
Devinder Shory Conservative Calgary Northeast, AB
Thank you, Mr. Chair.
Thank you, witnesses, for being here today.
I'm very happy to hear that our Canadian industry has been able to comply with the requirements or high demand of Japan in the pork and beef industries. Definitely, Japan is a very powerful G-8 economy, and, as you mentioned, they do not compromise on quality. Of course the free trade agreement with Japan I believe will create billions of dollars for both economies once it is finalized and implemented.
Mr. Pomerleau, in your presentation you mentioned your involvement in preliminary discussions in this regard, so basically what I hear is that, like our CEPA, industry and stakeholders are actively involved and basically are part and parcel of day-to-day, timely negotiations and updates.
First of all, I'll be sharing my time with Mr. Shipley, and I'll throw out all my questions so you all can make comments; otherwise the chair will cut me off.
Mr. Vincent, you mentioned the significant and immediate impact on the Canadian pork sector once it is signed. So my question to all of you is do your industries think that signing a free trade agreement with Japan will be a gateway to Asia for the industry? Also, do you believe that to meet the demand, you guys will have to increase your herds? When we talk about all this back home, what will the impact be on our families and jobs? Would there be chances of higher profits for the industry?
Chair of the Board of Directors, Canadian Pork Council
First, it affects employment and the Canadian industry, of course. There is pork production in nine provinces. There are two major processors, namely Maple Leaf and Olymel, and they are located in various provinces. From an economic point of view, the pork sector is quite significant in every Canadian province.
Over the last few years, production went down 20%. The decrease was more marked in some provinces than in others. It is therefore very important to retain our markets. The Japanese market is very lucrative and demanding and, furthermore, the percentage of our production which is sold in Japan is—
Chair of the Board of Directors, Canadian Pork Council
The rest is sold at lower prices. Even though our products are of a higher quality, only 28% of our production, that is, the share which is sold on the Japanese market, is paid what it is really worth. The rest sells for less than its real value.
You have to understand one thing. We talk about the importance of quality. Everything produced in Canada is of the same quality. The products that are exported to Japan are of the same quality as those sold here or in other markets. However, the price paid is not the same.
Regarding employment, pork production creates many jobs in Canada, so it is important to retain that market. Japan is a model. If we lost that market, it would kill us. It really is the first step. If we cannot sign an agreement with Japan, it would have significant repercussions on the industry.
President, Canada Pork International
I don't wish to add to what Jean-Guy said, but you asked if it would mean entry to other Asian markets. It would not really, because as far as we're concerned, they're all different.
In our case with Japan, we're not talking about tariffs. We're talking about the system, which is very different. Our presence in Japan, though, is a key to opening other markets, because the comment we hear from other countries is that if you're in Japan big-time, it means you must be very good. So it adds to our reputation worldwide.
Conservative
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
I think it was John who said that for the pork industry, for the 50% that we export, 80% of that goes to the United States. You talked about how those were tied together. I heard about how important Japan is, but I think the principal part is how important trade agreements with countries that diversify our industries are. Is it a fair comment to say that having free trade agreements to diversify opportunities is important?
President, Canada Pork International
I can illustrate that. Before the Uruguay Round of the WTO, before 1994, if you looked at our top 15 markets now for pork, we were not in 12 of those 15 markets. We didn't have access to Korea, China, Mexico, you name it. It was a long list. So those multilateral or bilateral agreements are key to gaining access.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
John, you got hit with BSE, and then you said we were likely going to get the 21 months extended to 30 months. I think that's important. I wonder how important that is when the main focus is on the high-end meats, though we also talked about the offals and everything else.
The other part of it is the SRMs, specified risk materials. I understood that Japan's standards are higher than international ones. Do you see that as something that needs to be corrected, or do you see how we can do through negotiations?
Director, Government and International Relations, Canadian Cattlemen's Association
There are a lot of things in there.
On the question of safety standards and whether they have a higher standard, it's not really whether the product is safer, but that they seem to have a higher perception. Every customer wants to say “Do something special for us so we can show that we are different”.
The reality is that it's all safe product, but for some customers you want to do something a little differently. I would certainly make that point to reassure all the other customers that what they're getting is not less, it's all equally safe.
I'm trying to remember where you started your question.
Conservative
Director, Government and International Relations, Canadian Cattlemen's Association
It was on the impact of getting the age up.
Conservative
The Chair Conservative Rob Merrifield
If we can have just a quick answer on that, then we'll move on.
Director, Government and International Relations, Canadian Cattlemen's Association
Right now we can't ship year-round. We have a real challenge January through May in getting enough cattle that are under 21 months, and that really impacts our ability to supply a customer year-round.
NDP
Marc-André Morin NDP Laurentides—Labelle, QC
My question is mainly for Mr. Vincent.
When we talk about non-tariff barriers, I think of all the precautions the Japanese take to protect the safety of their citizens. I would like to hear your comments on my perspective.
I've been to Japan several times. I'm familiar with the Japanese mentality. In the western world, generally speaking, we mostly talk about risk management when safety is an issue. But the Japanese are more motivated by the precautionary principle. Food safety is a completely non-political issue, to avoid any political interference which might risk the health of Japanese citizens.
Do I have a good take on the matter?
President, Canada Pork International
Yes, but that's not a problem. In fact, to reassure the Japanese, we have created a quality assurance program. I did not say that our product was not safe before, but now we can prove it. We can demonstrate this to the Japanese because we conduct audits and verifications. We have people who keep books, so we can prove that our product is safe. That's the difference between the Japanese and others. They do not take anything for granted, and you have to prove to them that you actually do what you say.
NDP
Marc-André Morin NDP Laurentides—Labelle, QC
On another subject, and this might just be an impression, I believe that the quality of pork production in Quebec has greatly improved. My impression is that you have made progress in your trade relationship with Japan, and this would be due to the fact that many producers have set high standards for themselves. I do not want to disparage my friends opposite, but these days, in Canada, it seems that there is a trend to save money by reducing expenses linked to quality assurance standards in the area of food and agricultural production. So I am wondering to what extent producers see this as being a threat, and whether it might reflect badly on us during the negotiations.
Conservative
