Evidence of meeting #13 for International Trade in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was ceta.
A recording is available from Parliament.
12:15 p.m.
NDP
Marc-André Morin NDP Laurentides—Labelle, QC
Mr. Rice, the technical summary provides general information on biotechnology.
Could you please explain the main issues affecting members of your alliance?
12:15 p.m.
Director, Canadian Agri-Food Trade Alliance
I would not be doing justice to the Canola Council to suggest that I really understand their biotech issues in depth, but I have been part of delegations that have gone over. I think their major issue at the moment is in terms of the EU inability to accommodate any level in the infinitesimal amounts of biotech products, genetically modified corn or soybeans that have not yet been approved by the EU and which render shipping quantities of non-genetically modified crops very risky because of the inability to know ahead of time that there won't be this tiniest bit of GM residue found in the container vehicle. They are looking for the EU to accommodate some level of maximum residue tolerance, very low, until they reach the point where they can approve these items.
That would be the major issue in terms of the EU, their inflexibility currently under their existing regime to allow any residue when the amounts that would be in these shipments would be of no public health concern.
12:20 p.m.
NDP
Marc-André Morin NDP Laurentides—Labelle, QC
It's a bit like genetically modified organisms. Most European countries are much less eager than Canada when it comes to genetically modified organisms.
For example, could the use of growth hormones in beef farming pose a challenge or prevent us from increasing our exports to Europe?
12:20 p.m.
Director, Canadian Agri-Food Trade Alliance
Certainly in the case of beef their supply chains are already looking at how they will ensure that the product meets the EU specifications. It's the same case for my sector, pork, where we're not using it. Even though their products are approved in most pork-producing countries of the world, they are not in the EU, so we respect we need to produce it without the use of it.
In the GM area the industry in Canada is, and they do export like we do to dozens of countries, I think they know how to provide the exact specifications, whether it's GM or non-genetically modified products. I think they can do that. I think it's just this fairly ridiculous requirement they have, which probably most would like to change, as they do approve additional GM products. They can't approve them all at once. I think that's the problem, the timing of them approving it and allowing shipment of non-GM varieties into the EU.
12:20 p.m.
NDP
Marc-André Morin NDP Laurentides—Labelle, QC
In the event that the Europeans were to refuse a product or category of products, our producers would have to adapt and change their farming methods if they really wanted to develop the market. Do you have a sense of how much more it would cost our producers to adapt to such conditions?
We are hopeful that the Europeans will accept everything, but they seem to be closed for the time being. If necessary, our producers will have to adapt to European standards, and that will mean extra costs for them. Have you or your members estimated what those costs would be?
12:20 p.m.
Director, Canadian Agri-Food Trade Alliance
We know we have four companies already in Canada that are in a position to ship to the European Union. They meet all the requirements in terms of the feeding, in terms of the processing, and they have the supply lines that meet those requirements. Beef is a little bit further behind on that in that they just haven't had these market opportunities present themselves.
There is an additional cost, but the markets over time, particularly when we have duty-free access, will provide the additional revenue. In my mind, no doubt that will make it attractive to ship under that quota.
12:20 p.m.
NDP
Marc-André Morin NDP Laurentides—Labelle, QC
Canada already has access to a certain share of the market: 50,000 tonnes of beef and approximately 80,000 tonnes of pork. Are we meeting the export quotas we were given?
12:20 p.m.
Director, Canadian Agri-Food Trade Alliance
We don't ship very much under our existing quotas because they have very, very high tariffs. We do have actually a Canada quota that we achieved when the European Union expanded to include countries like Hungary and Poland. We have never used that because there is a tariff on that which is approaching a dollar a kilogram. It has just made it totally uninteresting for the trade. When we look at zero tariff per kilogram, then we have major interest. We ship some under those quotas, but not a great deal because in our business, 10¢ or 20¢ a kilogram is enough to make or break a deal.
12:25 p.m.
Conservative
The Chair Conservative Rob Merrifield
Thank you very much.
We'll now move to Mr. Hoback. Welcome to the committee. The floor is yours, sir.
12:25 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Thank you, Chair. It's great to be part of this great committee. One of the things that brought me to Ottawa was trade and my involvement with the WTO and Western Canadian Wheat Growers, so this feels like home. It's great to be here and to have Martin here. I'm very familiar with what CAFTA does and the great organization they are.
