Thank you for inviting me to speak on behalf of CAFTA, the voice of Canadian agri-food exporters.
CAFTA represents the 90% of farmers who depend on trade, and producers, processors, and agri-food exporters who want to grow the economy through better and competitive access to international markets. This includes the beef, pork, meat, grains, cereals, pulses, soybeans, canola, sugar, malt, and processed food industries.
Together, our members account for 90% of Canada's agri-food exports, which in 2017 exceeded $57 billion and supported about a million jobs in rural and urban communities across the country. A significant portion of these jobs would not exist without competitive access to global markets.
Trade, as I've mentioned previously before this committee, is one of our main economic drivers, as 60% of the value of the sector is generated through exports. Over half of everything we produce is exported. That's half of our beef, 65% of our soybeans, 75% of our wheat, 70% of our pork, 90% of our canola, and 95% of our pulses. Also, 40% of our processed products get exported.
Over the last 10 years, our exports have grown by over 100%, boosting from cash receipts at the same time by 61%. This is why Canada's agri-food sector has been highlighted for its significant contribution to the economy and recognized by the advisory council on economic growth as a key sector for growth due to the sector's focus on exports. This is further represented by the ambitious goal to grow Canada's agricultural exports to $75 billion annually by 2025.
Canadian agricultural exporters generate a GDP of $95.5 billion for agriculture and food manufacturing. Food manufacturing alone is the largest manufacturing employer in Canada—60% of it is concentrated in Ontario and Quebec—with close to a quarter million jobs more than the automotive and aerospace sectors combined.
We have two priorities today. First, it's paramount that Canada ratify the CPTPP quickly, and we urge the government to implement it without delay.
CAFTA has been a strong supporter of the CPTPP and applauded the fantastic news that Canada concluded the deal and signed it last February in Chile. The CPTPP will not only provide the sector with unprecedented access to the high-value Japanese market and rapidly growing markets in Asia, such as Vietnam and Malaysia, but it will also provide a competitive advantage over the U.S. since it's not part of the agreement at this time.
The CPTPP will enter into force as soon as six countries ratify it, and it's very likely that seven members—Japan, Australia, New Zealand, Malaysia, Singapore, Brunei, and Mexico—will have done this process by the end of 2018. Canada may lose a first-mover advantage if it's not in the first tranche of countries ratifying the deals, and with the uncertainties surrounding NAFTA, it's really essential for our globally competitive industry to have improved access to the markets in the Asia-Pacific region. Really, the best chance to implement the agreement quickly is to ratify it quickly.
Second, due to the importance of NAFTA to Canadian agri-food trade, CAFTA urges the government to continue working to reach a modernized agreement that will strengthen the access and competitiveness of the nation's farm and food products. In short, maintain what has been successful and modernize the deal where possible. Specifically, the agreement should not be allowed to include new tariffs, new non-tariff barriers, or any other provisions that could be used to limit trade.
In its submission, CAFTA identified several areas for improvement where NAFTA could enable further growth for specific products, such as canola, grains, meats, sugar, and sugar-containing products, among others, and in areas such as greater regulatory co-operation and dispute settlement mechanisms.
With regard to a potential Canada-Mercosur free trade agreement, we offer the following views. The agri-food industry is a major economic driver in Mercosur, and it is one of the largest agri-food exporting blocs in the world. Major agri-food competitors in the region include the U.S., Chile, China, the EU, and the Mercosur partners themselves, especially Brazil.
Canada exported $143 million in agri-food products in 2017, $117 million of which was sent to Brazil. This total has been higher in some years. For example, it was $245 million in 2013, but this is still well below a half of one per cent of our total annual agri-food exports.
Mercosur also exported $1.3 billion in agri-food to Canada in 2017, and the trade surplus has grown substantially over the past five years.
Canada actually competes on world markets with Mercosur members in many of our major exporting sectors. Those are grains, oilseeds, beef, and pork. Canada's share of agrifood exports to Mercosur countries is relatively small. Canada is actually the 17th largest supplier to Brazil, and at this point our members don't see much potential for increased sales to those countries.
We believe, therefore, that a free trade agreement with Mercosur—when viewed beside other FTAs that are in progress or being renegotiated, or new ones we see as offering important prospects for increased trade—does not provide a sufficient export growth potential to justify allocating the resources required to negotiate an agreement with that region.
There are considerable demands on Canadian negotiators. These demands include the impending renegotiation of the NAFTA; the practical completion of the CETA, the Comprehensive Economic and Trade Agreement with the European Union; the ratification and implementation of the CPTPP; and the launch of free trade discussions with China.
CAFTA members recommend that—
