Good morning, and thank you for the opportunity to present. Since I am based in Ottawa, I apologize for having to do this by video conference. Other business brought me to Toronto today.
We submitted a letter, and I believe that may have been circulated to the committee, but I will highlight elements from our submission.
First I would like to start by telling you a little about the Fisheries Council of Canada and the fisheries sector. FCC has been the national voice for Canada's commercial fisheries since 1915, and our members include small, medium-, and larger-sized companies, as well as indigenous enterprises that harvest our fish on Canada's three coasts and in our inland waters. Our member companies process the fish and seafood, and FCC members are proud to be key employers in their community, providing jobs and an economic base for other local businesses.
Like any other renewable resource, sustainability is of paramount importance to us, and I'm proud to say that Canada is among the leaders in the world in terms of third party certification. This contrasts with the fact that only about 10% of the world's fisheries are certified.
The Canadian seafood industry creates 80,000 direct jobs annually, mainly in coastal and rural communities, and exports $7 billion of product to 139 countries annually. The largest export markets for Canadian seafood products are the United States at 63%, China at 14%, the European Union at 7%, and Japan at 5%. As such, the sector is extremely supportive of free trade.
Getting to the specifics of your study, the Mercosur bloc countries currently represent more of an import source rather than an export market for us. We export $3 million annually, but we import $39 million, for a net trade deficit of $36 million. Virtually all of our exports to Mercosur are to Brazil, and most of the imports from Mercosur come from Argentina. In the grand scheme of things, the two-way trade with Mercosur at $42 million is a mere drop in the bucket in terms of our total fish and seafood two-way trade globally, which is at roughly $11 billion.
However, there are two aspects that suggest there could be some significant export opportunities for us. One, Mercosur tariffs on fish and seafood range as high as 32%, so elimination of those tariffs could create some opportunities for Canada.
Two, and perhaps more importantly, Mercosur countries, which have a combined population of 260 million people, eat very little fish and seafood. Brazil's per capita consumption is just over 10.5 kilograms per year, Uruguay is at 7.5, Argentina is at just under six, and Paraguay is at just under four kilograms per year. By comparison, Canadian per capita consumption of fish and seafood is just over 22 kilograms per year. Even one additional kilogram in per capita consumption in Mercosur would equate to about 260,000 tonnes of fish and seafood annually. That equates to about 24% of our annual landings, which is a significant volume with just a small increase in per capita consumption.
In terms of other trade issues, of greater importance to Canada's fisheries sector are the successful renegotiation of NAFTA, full implementation of CETA, ratification and implementation of the CPTPP, and free trade negotiations with China.
In short, a free trade agreement with Mercosur could hold some potential for the fisheries sector, but it's currently not a big priority for us. If negotiations were successful, some market development for fish and seafood would be needed to encourage more consumption and to build a supply chain in Mercosur.
One final point I'd like to make in terms of negotiations is that an important element for us is sanitary and phytosanitary measures. The approach taken in the CPTPP is quite favourable. We like the rules and the measures that were put in that trade deal. If that could be modelled for negotiations with Mercosur, that would be good.
With that, I welcome any questions the committee might have.