I was interested in the questions that my colleague from the NDP started out on, on low-level presence. The issues around low-level presence are something that we've dealt with on the agriculture committee. There's the importance of the recognition of science. You have a dispute settlement mechanism that uses science instead of politics to settle a dispute. That's one of the things I look at when I look at the European Union trade agreement for sure.
When I was back in the riding during the last couple of weeks, my farmers were very excited about this. They just can't wait. In fact, one of them was saying to hurry up and get this done.
I'm curious about the pork sector which has gone through many challenges over the last little while. How excited are you? What do you see happening? What is the impact going to be on your sector?
12:25 p.m.
Director, Canadian Agri-Food Trade Alliance
When it was announced, it was the first piece of good news for our industry in five years. We've had several pieces of news, more recently our new disease concern, but it is the first time we have been ahead of our major competitors in accessing a new market. We're playing catch-up in some other cases. We believe the timeliness of this one is excellent, because Europe is really moving to a much more market driven than protection, trade policy driven agricultural import regime. The industry has been very, very pleased to see this result.
12:25 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
You talked about the numbers, $90 million for canola. That will mainly go into the biodiesel sector, the non-food sector. When we see some movement in the European Union on GMOs, and some recognition on science and health and safety around GMOs, that number could be exported as high as maybe the beef number, to the $600-million mark.
In the hog sector, I am kind of curious. We've had our frustrations with the U.S. We have a trade deal there. It has worked fairly well in the past, but it has some frustration now with the country-of-origin labelling. This would give you an opportunity to shift some production away from the U.S. to somewhere else. What is the impact on your sector, knowing that you have that bigger market access? Does it give some more viability and some more confidence within the sector for investment into hog barns and maybe some expansion back into the sector that we haven't seen for many years?
12:25 p.m.
Director, Canadian Agri-Food Trade Alliance
We've seen a significant competition emerge from the United States. Back when NAFTA was implemented, the United States was a big net importer of pork. Now they're the world's largest exporter. There's no question if we want to continue to be a major exporter, we have to look at being able to export more and more of our production and have more and more of our exports going to non-NAFTA markets. Once again, we're doing it into the EU without the United States being right beside us or trying to get through the door at the same time.
12:25 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Let's make that very clear. You have access to a market which they don't have access to. Is that correct? I just want to confirm that.
12:25 p.m.
Director, Canadian Agri-Food Trade Alliance
That's right. It doesn't appear that their deal is going to happen overnight either.
12:25 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
I'm kind of curious on the process. The last witnesses were saying they didn't feel they were actively involved in the process. They didn't understand the process or weren't listened to.
How did you find the process on this trade deal versus previous trade deals? How was your access to the minister or access to the negotiators as far as information was concerned, so you had a good understanding of what was happening?
12:25 p.m.
Director, Canadian Agri-Food Trade Alliance
Agriculture has had a kind of standing consultation group for some time that provides updates not just on CETA but on other trade negotiations to all agrifood groups that want to be involved in them, both those interested in exports and those who are concerned about imports.
In addition, because of this one being so important to us, we certainly did avail ourselves of the opportunities that we know all other interested parties have had, and again, both those interested in exports and those interested in what will be the import levels of some products. We've had opportunities to provide information on our sector that the negotiators could then use to confirm, I guess, how much interest there was in specific export opportunities, so—
12:30 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Not only would you have had input to the federal government, but I understand that you said the provinces had a large amount of input into the negotiations on the trade deal also. You had input into your local provincial governments, which also had input to the federal government. Is that not fair to say?
12:30 p.m.
Director, Canadian Agri-Food Trade Alliance
Yes. Our provincial members would have been communicating to their provincial governments.
12:30 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
It's very comprehensive then, when you look at the process of input to make sure that everybody is aware of how things are unfolding and the type of deal we're getting.
12:30 p.m.
Director, Canadian Agri-Food Trade Alliance
We did take advantage, of course, of the opportunity to go over and meet with other EU country delegations and so on. I think that by that manner we were able to really participate in quite a wide cross-section of interests involved in those negotiations. We spent a lot of time here and in Brussels on doing whatever we could, I guess, to see that our interests were understood. We were never in the meeting rooms, of course; there was never that kind of thing, but we did feel that our interests were being recognized.
12:30 p.m.
Conservative
12:30 p.m.
Director, Canadian Agri-Food Trade Alliance
It's fair to say we support it unreservedly.