Thank you.
I will start with my presentation on the Pacific Alliance. I'm here today with Martin Charron, the vice-president of Canada Pork International and the director for Asia, Africa, and Europe. I am in charge of Latin American markets and the Caribbean.
Canada Pork International, CPI, is the export market development agency for the Canadian pork industry. CPI is a joint initiative of the Canadian Pork Council and the Canadian Meat Council.
CPI membership includes national and provincial associations of hog producers as well as federally registered pork packing and processing establishments and trading companies. Combined, CPI members represent nearly 99% of the Canadian pork export industry.
This industry has been serving international markets for more than 20 years, and currently reaches clients and consumers in more than 100 countries. This said, Canadian pork exports account for 20% of today’s world pork trade. Statistical information reports that in 2012, 1.189 million tonnes of Canadian pork were sold worldwide. This was valued at $3.1 billion.
In the last four years, Canadian pork exports have registered record years in volume, time after time. One of the reasons for the reliable development of the export business has been the establishment of free trade agreements with strategic partners. In addition, country-based market development strategies related to pork meat exports rely heavily on preferential access conditions such as reduced and/or eliminated tariff rates and unrestricted access in terms of veterinary and sanitary restrictions and regulations.
In regard to the four members of the Pacific Alliance, Canada currently holds bilateral free trade agreements with each member. The FTA with Mexico as part of NAFTA, the North American Free Trade Agreement, was brought into force on January 1, 1994. The FTA with Chile was brought into force on July 5, 1997. Finally, the FTAs with Peru and Colombia were brought into force on August 1, 2009, and August 15, 2011, respectively.
The FTAs with Mexico and Chile have both evolved to the point where there are no longer custom duties applicable to Canadian pork exports to these markets. However, in the case of Colombia, applicable duties in 2013 are 12% for a quota of 5,500 metric tonnes of frozen pork and value-added items.
In the case of Peru, applicable duties will remain at 25% for five more years before entering year 11 of the FTA, when the base rate will begin its reduction in seven equal stages during seven years.
In 2012 Canada exported to Mexico 60,940 tonnes of product, valued at $82 million; 7,510 tonnes, valued at $16 million, to Colombia; 3,872 tonnes, valued at $9 million, to Chile; and only 78 tonnes, valued at $145,268, to Peru.
CPI has established a market classification for promotional purposes. The criteria for classification are based on the volumes exported to these export markets and on the opportunity to develop promotional initiatives geared to improve product distribution in specific segments. Consequently, Mexico is considered as a priority market category A, whereas Colombia and Chile are considered category B. Peru falls behind in category C.
In recent years, CPI has been able to develop promotional initiatives targeting the hotel and restaurant industry, the retail sector, and the further meat processing industry in all of these markets. The results have been astonishing, primarily in the case of Colombia, where exports grew by 138% just in the last year.
In Mexico, Canada has been able to maintain market share at 8% in a market mostly dominated by U.S. pork imports.
For Chile, Canadian pork exporters are looking to develop the long-term lucrative business of pork items for the retail sector.
Furthermore, access to these markets has benefited by sanitary and veterinary agreements. The Canadian pork slaughtering, packing, and processing industry is privileged to be granted with something that's called in the industry “system approval”, which refers to the fact that all meat establishments are eligible to export pork products and byproducts. However, eligible establishments are not automatically approved by the foreign country. There is a specific protocol in place for each market. This said, there are still opportunities to improve trade conditions for Canadian pork meat products.
Therefore, CPI would like to request the following should Canada become a member of the Pacific Alliance.
First, the quota management in Colombia for Canadian pork products should be simplified in order to enhance trade to this market.
Second, the quota for Canadian pork products should be drastically increased and the existing tariff rate should be reduced in Peru.
Third, the trichinella treatment should be removed as an export requirement for pork exports to Colombia and Peru, thus permitting exports of chilled pork products to these markets.
Obtaining the above would be the first step in the right way for continental trade integration among countries with similar economic and trade policies. Canada could be favoured with a leading role in the integration of these countries through ways of cooperation and thus gain access to preferential agreements with countries in the Asia-Pacific region, highly relevant for the Canadian pork exporting industry.
Finally, the Canadian pork industry is currently experiencing difficult times, given the always changing conditions in the international markets. The latest changes in Russia, China, Japan, and other markets demand a stronger partnership with countries in the Asia-Pacific region. As a result, Canada Pork International strongly supports Canada’s membership to the Pacific Alliance.
The support provided by the Canadian government in opening export markets and maintaining access to them is crucial for the Canadian pork industry. This support is consistently offered by officials in Ottawa as well as through the trade commissioners posted in our embassies abroad. The support of the Canadian government is also reflected through the provision of high-quality and timely marketing intelligence and statistics, which help the industry develop market strategies and measurement performance.
We thank you for this time. We look forward to answering any questions you may have in regard to this brief presentation.