Good afternoon, and thank you for having CAFTA back to the committee.
I'm Kathleen Sullivan and I run CAFTA, which is an organization made up of Canadian farmer or producers groups, processors, and exporters. Our mandate is to pursue high-quality trade agreements on behalf of Canada's agriculture and food sector. My members alone produce about 80% of all of the food and agriculture products that are exported out of Canada. That's about $32 billion that's represented around my board table.
We are very happy to be here to comment on the Canada-Japan economic partnership agreement launched earlier this year. In fact I and about ten of my agriculture colleagues, my members, were pleased to be invited by Minister Ritz to join him in Japan when the Prime Minister launched the trade deal. We were able to hold a number of round tables with our Japanese buyers. I was also fortunate enough to participate with the Prime Minister in a round table with Japanese industry.
Every year Canada exports $40 billion in agriculture and food products from this country. Half of everything we grow across the country leaves to find its way to other shores. That includes half our beef production, but it goes all the way to 85% or 90% of our canola production. Without export markets, the size, the structure, the shape of not just our agriculture community but also our rural communities would be drastically impacted.
For us, Japan is very much a priority market. Japan is heavily dependent on food imports, it has the lowest rate of food self-sufficiency among G-8 countries, and it boasts a large agrifood trade deficit. Last year alone we exported almost $4 billion in products to Japan. That's about 10% of everything we export. It makes Japan, for us, our second-largest export market after the United States.
Today Japan is the largest predictable market for Canadian canola seed, the second-largest market for our malt and for our pork, the third-largest market for our wheat, and the fourth-largest market for Canadian beef.
Although agriculture is just 1.5% of Japan's GDP, Japan's agriculture sector is highly subsidized, and it's heavily protected through tariffs and border measures. Tariffs on agriculture products are as high as 50%—on beef, for example—and much higher on sugar and sugar-containing products.
Given the importance of the Japanese market for Canada, it's imperative that any trade deal we sign with that country have a very strong agriculture package. The protection that Japan affords its agriculture and food sectors has long been viewed by us as an impediment to meaningful trade negotiations with that country, but about a year and a half ago Japan launched its basic policy on comprehensive economic partnerships. It really spoke to the importance of Japan taking a look at export markets and making the necessary domestic reforms that would allow it to support meaningful trade deals. That encourages us that in fact trade negotiations with Japan could be quite fruitful.
CAFTA also encourages the Canadian government and Japan to pursue a very, very broad trade deal. It can't just be focused on tariffs, as was talked about in the previous panel. Certainly for agriculture, half of the problems we face around the world are non-tariff barriers. Those will have to play a really critical part in any trade deal.
Finally, I'd just like to quickly reference the Trans-Pacific Partnership. I don't think you can talk about a trade deal with Japan any more without putting it in the context of the TPP.
Of course the launch of the Canada-Japan EPA coincides with the applications of Canada, Mexico, and Japan to join the Trans-Pacific Partnership, which is a regional Pacific Rim trade deal currently comprised of nine countries, including the United States.
We believe Canada should make TPP membership a priority, and the government is working very hard on that. The TPP offers significant opportunities for us not just on a market access standpoint but to be able to deal with non-tariff barriers and certainly growth opportunities if you move beyond the current nine-member configuration.
What's really critical to know about the Trans-Pacific Partnership, though, is that if Japan is in that group, Canada must be at that table. We already have a situation, as I think you all know, in Korea, where both the U.S. and the EU got into Korea ahead of us. We're now at risk of losing that billion-dollar market to our major competitors. We cannot afford the risk that Japan would join the TPP and Canada be left out.
So while we're very interested in joining the Trans-Pacific Partnership, our even stronger message to you is that we have to join in sequence with the Japanese.
With that, I would just like to say that our TPP interest does not detract at all from our interest in the Japanese market. It is a major marketplace for us. It's an incredibly stable marketplace for us. We have a very long and healthy relationship with our Japanese buyers that we want to continue to grow.
With that, I'd be happy to take any questions you have.