Thank you, Mr. Chairman.
As mentioned, I'm with Maple Leaf Foods. I'm also a director of Canada Pork International.
Maple Leaf Foods fully supports and strongly encourages the ongoing efforts of the Government of Canada to expand market access for the vitally important Canadian pork industry. An EPA with Japan that enhances our access to this high-value market is welcomed by Maple Leaf Foods.
The Japanese market is extremely important to the Canadian pork industry, with sales of 220,000 tonnes worth about $893 million in 2011. This represents 20% of all the pork we export from Canada by volume and about 28% by value. Japan is Canada's second largest pork market after the United States. This trade initiative, which will most certainly enhance Canada and Japan's relationship and address challenging commercial issues, is particularly welcome as it could provide Maple Leaf Foods and the Canadian pork industry with a competitive advantage in Japan. For guys like Ray and me, that's very important
Maple Leaf Foods has had a long history in the Japanese market. We have maintained an office in Tokyo since 1980. In 2011, Maple Leaf Foods exported 77,000 tonnes of agri-food products worth $310 million. My company represents 30% of Canadian pork exports to Japan from Canada, and we hold a 9% market share of all the pork the Japanese import. We operate a dedicated pork plant in Lethbridge, Alberta, and have focused the first shift of our Brandon Manitoba flagship facility on high-value chilled pork for the Japanese market.
As far as the Canadian market is concerned, Japan is extremely important to the industry, as I've mentioned. Canada exports approximately 65% of the pork we produce. Markets like Japan are crucial for us.
Maintaining access to this market is critically important to all stakeholders in the business, from hog farmers whom we work with to packing-house employees across the country. In addition to that, Japan represents the highest dollar value return of any market that Canada ships pork to. As a result of this, it's highly sought after by our foreign competitors. Over the last few years, Chile and Mexico have concluded free trade agreements with Japan, which gives them preferential access on pork products.
Just last week, on October 11, the EU's international trade committee gave the green light to free trade talks between the EU and Japan
I would like to briefly touch on our experience with our negotiations with Korea.
in 2008, free trade talks with Korea broke down and both governments stepped away from the negotiating table. In the interim, Chile, the EU, and the U.S. successfully concluded trade agreements with Korea. Korea now has trade deals with three of Canada's largest pork competitors. I raise the issue of Korea because Canada cannot repeat this experience with Japan. It would be devastating for the industry.
Prior to implementation of the U.S.-Korea trade agreement in March 2011, Canada was Korea's second largest foreign supplier of pork and Korea was Canada's fourth largest destination for pork products. We exported of 94,000 tonnes, worth $234 million.
This year, Canadian pork exports to Korea are down about 30%, and as we see the next phase of tariff reductions occur, we'll see another very sharp drop in our exports to that market in 2013.
Maple Leaf Foods strongly encourages the Government of Canada to conclude an agreement with Korea as soon as possible to avoid further erosion of Canadian business in this important market.
Getting back to Japan, it currently applies high tariffs on many agricultural products, including pork and beef. In the case of pork, this includes a complex differential duty system, which disrupts the free flow of pork imports. I would be happy to answer any questions on this as we get into the question segment.
The protection Japan provides its agricultural sector has often been viewed as impeding meaningful trade negotiations. Maple Leaf Foods shares this concern. However, we are encouraged by Japan's basic policy on comprehensive economic partnerships, which it adopted in 2010.
Basically, this policy states that Japan will aggressively pursue bilateral trade agreements in areas such as agriculture. More importantly, they're prepared to deal with the many issues in agriculture and to reform their agricultural segment.
We view these reforms as essential to ensuring a comprehensive agri-food package in the EPA with Japan.
Thank you very much, and I look forward to your questions.