Thank you very much for the opportunity to come and present on behalf of the cattlemen here in B.C., and really of the cattlemen in Canada, as we are very much a national industry.
B.C. Cattlemen's Association represent nearly 1,200 producers, which raise more than 75% of the cattle here in B.C. and make up about 5% of the Canadian cow herd. The cattle industry in Canada exports nearly half of what we produce. Since BSE was discovered in Canada in 2003, the government and the cattle producers have worked very hard not only to re-establish trade with the partners we enjoyed prior to its discovery, but also to open new markets around the world.
For the past several years, of course, our main focus has been on resolving the country of origin dispute with the United States. We greatly appreciate the hard work of the government in sticking to our guns on this. We feel that this really exemplifies what trade agreements are about. If we don't stick to our guns, then they're not worthy of being done. We really do congratulate you on sticking to it and bringing resolution to this.
With COOL resolved, it's important for our industry that we now focus on the priority trading partners and agreements. The two most immediate opportunities are with Europe, with the CETA, and the Trans-Pacific Partnership.
British Columbia's cattle industry is very supportive of ratification of the TPP trade deal. We see value not only in the markets that it will allow increased access to, while keeping us on a level playing field with the players from other partner countries; we also anticipate through this better cut-out values for our cattle.
Our industry benefits greatly when we are able to match the right product with the right market. We see preferences for certain cuts of meat and by-products with every trading partner. This increase in demand sees us with greater returns for virtually every cut of beef, thus making each individual animal have a higher cut-out value, allowing greater opportunity to profit for the entire supply chain.
The primary goal for the TPP negotiations was achieved for us with the re-levelling of the playing field for access to Japan for Canadian beef. We are seeing the effects of slipping into competitive disadvantage already, as Australia has already gotten a free trade agreement with Japan. Canadian beef is still subject to a 38.5% tariff, and Australia is already down to 27.5% and dropping.
To illustrate the difference between 2014 and 2015, we saw Canada export nearly 19,000 tonnes of Canadian beef to Japan in 2014. In 2015 that figure dropped to 14,000 tonnes, a 24% drop in tonnage. We went from $103 million in sales to $93 million, a 9.3% drop. The reason for this change was in the dollar valuation: we were able to see more return of dollars, but a huge drop in tonnage, and a lot of it we can attribute to other countries' having FTAs, whereas we do not.
With the implementation of the TPP, the Japanese tariff on Canadian beef will immediately match the rate for Australia and then decrease to 9% over 15 years. It is anticipated that the amount of Canadian beef going to Japan would double or even triple, and we could see the value increase to $300 million. Without the TPP or a bilateral agreement with Japan, Canada will likely lose around 80% of the value of our beef exports to Japan.
Our only concern about TPP is that it might not be implemented. While it is not certain what the U.S. will do, we know that according to the implementation formula, the TPP cannot come into effect without the U.S. Because of this, we believe there need to be strategies for Canada, should this happen. It is unfair to Canadian exporters to try to compete with other countries that already have achieved FTAs.
While a great deal of the value is with Japan, it is not the only benefit. While we cannot quantify the amount at this time, we feel that Vietnam will be a market of growing importance for beef. Vietnam has tariffs of 15% to 20% on beef cuts, which will be fully eliminated under TPP in three years. Vietnam's 10% tariff on beef offals will be eliminated in five years.
There is no question that our beef industry in Canada being part of the deal involved with Japan is imperative. We do appreciate that there are many considerations involved in this in Canada. To remain competitive in the global markets, we must be one of the founders in the TPP.